REPUBLIC OF KENYAGlobal Conference on Gearing Macro-Economic Policies To Reverse the HIV Epidemic Presentation by: John Kamigwi Deputy Director, NACC Kenya in Brasilia, Brazil, 21st November 2006
Kenya Country Profile • Kenya is on the East Coast of Africa, bordering Tanzania, Uganda, Sudan, Ethiopia, Somalia and the Indian Ocean • Population (2005 Est.): 33.4 million • Fertility Rate: 4.9 • Infant Mortality Rate per 1,000 (in 2005 Est): 77 • Under 5 Mortality Rate per 1,000 (2005 Est.): 115 • Maternal Mortality Rate 100,000 (2003 Est): 414
Kenya Country Profile cont. • Economic growth had stagnated in 1990s but has picked up since 2003 • GDP growth rate in 2005 was 5.8% compared to 4.9% in 2004 (and 4.5% for African Continent and 4.3 for Global Economy). • Agriculture contributes close to 25% of GDP and is a major employer. • Other key sectors include Tourism and Manufacture • Poverty levels are high, with over 50% of population living below poverty line (US$1 per day).
HIV and AIDS Trends & Impacts • HIV and AIDS is a major development issue – a recent study estimates that high morbidity and mortality could result in up to 14.5% loss in GDP. • Since 1990s, HIV and AIDS has reversed many of the gains previously accrued • HIV and AIDS affects all MDGs.
HIV and AIDS Trends & Impacts • Over 1.5 million people have died as a result of HIV and AIDS since the 1st case in 1984 • Almost 1.3 million people are living with HIV • HIV and AIDS has resulted in over 1 million orphans, and the number is growing by the day with long-term implications for all sectors
HIV and AIDS Trends & Impacts • About 263,000 people need ART • Currently, about 90,000 people (or 34% of those in need) are on ART • HIV and AIDS has a major gender dimension: about twice as many adult women being infected compared to men • HIV and AIDS has to be dealt decisively if women development has to be achieved
National Response and Challenges • Like in many countries, in 1980s and early 1990s there was general denial and epidemic was considered just a medical issue. • In 1999, HIV/AIDS was declared national disaster. • Multi-sectoral response was adopted, bringing together all stakeholders coordinated by National AIDS Control Council under Office of President • The first multi-sectoral strategic plan covered 2000 to 2005
National Response and Challenges • Funding of Stakeholders, incl. Civil Society, using public funds was initiated. • A major challenge was restructuring Government financing mechanisms to effectively handle multi-sectoral response. • M&E to ensure efficiency and effectiveness of interventions was another major issue. • The ``Three Ones Principle” is being implemented incl. One M&E Framework. • Capacity of various stakeholders to effectively participate is being built on ongoing basis, incl. Planning, financial management and M&E.
General Public Finance – Structural Adjustments • From mid-1980 Kenya started implementing Structural Adjustment Programs (SAPS) led by IMF • Between 1986 to 2000, Social Sector, including Health and Education, was targeted for reduced government spending • User fees became a major source of additional resources in the socio-sector. However, though a noble idea, poverty limited access in many cases. • Investment in Health and general socio-sector was drastically reduced despite rising population, and in many cases was dependent on user fees.
General Public Finance – Structural Adjustments Cont. • Wages in public sector, including health, remained low • Absorption of newly trained health personnel from Medical Colleges was drastically reduced, and many doctors and nurses migrated to developed countries • To further reduce the government wage bill, retrenchment was carried out from 1990s - initially on voluntary basis
General Public Finance – Structural Adjustments Cont. • Retrenchment often led to the most experienced personnel (incl. nurses) leaving the service, thereby seriously affecting service delivery. • Though some room was provided in health, recruitment was generally frozen leading to major staffing shortages and succession gaps. • Grants and staffing that used to be provided by Govt to non-public health facilities, especially in very needy areas stopped, weakening the non-public sector. • All these developments set the stage for serious personnel and infrastructural gaps resulting from HIV and AIDS and TB epidemics from late 1990s.
General Public Finance – Structural Adjustments Cont. • To qualify for IMF programmes (and attract funding by other partners) the government has over-time aimed at: • Inflation target below 5%. • Low Budget Deficits or Surpluses
General Public Finance – Structural Adjustments Cont. • Inflation has been contained below 12% (see figure). • The budget has virtually been balanced. • Exchange Rates have been stable for a long time
General Public Finance – Structural Adjustments Cont. • In FY2004/5 the budget surplus on commitment basis was 0.3% of GDP, while in FY 2003/04 deficit was -0.4% of GDP. • External funding has been unreliable and covers limited timeframes – and hence cannot be relied on. • The Government is therefore avoiding factoring external pledges into the annual budget, and thereby heavily depending on tax revenue • Mainly through increased tax revenue (which has rapidly increased since 2003), total government revenue and grants increased by 11.5% from US$4.26 Bill in FY2004/05 to US$4.75 bill in FY 2005/06.
General Public Finance – Structural Adjustments Cont. • As a result of heavy dependence on tax revenue there has been difficulties in expanding the socio-sector infrastructure (including health) to effectively deal with HIV and AIDS epidemic • Furthermore, previous low capacity building in socio sector/health e.g. in personnel is continuing to affect service delivery.
HIV and AIDS Financing • Second Strategic Plan was developed & estimates that annual funding requirement would increase from US$338 million in FY2005/06 to US$605 million by FY2009/10 • Four priorities set with relative resource requirements as follows: (1) Prevention 24%; (2) Improved Quality of Life/Treatment 29%; (3) Mitigation of Socio-economic Impact 30%; and (4) Support Services 17%. • Specific vulnerable groups incl. women and youth are prioritised for intervention. • At the moment, only about half of the funding is available. • There is heavy dependence on external project oriented and off-budget funding including PEPFAR
HIV and AIDS Financing • Existence of large off-budget amounts results in serious coordination problems of aligning programme activities to national priorities. • This compromises the participatory planning and budgeting - MTEF processes, since key stakeholder do not participate. • This creates inefficiencies in planning and budgetary processes. • Tentative Resource Tracking findings indicate that relative to other priorities Quality of Life/Treatment is highly financed while Mitigation of Socio-economic Impacts is highly under-financed.
Intervention Outcomes & Impacts • Outcomes and Impacts: • Despite all the challenges. positive changes have been observed. • HIV/AIDS Prevalence has been fallen from 10% in 2000 to 5.9% in 2005. • Behavioural changes that reduce infection rates have been observed. • Kenya is one of very few countries where this is happening. • There is however an urgent need to strengthen both prevention and treatment. • In addition, mitigation of socio-economic impact is critical.
Public Finance Cont. • The government has increased allocations to the health sector and education (incl. free primary education). • ART drugs are free in public facilities. However, additional capacity and resources are needed to meet the needs. • Mainstreaming of HIV and AIDS in various sectors within the Planning and Medium Term Expenditure Frame (MTEF) is attracting additional resources within public sector and line ministries.
New ways of doing things • More needs to be done to address socio-economic impacts including the rapidly escalating challenge of orphans. • New financing approaches are needed. For example, a 1.8% budgetary deficit would be enough to provide the resources required to implement the National HIV/AIDS Strategic Plan. • Mainstreaming work will have to continue – both in public and private sectors. • The MTEF process should include all donor resources to be more effective. Pooling of resources is called for. • Long-term and sustainable financing is needed. • M&E needs to be strengthened.
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