REPUBLIC OF KENYA Global Conference on Gearing Macro-Economic Policies To Reverse the HIV Epidemic

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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

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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

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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 (US1 per
  day).

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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.

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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

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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

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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

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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.
• ME to ensure efficiency and effectiveness of
  interventions was another major issue.
• The Three Ones Principle is being implemented
  incl. One ME Framework.
• Capacity of various stakeholders to effectively
  participate is being built on ongoing basis,
  incl. Planning, financial management and ME.

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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.

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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

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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.

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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

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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

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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
  US4.26 Bill in FY2004/05 to US4.75 bill in FY
  2005/06.

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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.

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HIV and AIDS Financing

• Second Strategic Plan was developed estimates
  that annual funding requirement would increase
  from US338 million in FY2005/06 to US605
  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

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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.

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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.

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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.

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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.
• ME needs to be strengthened.

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• Thank You
• God Bless You