Structured Abstract
| Document Title: | The Global Fund tracking study: Macroeconomics and sector background paper. ZAMBIA, January 2004 |
| Institution: | London School of Hygiene and Tropical medicine (LSHTM) |
| Authors: | Sally Lake |
| Study commissioned by: | A team from the Department of Public Health and Policy at the London School of Hygiene and Tropical Medicine and funded by : Danish Agency for Development Assistance, the UK Department for International Development, Development Cooperation Ireland (DCI), and the Netherlands Directorate-General for International Cooperation (DGIS). |
| Objectives: |
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| Methods: | Combination of methods: document review, in-country fieldwork, separately commissioned desk studies on specific areas. This document is the draft output of a desk-based study, and as such has been limited by the number and type of documents available to the consultant. Key documents which it has not been possible to obtain include a complete version of the National Health Strategic Plan for 2001 - 2005, and the Strategic Plan for Rolling Back Malaria in Zambia 2001 - 2005. A major gap was the failure to source recent Ministry of Health and Central Board of Health annual plans, or any recent health budget or expenditure data, for government, donor or total sectoral resources. This descriptive qualitative study forms part of a series of four country background papers in order to support an 18-month Tracking Study. |
| Results: | The paper describes the macroeconomic situation in Zambia, the government budgetary framework, including details on health sector organisation, planning and financing, both generally and in relation to the Global Fund target disease-related activities. It discusses issues specifically related to the Global Fund proposals in the country, in terms of potential levels of funding and the macroeconomic impact, and in terms of sectoral effects and their relationship to existing strategies. Key issues, and specific areas for the second phase of the tracking study to follow up, are then presented. (see original Summary of key issues and areas for Phase Two tracking). |
Summary
SUMMARY OF KEY ISSUES AND AREAS FOR PHASE TWO TRACKINGZambia is some way behind other countries in the study, with neither a Medium Term Expenditure Framework, nor established and functioning financial management systems at the national level for tracking sectoral expenditures in relation to budget. Public expenditure management is weak, and macroeconomic performance subject to concern which has resulted in failure to obtain renewed International Monetary Fund support for the country. This has already derailed achievement of the desired Highly Indebted Poor Countries (HIPC) completion point in 2003.
Despite problems with macroeconomic performance, and a relatively high level of public expenditure as a proportion of Gross Domestic Product (GDP), the fiscal deficit is quite low, and there appear to be no expressed concerns at increasing inflows of external aid to support the budget, either as balance of payments or project support.
In a context of such poor government expenditure management that parallel/additional systems have been established to track HIPC funding, the addition of funding from the Global Fund for AIDS, Tuberculosis and Malaria may not result in the same inefficiencies as in other countries, as the degree of harmonization is as yet limited. However, it does represent a move contrary to plans, both generally through the Framework for Harmonization in Practice, and sectorally as it relies on structures and procedures which are inconsistent with the Sector Wide Approach which cooperating partners in the health sector have signed up to.
The interventions outlined in the Global Fund proposal go beyond those included in the defined and costed Basic Health Care Package, yet no mention is made of the implications of this for the Zambian health system more generally.
Macroeconomic issues for follow-up
- GDP growth performance
Concerns have been raised that predicted GDP growth rates used in the Poverty Reduction Strategy Paper (PRSP) are too optimistic, and this appears to have been borne out to date. Continued monitoring of economic growth is therefore recommended.
- Conflicting fiscal priorities
Among past constraints on pro-poor spending, the need to prop up failing parastatals and to improve public sector pay beyond planned levels have been identified in recent years. Failure to deliver on the PRSP will further delay attainment of the HIPC completion point. Actual government expenditures in relation to budget are a measure of commitment to priorities, which to date have favoured health and HIV/AIDS. Follow-up of budget execution is therefore important.
- Progress with Harmonization
A Public Expenditure Management and Financial Accountability Review was undertaken in June 2003 which may have implications or recommendations for future aid management within the budget. It would be useful to get hold of this as it may have implications for the way in which the Global Fund funds are managed in later stages of the support.
- Inter-sectoral allocations and the additionality of funding
The Global Fund funding is intended to be additional to existing funds for target diseases, whether channelled through the health sector or separate HIV/AIDS bodies. Although this is a somewhat unrealistic expectation, given the fungibility of the different financing sources available to government, and is also contradictory to the recent emphasis given to strengthening recipient government leadership in prioritisation and resource allocation, it should be tracked if possible, through analysis of the shares of total and discretionary government spending allocated to the health sector (and to HIV/AIDS where treated separately).
Sector issues for follow-up
- Overall sectoral allocations
The poor state of health expenditure data in Zambia has not permitted any discussion of whether the Global Fund funds are in any sense additional, or indeed whether HIPC funding has added to the health budget since 2001. More complete and up-to-date information should enable some analysis in this area if it can be obtained.
- Timing and level of the Global Fund funding flows
The predictability of aid flows is one of the areas which partners have agreed to strengthen as part of the harmonization effort, and is an acknowledged cause of disruption to implementation of planned activities. This happens both at the macro level, where foreign reserves may need to be drawn down, and at the sector level, where funds may be deviated between activities, or cancelled (as has frequently happened in the past at district level). The extent to which the Global Fund meets its stated timeframe, as incorporated into sectoral plans, will therefore be of interest, particularly as it is likely to represent a significant share of funding for the target diseases and sector as a whole (see below).
- The Global Fund as % of sectoral funding (Health and HIV/AIDS)
It has not been possible to identify the share of total public (domestic and external) funding to the health sector due to the poor nature of budget and expenditure data. However, the high level of funding approved through the Global Fund over coming years means that this is likely to be a significant share which it would be of interest to monitor. This will show the extent to which, if at all, other funding is cut back and the GFATM funding ceases to be additional.
- Incorporation of the Global Fund funding within sectoral MTEF/budgets/reports
Although at the time of writing Zambia does not have an MTEF, there is an intention to develop such a tool, and it would be useful to monitor the extent to which the Global Fund funding is incorporated "on-budget" within either the annual budget or a future MTEF in order to provide a more complete view of sectoral resources. Inclusion of reporting on the Global Fund expenditures and activities in any sectoral reports is another area which should be tracked, in order to determine the extent to which the funding is being assimilated into existing sectoral planning and management instruments.
- Balance of funding within the BHCP
Proposed interventions for the Global Fund funding to tackle the three target diseases represent only a subset of those included within the Zambian BHCP. In addition, "new" interventions are not included at all in the most recent costing, eg VCT, TB prophylaxis for HIV position persons etc. The costs of these (original and "new") interventions significantly exceed those as included in the original costing. Further analysis would therefore be useful to assess the extent to which other priority interventions identified within the BHCP are funded.
- Share of funding allocated to district level services
As the district is seen as the primary level for service delivery, and that decentralisation of both resources and responsibilities to the district level has been a key element of Zambia's sectoral reform programme, it will be important to track the extent to which the Global Fund funding reaches health providers at the district level and also, if possible, the extent to which such funding responds to district requests/needs rather than being "pushed" from central level technical programmes.
- Funding by Principal Recipient
It would be useful to have more information on the activities to be funded through the allocations to the Churches Health Association of Zambia as opposed to those to be funded through the Central Board of Health. This may just be a safeguard on the part of CHAZ to protect allocations for the same activities undertaken by their institutions and within their catchment areas, but it may be for different activities. Given that the original intention of the reforms was to develop an integrated district health system, and to publicly fund a similar health package as far as possible, it would be interesting to explore why the balance of funding between these PRs is very different to the balance of service provision by government and CHAZ health facilities as a whole.
- Absorption capacity
The shortfalls in financial data in Zambia make assessment of absorption capacity rather difficult. However, as the Global Fund funding is to be tracked separately through parallel reporting systems, the extent to which the health system is able to (effectively) absorb the significant new inflows should be monitored in relation to the planned phasing of funding as given in the proposals.
