Good health = economic growth: A case for raising domestic African health financing

Good health = economic growth: A case for raising domestic African health financing


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Pearl Alice just returned from the Conference of African Finance and Health Ministers in Tunis, Tunisia.

The meeting of African Finance and Health Ministers in Tunisia last week tackled multiple challenges facing African health and finance policy makers. Chief among them is how to raise domestic finance for better health outcomes — a huge issue — as Africa has 25 percent of the global disease burden. And poor health and premature death hinder economic growth in Africa.

Policy makers talked about how to spend their health dollars to improve health outcomes and create conditions for economic growth, because the fact is, these two issues are linked. One extra year of life expectancy raises GDP by 4 percent, and an additional $21 to $36 annual per capita investment in health could save more than 3 million lives in 2015 alone. As Tanzania Finance Minister William Mgimwa said, “While Africa may need more money for health, it also needs more health for money.”

Other topics were discussed. As I mentioned in a previous blog post, health worker shortages are a big issue. Twenty-five to 50 percent of African-trained doctors work overseas. Secondly, is there a potential “demographic dividend” in Africa’s future? With nearly half of Africa’s population under the age of 15, with more focus on smaller family size, Africa could experience a “demographic dividend” in 10 to 20 years where there are more people in the workforce than young and older dependents combined. Lastly, since most African countries are not likely to meet the Millennium Development Goals by 2015, should we extend the 2015 deadline or establish new policy framework for meeting the same targets?

The Conference also agreed that universal access to health care services was the major goal — but how to achieve it is the challenge. Currently, the poorest African families pay for 63 percent of their health costs out of pocket. African governments spent the least amount of their budget on health compared to other world regions.

Ministers of finance asked, in the face of large-scale poverty, how do they balance the needs of Health Ministries against others like education, agriculture and trade?

Some health ministers argued that without a healthy population, none of the social and economic goals could be achieved. As a conference participant said, “better health leads to greater wealth.” The answer lies in structuring the budget process based on national plans that utilize cost-effective programs that result in value for money and performance-based budgeting practices.

Many countries in Africa are instituting health reforms to reduce the cost of quality health care while covering more people. Rwanda introduced community-centered health insurance and raised the number of the insured from 3 percent of the population to 90 percent between 2003 and 2010. To meet its health workforce shortage, Ethiopia trained and deployed 40,000 new health workers to under-served areas.

The ministers ended the conference with the Tunis Declaration on Value for Money, Sustainability and Accountability in the Health Sector. The Declaration lists 10 reforms and calls upon African parliamentarians and civil society to support the implementation of these recommendations.

Photo credit: UNAIDS.


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