• Kenya’s 2021-22 budget estimates gave health its biggest allocation ever, but it still fell short of the Abuja declaration.
• Dr Tedros Adhanom Ghebreyesus said there is enough evidence health spending is an investment, not a cost.
Image: PSCU
Twenty years ago on April 27, 2001, African heads of State, meeting in Nigeria signed a seven-page document promising to do everything possible to defeat HIV-Aids and tuberculosis.
On page five of the document is a line that says, “We pledge to set a target of allocating at least 15 percent of our annual budget to the improvement of the health sector.”
This unfulfilled pledge remains a thorn in the flesh of African governments. It is popularly known as the Abuja Declaration.
Kenya’s 2021-22 budget estimates gave health its biggest allocation ever, but it still fell short of the Abuja Declaration.
What became of it?
Health spending in Kenya has been rising slowly since 2013, when the current government came to power.
Between 2013 and 2020, spending on health rose only by two percentage points, from 7.8 per cent in 2013 to 9.1 per cent of the entire budget in 2020. This is according to an analysis of both annual financial budgets of both national and county governments.
This still falls short of the Abuja Declaration and the government’s own commitment to health as laid out in the ruling Jubilee Party’s manifesto, which targeted 12 per cent by 2018-19.
Although the Abuja Declaration sets a target of 15 per cent, the World Health Organization (WHO) has not set a specific target for member countries.
The current director general, Dr Tedros Adhanom Ghebreyesus, said there is enough evidence health spending is an investment, not a cost.
“The burden of evidence that higher public spending on health tends to improve financial protection for individuals is irrefutable,” Dr Tedros said in an article he published in the BMJ Global Health Journal in 2019.
“In short, more money for health is good; more health for the money is even better.”
In 2019, the WHO also published a report, Public Spending on Health: A Closer Look at Global Trends, which shows higher public spending on health tends to improve financial protection for individuals.
“Globally, public spending on health increased as country income grew, but low-income countries are lagging behind,” the report says.
This is partly true for Kenya. The 2013-14 budget was the first under the devolved system of governance, where most health functions were transferred to the 47 counties.
An analysis of Kenya’s spending since the 2013-14 budget to the 2021-22 shows a steady increase in health spending.
It also reveals the country has been spending most of its health allocation on recurrent expenses such as salaries, than on development projects.
Health is currently financed by both the Ministry of Health and the county health departments.
In 2013-14, the Ministry of Health’s allocation of Sh36 billion constituted 3.4 per cent of the national budget.
At least 43.9 per cent of this money went towards development expenditure, according to the Health Policy Project, which carried out an analysis of the two budgets.
The analysis shows 56.1 per cent went to recurrent expenses.
The Health Policy Project (HPP) is financed by the United States Agency for International Development (USAID).
In 2014-15, the Ministry of Health was allocated Sh47 billion, constituting four per cent of the national budget.
The development health budget for 2014-15 accounted for 45 per cent of the total Ministry of Health budget, with the recurrent share accounting for 55 per cent.
The Ministry of Health's recurrent expenditure comes as salaries and grant transfers to national referral hospitals and other semi-autonomous government agencies under it.
Counties are funded separately through national revenues and the Equalisation Fund. Money in the Equalisation Fund is given to marginalised counties to bring them up to par with the rest of the country.
When you combine both the Health ministry allocation (Sh36 billion) and all counties’ health budgets (Sh42 billion) in 2013-14, Kenya’s total allocation to health (total of Sh78 billion) was 5.5 per cent of the national budget.
In 2014-15, the Ministry of Health was allocated Sh47 billion and counties devoted Sh64 billion to health, raising the share to 7.5 per cent of that year’s budget.
“However, substantial variations between counties are also noted,” the HPP analysis shows.
The counties spent 75 per cent of their health money on recurrent expenditures in both financial years.
This is against the Public Finance Management Act of 2012, which recommends a minimum 35 per cent of county expenditures be earmarked for development in the medium-term.
The Senate recommends that counties allocate 50 to 60 per cent of their total health budget to personnel expenses.
Rising fortunes, still below par
Overall, the total allocation to health has continued to rise till today.
In 2015-16, counties allocated Sh85 billion to health while the Ministry of Health (MoH) received Sh59 billion, pushing the total health allocation to 7.7 per cent of the national budget.
The data for the Ministry of Health can be obtained from budget statements read every year. However, the county budget data can be obtained from the Commission for Revenue Allocation, the Office of the Controller of Budget and, in some instances, the counties.
In 2016-17, MoH received Sh60 billion while all counties allocated Sh92 billion to health. The total share of health reduced to 7.6 per cent.
In 2017-18, MoH received Sh62 billion while counties gave Sh105 billion to health, with the total being 8.2 per cent of Kenya’s budget.
The following year (2019-20) was the highest so far at 9.5 per cent after MoH received Sh90 billion and counties allocated Sh117 billion to health.
In 2019-20 the share fell slightly to 9.1 per cent but allocations by both counties (Sh124 billion) and MoH (Sh93 billion) went up. That's because that year Kenya had a large budget of Sh3.08 trillion, up from Sh3 trillion the previous year.
The 2020-21 budget shows MoH received Sh114 billion, but it is not clear how much the counties have spent on health.
In the 2021-22 budget read by Treasury CS Ukur Yatani, MoH received an increase to Sh121.1 billion.
“Of this amount Sh47.7 billion will fund activities and programmes for the attainment of Universal Health Coverage,” Yatani said in the budget statement.
Raising more funds
After the budget speech on June 10, 2021, audit firm KPMG published an analysis on whether Kenya has the capability to raise its health spending to 15 per cent.
The analysis says this is only possible if Kenya raises more revenue domestically by expanding the tax bracket.
“Increase in tax revenue collection will serve as the major driver for increased government spending in health,” KPMG’s associate director for Tax and Regulatory Services Stephen Ng’ang’a said. He said this in a public analysis KPMG released just after the budget was read.
He advised that Kenya should look for ways of taxing the informal sector, because the country’s tax burden remains unevenly distributed, with the formal sector carrying most of the weight.
This may raise enough money to fund health services.
He added, “The health sector inarguably serves as the country’s power store that builds human capital, improves the welfare of the society, safeguards the country from health pandemics and improves the productivity of the people.”
In general, nearly all African countries have a long way to go.
Some countries have reached the Abuja Declaration threshold in some years and wavered in other years.
For instance, in 2014, only Malawi, Ethiopia, Gambia, and Swaziland, had reached the 15 per cent target, according to the last count by the Global Health Expenditure Database.
A new analysis of the latest expenditure across Africa may reveal a different picture.
Edited by A.N