How African Health Systems Can End their Dependency on Foreign Aid

Are African countries too dependent on external funding for their public health programs? Who provides these funds? How are the decisions made? In the global health unfiltered podcast episode entitled “Examining the dependency in global health financing” Dr. Sam Oti, a Senior Program Specialist at Canada’s International Development Research Centre (IDRC) shares his insightful views about the role of dependency in health financing in health systems in Africa.

External funding for health, i.e. funding from non-domestic sources, has contributed to impressive health gains over the years. This aid has helped fill a gap in funding for health programs in low- and middle-income countries (LMICs) where resources are often limited. It has supported the research and development of new treatments and vaccines for diseases that disproportionately affect people in LMICs thereby curbing the burden of infectious diseases. Most health financing in Africa primarily comes from a few sources: governments, out-of-pocket spending, external international organizations, non-profit governmental organizations (NGOs), and philanthropic foundations.

According to the World Health Organization, Sub-Saharan Africa (SSA) receives 13% of its funding from external donors. Globally, SSA is second only to the small Pacific Island States receiving 22% of its funding from external sources. Fourteen of the top 20 countries in the world with the majority of their health financing from external sources are in Africa with 30-65% of their health expenditure coming from external sources.

These statistics reflect a significant dependency problem. This is not to say external financing is bad because there is clearly a need for external funding in some countries. However, despite the benefits of external funding, it has perpetuated fragile health systems and dysfunctional institutions in many countries. How is this so?

Firstly, these funds bring about verticalization and fragmentation with no incentives for these programs to be integrated into the rest of the healthcare system. So the rest of the health care system suffers. Also, policymakers deal with multiple donors and so they are not spending enough time orienting their own health systems to work as they should.

Secondly, some external funding could displace domestic funding that could be allocated to the healthcare system. It has been shown that for every $1 spent on health aid, domestic funding towards health is reduced by 0.4 cents to even as much as 1 cent. The domestic funding that should have been used to improve the healthcare system gets directed to other sectors.

Lastly, these funds can contribute to poor ownership and complicate the prioritization efforts of policymakers. This is because every donor comes with their agenda and priority which may not align with the government's priorities.

In summary, for all the benefits that external funding brings, there are challenges as well. So, what can be done to address some of these issues?

Firstly, African governments need to act to fulfill previous unfulfilled health financing commitments. For example, in the early 2000s, African leaders signed the Abuja declaration committing 15% of their annual budget to health. To date, only South Africa and Rwanda have crossed that threshold. Corruption and poor governance have prevented many African countries from attaining the 15% budget allocation for health. Therefore, it is imperative that good governance strategies are implemented and corruption is abolished. This strategy should enable African governments to meet their health commitment to their people.

African governments equally need to reset the rules of engagement between policymakers and donors. This strategy should enable them to derive maximum benefits from external funding partnerships.

Moreover, the African diaspora could play a vital role in funding the healthcare system in Africa. About 160 million Africans live in the diaspora, and they are the largest financiers in Africa. In 2021, an estimated $95 billion of remittance came from the African diaspora versus $35 billion from overseas development assistance. Therefore, the African diaspora could come together and create a global healthcare fund that would reduce dependency on foreign aid. The major challenge is that African groups in the diaspora are too fragmented. They would need to look past ethnicities to come together under one vision to create an institution that would work to better the healthcare system back in Africa.