Kenya’s health ministry goes big on foreign borrowing

By Gatonye Gathura

The Ministry of Health has significantly increased its donor loans in the last two years mainly to pay for the controversial leased medical equipment.

Data shows donor loans to the ministry to have increased from Sh 6.9 billion in 2017 to Sh15 billion in 2019.

In 2017/18 the ministry got Sh18 billion for its Sh30.6 billion development budget from donor loans and grants. But in the ending financial year, this budget jumped to Sh41.6 billion with donors providing Sh24 billion, much of it in loans.

A detailed analysis of 2018/19  health budget by the US-funded Health Policy Plus (HP+) project, says the ministry has significantly moved from donor grants to loans.

The contribution of donor loans to the Ministry of Health (MOH) development budget, the analysis indicates to have expanded from 22 per cent to 37 per cent within three years.

This, the report says indicates donors to have reduced their contributions to the ministry through grants which the government has substituted with donor loans.

The reason why the shift, the analysis suggests it’s because loans, unlike grants, are more predictable sources of financing.

“We need to reconsider out appetite for loans at the health ministry because I think some officers may be over committing the government,” said Sabina Chege, the chair of the National Assembly Health Committee.

Ms Chege in a morning TV talk on Tuesday said they have scrutinized the 2019/20 health budget and found a lot of what appears to be undeclared but possibly unnecessary loans.

Of the Afya House development budget for the ending financial year, the single biggest expense, Sh9.4 billion went into repaying for the controversial medical equipment scheme.

The Medical Equipment Programme was allocated Sh4.5 billion in 2017, Sh5 billion in 2018, and then significantly increased to Sh9.4 billion this year.

During the ending financial year, Kenya also borrowed Sh7 billion from China mainly for CT-scanners sourced from the same country.

This resulted in a total allocation of Sh16.4 billion for the equipment-related budget calculating to 40 per cent of the entire MOH development budget.

The MOH was allocated a total of Sh90 billion in the 2018/19 budget compared to Sh60 billion allocated during each of the two preceding years.

“The MOH absolute budget increased by 50 per cent over the three-year period,” says the report.

Comparatively the combined health allocation to the 47 counties in the ending financial year was Sh117 billion just about Sh27 billion more than provided to Afya House.

But despite an overall increase in budgetary allocation to the health sector, the analysis casts serious doubts on its adequacy to effectively finance the Universal Health Coverage (UHC) scheme.

In the ending financial year, UHC was allocated Sh5.1 billion from donors, ranking as the second-highest priority among all MOH programmes, after the medical equipment.

During the same period, the counties increased allocations to health to Sh121.1 billion from Sh91.8 billion in 2017.

However, about 80 per cent of this money is allocated to personnel emoluments, as opposed to the recommended 50 to 60 per cent.

“A high proportionate allocation of recurrent budget to personnel emoluments means that a county is reserving fewer resources for other critical health inputs essential for the delivery of care,” says the report.

Nairobi, Mombasa, Nyandarua and Taita Taveta counties allocated more than 90 per cent of their health budgets to staff emoluments with Bungoma putting 94.2 per cent in salaries, the highest in the country.

As a consequence, the analysis shows the heavy spend on salaries is already stifling the quality of health care in the country.

“Allocations for medical drugs and non-pharmaceutical supplies, considered essential health inputs, have been decreasing,” says the report.

The two items combined, the report says were allocated at 14.6 per cent in 2017 but decreased to 10.1 per cent in the ending financial year.

While the CS for Health Ms Sicily Kariuki has underlined preventive and promotive health interventions as the bedrock for UHC, financial allocations to the same are extremely minimal.

“Countries we have compared notes with such as Thailand and Cuba have demonstrated that investment in preventive and promotive health interventions has a 10 fold return on investment hence the need to focus on these interventions under UHC,” says Kariuki.

However, the budget analysis shows allocation to preventive and promotive programmes to have stagnated at about 11 per cent since 2017.

“The MOH needs to align resource allocation to policy priorities, especially funding for preventive and promotive health services,” says the report.

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