Building sustainable health financing options for emergency response: Lessons from the COVID-19 response in Africa

 

The ferocity with which global pandemic has affected countries globally has highlighted the importance of emergency public financing. The rapid spread of the disease requires a rapid, proactive and comprehensive approach in order to control its transmission. As such, governments need to have adequate funds availed in a timely manner to the health sector to finance preparedness, mitigation and post epidemic recovery while ensure continuity of care for essential services. Barroy et al identify good public financing measures as use of existing budgetary flexibility and exceptional spending procedures for quick action, accelerating revision of finance laws to secure additional earmarked funding and accelerating budget execution and funds release to the frontlines. Lack of clear institutional arrangements and legislation for use of public financing in the context of emergency financing limits the effectiveness of the expenditures and ensuring accountability when urgent action is needed.

What emergency financing measures have been undertaken by African countries?

In trying to explore the emergency spending actions undertaken by African countries to bolster their health sector response in the face of COVID19, we reviewed the WHO public financial management (PFM) global data base[1] with a focus on African countries. It is worth noting that WHO provided guidance on some of the immediate spending actions that can be taken with existing budgets and how to secure budget for COVID-19 response through revisions in public finance laws. In this article we review experiences across African countries focusing on actions undertaken to avail spending and not amount raised.

In Table 1, we summarize the immediate spending actions undertaken by African countries as part of their COVID-19 response. We summarise the financing measures across 3 categories. These include: the majority of the countries established new special funds for COVID-19 (26 countries), re-allocation/supplementary budgets (14 countries) and activation of emergency spending for countries within existing contingency/disaster management funds (4 countries).

Table 1: Emergency financing measures undertaken by governments in the African Region in response to COVID-19

Measured Undertaken Countries
Established special funds for COVID-19 (26 countries) Benin, Botswana, Burkina Faso, Cameroon, Chad, Comoros, Congo, Democratic Republic of Congo, Djibouti, Equatorial Guinea, Gabon, Ghana, Kenya, Lesotho, Mauritania, Mauritius, Nigeria, South Africa, Uganda, Zambia, Zimbabwe, Côte d’Ivoire, Liberia, Niger, Senegal, Togo
Re-allocation/Supplementary budgets (14 countries) Cabo Verde, Eswatini, Ethiopia, The Gambia, Guinea Bissau, Madagascar, Mozambique, Namibia, Rwanda, São Tomé and Príncipe, Seychelles, United Republic of Tanzania, Uganda, Ghana
Contingency/Reserve Fund (4 countries) Uganda, South Africa, Malawi, Kenya

 

In terms of the newly established Funds, these have targeted at mobilizing resources from both government and the private sector. Some countries have relied on voluntary contributions from the private sector (e.g Uganda, Kenya, Nigeria, The Gambia), while in countries such as Liberia, generation of funds for the established Relief fund took a unique approach funded through a levy of 25% of net salaries of all employed persons (public and private sectors) for two months (May, June 2020) deducted as payroll tax through the Liberia Revenue Authority. In Kenya and Rwanda senior government leaders took salary cuts, and used as a source for these new funds. While some countries enacted COVID-19 emergency response funds within the country’s PFM regulation to guide operations (e.g. Kenya), other countries developed new laws through legislative processes.

For the countries which relied on supplementary budgets, these prepared supplementary budget schedules which were approved by the legislature. Where re-allocations were done, these were done within the existing PFM laws on re-allocations/virements. In Ghana, enactment of emergency regulation allows for reallocations beyond stated thresholds.

For countries that had existing contingency/disaster risk funds (South Africa, Uganda and Malawi), declaration of state of emergency set off the use of resources from these funds. Experience in devolved health system shows a non-uniform application of laws on contingency/disaster risk funds. For instance, Kenya’s PFM law  allows for setting up of emergency funds at the sub national level government level (i.e. counties) which can be activated in case of disaster without further legislative action.

It is important to note that in some countries such as Mozambique, although a state of emergency had been declared, no COVID-19 specific budgetary measures were approved but routinely approved budgets for disaster management were deployed to support the response. The effectiveness of this measure depends on ensuring there is sufficient allocation to these budget lines.

In setting up emergency financing measures, the need for accountability (Botswana, Zambia) and speedy decision making (South Africa) have been emphasized. Zimbabwe relaxed procurement regulation to ensure speedy procurement of essential goods and services. However, in some other countries, ongoing incountry political processes have delayed necessary approvals and enactment of laws like the case of Lesotho.

COVID-19 has also paved way for accelerating reforms to improve expenditure efficiency to mitigate both the health and the economic effects of COVID-19. For instance, in Angola, structures with redundant functions were reduced with preferential consideration for staff at sub national level (local state administration) and freezing staff recruitement and promotions.  Others implemented measures to reduce spending in non-priority areas while safe guarding wages and health spending (Namibia, Algeria and Gabon). Ghana limited the award of new contracts with a focus on paying outstanding arrears.

Contingency reserve funds: do they offer an opportunity for better health emergency response?

We note that only a few countries in Africa drew upon their contingency reserves to respond to the COVD19 pandemic. Contingency reserve funds have been set up as part of the budget laws by mandating an allocation of a certain percentage of annual budget for contingency spending . The purposes and the procedures are usually spelt out in the law. These funds act as self-insurance against liabilities such as national disasters . Spending is easily activated when an emergency is declared.

The number of countries that had to establish new Funds when compared with those that activated emergency spending legislation shows the need for countries to focus on always being prepared. Earlier lessons shared from USA and China showed how activation of emergency budget legislation enabled activation of contingency funds and reserves to facilitate quick response. The lack (and limited use) of these funds in response to COVID19 highlights an important gap that countries need to address to prepare for future epidemics and building resilience.

African countries should consider natural disasters and health emergencies as explicit contingent liabilities so as to reduce reliance on supplementary budgets and setting up new funds during emergencies. The use of contingency reserve funds enables quicker disbursement but also is open to a proper budget process that allows scrutiny and oversight thus strengthening accountability.

Emergency preparedness in the “new normal”

While COVID19 has been a tragic pandemic, the new post COVID19 normal will require a renewed focus on stronger institutional arrangements backed by legislation to ensure countries are able to implement emergency spending actions with better coherence and consistency.  As countries explore improved strategies of funding their health systems post COVID19, we argue that in addition to investing more in common goods for health to prevent emergencies. Countries should legislate within their budget laws for contingency reserve funds that can easily be activated for health emergencies.

Acknowledgement

We acknowledge the excellent support and inputs from Federica Margini (WHO consultant) for the development of the PFM COVID-19 Database. We thank all the contributors to the WHO PFM web-survey.

About the Authors

1Juliet Nabyonga-Orem; 2Kwesiga Brendan; 3Christabel Abewe; 4Helene Barroy; 1Prosper Tumusiime

 1Health financing and investment program, Universal health coverage life course cluster; World Health Organization; Regional Office for Africa; Congo-Brazzaville

2Health financing and investment program, Universal health coverage life course cluster; World Health Organization; Kenya Country Office; Nairobi- Kenya

3Health financing and investment program, Universal health coverage life course cluster; World Health Organization; Uganda Country Office; Kampala-Uganda

4World Health Organization, Health Systems Governance and Financing; Geneva

Declaration

Authors declare no competing interests

[1] The WHO COVID PFM database compiles information generated through a PFM web-survey designed and administered in April-May 2020 by WHO and other primary and secondary sources of information on: emergency spending measures, enactment of spending plans, formulation of spending plans, spending modalities and reporting mechanisms.

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