Towards Partnership in Health
Experiences in resource allocation in Tanzania, focusing on Sector Wide Approach (SWAp) and Health Basket Fund
Von Maximillian Mapunda / Weltgesundheitsorganisation WHO
This presentation provides an account of the reform measures taken at the national level over the last few years in Tanzania’s health sector. In particular, we will learn about how several major donors in the health sector including SDC have joined hands to work with the Ministry of Health, to jointly support the Tanzania Health Sector Strategic Plan with significant amounts of their development aid. We will learn about the achievements to date of this approach and the expectations for the future.
Development co-operation has been featuring, since the independence of almost all developing countries. Justification on development co-operation centres on the existence of a development gap between developed and developing countries. In the 1970s, it was a decision by the United Nations Forum, that each of the developed countries would allocate at least 0.7 percent of its Gross Domestic Product towards development co-operation. The form and content of development co-operation over the years has raised a number of questions and generated several arguments by the donors (developed countries) and the recipients (developing countries). The questions have largely been focused on the relationship between the donors and the recipient, and whether the co-operation has benefited the beneficiaries as it was originally intended. It is along these type of questions that the concept of partnership in development co-operation begun to evolve. Development of this concept was and is intended to rectify problems in the previous management of development co-operation.
In the case of Tanzania, the period between 1992-1995 marked the deterioration of the relationship between the Government of Tanzania and its principal sources of official external aid. The difficulties were seen to originate among other things with the long-standing failure by the Government to collect, as agreed, all of the counterpart funds arising from donors import support programmes. According to a report by Prof. Helleiner on development co-operation issues in Tanzania, donors were also disillusioned about the effectiveness of aid. It was within this period, when the Ministry of Health begun to undertake deliberate steps towards improvement of its relationship with donors who had suffered to some extent as part of the broader Government of Tanzania and donor relationship.
A Historical Perspective
The health sector is one of the largest beneficiaries of development co-operation in the public sector of Tanzania. In 1960s and first half of the 1970s, external aid to the health sector was channelled through the Government of Tanzania public finance arrangement. It is recorded that about 85% of the total Development budget of the Health Ministry were from donor funds. This arrangement enabled streamlining of external assistance within Government priorities in the plan of action. It further provided an opportunity to account external finance as part of Government accounts, making it more transparent in the Government donor negotiations.
The period beginning with the second half of 1970s recorded a departure from this arrangement. Donors began to operate outside Government budget, and sometimes even developing their parallel finance management arrangement. They criticised the government for diverting external finance from agreed activities. It was during this time, when the health sector experienced the emergence of several vertical programmes and other health programmes in the districts with less control of Government. The vertical programmes were like TB and Leprosy, School Health, Family Planning, Malaria Control, just to mention a few.
The new style of donors control in the management of development co-operation in the health sector brought about silent souring relationship between the Ministry of Health and its donors. Deterioration in relationship manifested itself in the increased number of projects and programmes that were designed and implemented bypassing the Ministry. The Ministry of Health on the other hand took little interest on what donors were doing to an extent that donors decided to form their grouping to share their experiences in the health sector irrespective of the Ministry of Health participation. While the Ministry of Health was criticising donors for taking their own route in project development and implementation, donors were criticising the Ministry for not providing direction in project development and management. This resulted in a number of donors showing mistrust to the Ministry with regard to financial control and management.
Another development was taking place within the health sector at this particular point. The Ministry of Health had by now acquired the first World Bank credit in the sector. The thrust of the Bank’s projects was to move towards sector investment projects. This was also another challenge to the Ministry.
The culmination of these criticisms was a mission that was called by the Ministry of Health in November 1993. The mission was intended to review the health sector including examining the status of development co-operation. The review among many other recommendations recommended the Ministry to develop a comprehensive plan of action, serving as a tool of addressing various health reforms that were taking place in the sector and at the same time providing direction for external support in the health sector. In order to address the issues of partnership in development co-operation, the Ministry of Health decided to involve all the stakeholders in the review.
The sequence of events in the revision of health policy and the development of its plans of action through partnership can be traced as follows:
Introductions of cost-sharing policy in level three hospitals followed systematically by level two and level one hospital. Formulation of the health strategy note resulting from round table dissemination of investing in health brokered by the World Bank.
Formulation of the proposals for health sector reform.
Developing a health sector strategic plan 1995-1998 which went on to be reviewed from time to time, into health sector reform plans of action (1996-1999 and 1999-2002).
The health sector reform program of work for 1998-2001 and plan of action 1998/1999 developed. They were both highly criticized for being ambitious with little participation of other partners.
Revision of health sector reform program of work and plan of action. Development of programs of work and plans of action for 1999-2002 and 1999/2000 respectively taking into account the use of Sector Wide Approach.
Developing a sector plan of action incorporating government and donor funding with some agreeing to pool funds at both central and district level. Developing the financial system utilizing platinum software for management of the joint basket funds.
Introduction to Sector Wide Approaches (SWAps) in Tanzania
Although the government and donors saw the need and importance of adopting a Sector Wide Approach as an effective way of planning and resource management in the sector neither of them was confident on the concept. Therefore as a matter of urgency the government in 1998 invited the author of the concept to expand the idea to all of the stakeholders. The training on the concept took place for two days. After the training development partners and the government were requested to sign an agreement for operalisation of the concept. The concept entails agreements on the common health sector plan. All of the development partners in the sector signed the agreement.
After signing of the SWAps memorandum, some of the development partners opted to deepen the implementation of the SWAp by adopting common financing and procurement approaches. They therefore established the Health Basket Fund. The fund was meant to contribute towards financing health sector priorities with other government funds.
Within this new context of partnership the role of each stakeholder was as follows:
- Government: Development of the health sector reform policies; steering the process of health sector reform plan formulation and implementation; financing the plan; ensuring the involvement of other stakeholders in the process; co-ordinating health sector reforms and other on going public sector reform.
- Donors: Participate in the process of the formulation of the plan to implement health sector reforms; participate in the joint appraisals, reviews and evaluation of the health sector reform plan; providing financial and technical assistance to the plan.
- Private sector and NGOs: Participate in the process of formulation of the plan to implement health sector reforms; contribute in increasing coverage of health services; participate in progress report meetings as well as joint appraisals, reviews and evaluations.
- Communities: Participate in providing their opinion at the time of policy formulation, consulted at the time of appraisals, reviews and evaluations. They finance the program through various sources; e.g. development levy, community health funds and other community contributions.
Other relevant Ministries: Ensure conformity between health sector reforms with other public sector reforms; ensure the co-ordination of health related activities among government Ministries; participate in plan formulation, appraisals, reviews and evaluation; establishment of effective relationship between the Ministry of Health and donors.
Implementation of the health sector plan of action in the context of SWAp began in the financial year of 1999/2000. The implementation begun by signing of memorandum of understanding, agreement on health policies and vision of the health sector and subsequent development of the program of work 1999/2000-2000/2001 and plan of action for 1999/2000.
The SWAp concept was then advanced into common or joint implementation mechanisms among the donors participating in the financing of the health sector plan of action. The experiences therefore are different at various stages and process. For instance it has not been possible for the multilateral to join the health basket fund and two of the bilateral because of their internal rules and regulation for accounting, nevertheless all signatories to the SWAp participate in the formulation and financing of strategic health plan.
Potential elements for Partnership
The establishment of the partnership took a long time due to several negotiation meetings with the partners. However, the negotiations resulted into:
- Shared vision: A shared vision seems to play a particular role in creating the sense of partnership in development co-operation. Recognising the importance of it, the Ministry of Health involved fully its partners in the development of health reform policies and its plans of action as it has been described above. It is also reflected in Public Expenditure Reviews in which since 1998 all partners are fully involved.
- Dialogue, Accountability and Transparency: Several dialogues have been going on between the Ministry of Health and its collaborating partners, in developing the current plan of action. However, dialogue is an on going process. At the moment dialogue is used to arrive to procedures within the plan of action that will enhance accountability and transparency thus attracting other donors to join common arrangement in implementing plans of action.
- Dispel of Mistrust: One of the difficulties for effective partnership is the existence of mistrust between donors and recipient Government. Mistrust can arise because of individual relationship rather than institutional. In the absence of forums for meetings, individual relationship dominates the scene and drives the partnership in the wrong direction. To redress this position the Ministry of Health has proposed quarterly meetings with the donors contributing to plans of actions. Moreover, it has assured donors, that each fund provided for health will be spent for the purpose it was intended. Partners are also very free to consult chief executives of the Ministry regarding the performance of the plans of actions.
- Ministry of Health assertiveness: The Ministry of Health is often addressing these issues of development co-operation in various levels of internal meetings. This facilitates Ministry officials to always be aware of what is going on and adopt consistency in negotiation with the donors. The Ministry of Health has also taken on board the Ministry of Regional Administration and Local Government, which is responsible for administration and management of all health services under local authorities. In order to enhance decentralisation of health services to local authorities the Ministry of Health and Regional Administration and Local Government are assisting local authorities to establish district health boards that will ensure community involvement in the management of health services at the district level.
The adoption of SWAp has increased the visibility of resources allocation and expenditure in the sector. It has also opened a space of discussions between the government and donors that is supportive rather than confrontational. You will also notice that since the adoption of the SWAps resources in the sector have grown up as seen in the next chapters.
Other important potential elements for partnership still need to be addressed: Current bilateral agreements; logical framework of planning used by most donor agencies in developing project documents; some donors’ culture of supporting vertical programmes and projects; supervisory missions from individual donors have not been eliminated completely.
The Health Basket Fund
Process towards agreements on the above followed three steps: The first step was a common agreement on the concept of Sector Wide Approach (SWAp). It was concluded in the first half of 1998, when all stakeholders were invited in a workshop to study the context and contents of SWAp. The workshop culminated with signing a memorandum of understanding for SWAp.
Step two was widening participation and involvement of all stakeholders in the formulation of programs of work and plans of action through a taskforce that was jointly appointed.
The third step was consensus or agreements on common administration and management of the programme commonly refereed to as Joint Mechanism or Health Basket Fund. The Ministry of Health together with seven donors (DANIDA, DFID, SDC, Ireland Aid, Norwegian Embassy, Netherlands and the World Bank) had reached a stage of developing a common arrangement for procurement and financial disbursement to execute the health sector plan of action. Two other donors, KfW and GTZ, joined later. The Health Basket Fund began with six donors in July 1999. In July 2000, the Embassy of the Netherlands joined the group.
The Health Basket Fund is seen as an instrument for Tanzanian ownership of all activities in the health sector. It is used to promote more coordinated planning and implementation of activities in the sector. Under this approach, it is envisaged that various projects and programmes will be gradually streamlined and consolidated so that in the long run, all development partners in the sector will support a common programme under agreed objectives, priorities and outputs applying common implementation mechanisms and strategies.
The Fund is disbursed through the government exchequer mechanism. It therefore uses the same procedures and financial rules and regulations of the government in implementing activities. There are however separate accounting manuals to account for the Health Basket Fund. The accounting is made to the Health Basket Fund Committee. The Basket Fund Committee is responsible in approving plans that are being financed through the Fund and receiving progress reports both financial and technical. This arrangement can be seen as an interim arrangement towards budget support. As more trust is being gained between the Ministry of Health and the partners contributing to the Health Basket Fund, it should be possible to move towards the budget support since this will reduce the current transactional costs. The decreasing pattern of donor spending in the health sector from 53% in 1997/98 to 30% in 1999/00 seems now to change its trend as there is slight increase recorded in the provisional estimate figures for 2000/01 (39%). However, the figures on actual spend on health in each year shows an even lower proportion of donor spend record on the budget.
The level of actual donor expenditure in the health sector has got different explanations depending on the type of donor funding. For donors outside the Basket the reasons could be that they disburse less than their commitments that were used for allocation. Low utilization of Health Basket Fund is attributed to several reasons, which range from administrative, institutional and managerial as follows:
- Poor orientation of the system: Although the system tries as much as is possible to integrate with the government system, there are procedures that are new to the staff. This includes the management of Health Basket Fund holding account in the Bank of Tanzania, budgetary and disbursement procedures of the Fund and adoption of General Service Fund codes. This took some time for officers to orient themselves. Even now we cannot confidently say that they are fully oriented, as they are still some issues in which they would usually seek clarifications.
- Strict condition for releases and accounting: To enhance financial controls and proper use of the Fund funds are only approved for disbursement once the Basket Fund Committee is satisfied with the progress report both technical and financial reports. The speed of adaptation for staff in these stringent procedures is not coping up with the available resources.
- Centralised financial reporting "Platinum": This system of financial reporting is new to the government. It was brought in the Ministry of Health as one of the pilot Ministries. It came at the same time when the Ministry was introducing the Health Basket Fund. The Ministry was therefore piloting two things at the same time. Ministry's staff could not compile some of the reports since they were supposed to be compiled centrally by the Ministry of Finance. There are also other financial reports which the Ministry of Health does not control, e.g. Holding Account balances. Ministry of Finance is managing the Account. Failure by the Ministry of Health to provide these reports has resulted in stopping releases.
- Late crediting of the Holding Account by donors: There are cases in which the Ministry of Health has applied to the Ministry of Finance for the Fund only to find that there were no sufficient funds in the account.
- Lack of capacity to utilise funds: Lack of capacity can be expressed in the following dimensions: one is over stretching of staff who can not implement extra activities because of their existing numbers. In other words we can say the plan they present is ambitious. On the other hand it is ignorance among the staff on the procedures of spending the Health Basket Funds (rules and procedures for the disbursement of funds are not known thus delaying disbursement and expenditures).
- Rigid government expenditure procedures: The procedures of expenditure within the government system itself is sometimes frustrating, staff are easily tempted use alternative resources from the projects if there are available. For example a government cheque may take an average of two to three weeks from the time of originating payment voucher to the writing of the cheque. Procurement of services such as those of printing or computer servicing may take the minimum of three to four months since Ministerial Purchasing Committees are not meeting as regularly as they would be supposed to do.
These are some of the problems associated with poor performance of the Health Basket Fund. Since the diagnosis of the problems are known to all stakeholders in the Health Basket Fund, the next steps is to address these problems in view of eliminating them and consolidate the operation of the Fund.
Features that had emerged in resource allocation as an outcome of the implementation of SWAp and Health Basket Fund:
- Spending is increasing at the priority level: The Ministry of Health in line with the overall decentralisation programme is expected to increasingly allocate funds to the local government level, to enhance service delivery at the most accessible level for majority of health services beneficiaries. In the period of health basket fund implementation that has been the case. In 1999 18.8% of funds were allocated to local government level; in 2003, already 31.0% of funds.
- Spending by activity type: Over the last three years there has been over 18% growth of public spending to the sector. The data as they stand show an increase of 37% for preventive services compared with 1.9% in hospital share.
- Stimulated fiscal decentralisation and allocation formula: The basis for the geographical allocation of government subventions in general has long been recognised not to be transparent, and to be relatively insensitive to policy changes. This is also the case within the health sector, with the rationale for allocations to Local Government Areas unclear and not transparent.
Basket funds to councils are allocated on a simple per capita basis, at $0.50 per capita. This, while objective and simple, undoubtedly results in an allocation which reflects health and health service need less than might be the case with an alternative formula, and which cannot really be considered pro-poor.
The Ministry of Health has been working over the last year to develop a more needs-based formula for the allocation of financial resources to Local Government Areas. The most recent proposal identifies a list of ten potential factors to be considered, but suggests that allocations to councils initially be based on four factors:
- Age and sex-weighted population (50%);
- Poverty levels, based on the Poverty Welfare Index of the geographical area under question (15%);
- An index of mileage, to and within the Local Government Area (15%); and
- Burden of disease, to incorporate under-five and adult mortality rates plus any others available (20%).
In the past few months, work has also been commissioned through the Local Government Reform Programme to review existing mechanisms and to propose an objective, equitable and transparent system of intergovernmental grants. The draft report proposes options for both vertical and horizontal resource allocation, and includes proposals and simulations for the health sector. Three options are presented:
- Population (100%), as with the current basket fund. This is both simple, objective, and transparent, and recognises the size of the Local Government Areas’ population as the primary determinant of demand for health care;
- Population (80%), land area (15%) and poverty count (5%), recognising the greater needs of rural, poor Local Government Areas. Weights were determined based on implicit policy priorities;
- Population (70%), poverty count (regional) (10%), vehicle route mileage (10%), and infant or under-five mortality (10%), most closely reflecting the Ministry of Health proposed formula, but with an increased weighting for population.
Issues of data availability, reliability and the relative incentive effects of different factors will need to be taken into account in whichever formula is selected, as will the need to minimise the effect of any changes in Local Government Area allocations, up or down, through phasing of implementation of the formula. In addition, close monitoring will be required to ensure that releases based on the formula actually reach the intended beneficiary sector, and that funds are spent in accordance with national and local priorities.
The intention of the Local Government Reform Programme is to introduce the new transfer system for 2004. It is therefore expected that further modelling of the impact of the different options will take place over the coming months, and it would be useful to clearly document the baseline allocations, and to monitor progress towards a stated equity objective in coming years.
Partnership in health development is a key to effective co-ordination and use of donor funding. Planning on the basis of SWAp is a long term and negotiated learning process between co-operating partners and the Ministry of Health. SWAp is also an instrument for building partnership. The Ministry has taken the first of many steps and already the outcome is improved partnership. Donor resources are channelled to the country's health specific priorities. Open donor/Ministry partnership has led to constructive dialogue, accountability and transparency. The successes in the partnership are also linked to the following experiences:
- It is a process; therefore it may take some time since it needs understanding and agreements among partners.
- There is fear to some partners, especially to those who think that they are going to loose their spheres of influence.
- It is a process of forward and backward movement depending on political environment.
- It is time consuming in servicing stakeholders' missions for reviews, appraisals and evaluations.
- It creates transparency and trust among stakeholders.
The recent development by the DFID shifting to budget support does not have an effect in the short run since the Ministry of Health was compensated with the same amount by raising the government ceiling to the Ministry of Health. However, they may be worries in the future since the priorities will be set in the Ministry of Finance in the context of the total government resource envelop.
*Maximillian Mapunda, National Program Officer, Health Systems Development, World Health Organisation, Country Office for Tanzania. Contact: firstname.lastname@example.org. A more complete version of his input including tables and graphs as well as the powerpoint presentation can be downloaded from the Symposium’s website.