Africa's economy and financing in times of slowdown

For the last decade, Africa’s development has been propelled by high prices for export commodities, the discovery and exploitation of natural resources, new-found stability and governance improvements in key countries and the ripening demographic dividends.13 However, following the collapse of world prices for oil and other minerals, growth in sub-Saharan Africa decelerated to 1.5% in 2016, the lowest level since the 1980s, with the region’s real GDP per capita contracting by 1.1%; South Africa and oil-exporting countries accounted for most of the region’s slowdown.14 A recent International Monetary Fund report predicts a bleak outlook due to a dramatic drop in the price and volume of exports and falls in employment for 28 sub-Saharan African countries.15 Natural disasters, localised armed conflicts and the Ebola epidemic in west Africa have only compounded an already difficult situation. Although African economies are diverse and include 24 lower and upper middle-income countries according to the World Bank,16 the impact of the economic slowdown will be felt in many parts of a continent that is still heavily dependent on export commodities and vulnerable to political instability.

This is not the first time that Africa has had to cope with serious financial constraints. In the late 1970s and the 1980s, many sub-Saharan Africa’s countries were hit hard by the combination of high oil prices (which was then imported) and low prices for key export commodities, compounded by recurrent natural disasters and political instability.17 This led to economic recession, unsustainable debt and the imposition of austerity programmes that devastated public services. That negative economic cycle was overcome, also on the account of foreign direct investment in the continent and remittances from its diaspora.18 However, back then, mistakes were made; structural adjustment programmes and health sector reform policies were designed and implemented under the guidance of development partners. The general consensus is that these programmes and policies were largely ill-conceived and impacted negatively on the development of many of Africa’s fragile economies and nascent public services.19 In the health sector, these prolonged crises were all associated with falls in the value of public salaries and health workers numbers,20 frequent drug shortages and neglect of infrastructure and equipment maintenance. The introduction of user fees and community-based financing schemes did not alleviate the impact of insufficient public funds,21 with long-lasting regressive effects on population health.22

Past experiences also illustrate the different coping strategies that institutions and individuals adopted to weather the economic storm and bounce back. In Mozambique, prioritising essential primary care services and protecting personnel and generic drug expenditures helped protect the country’s health system during its civil war years.23 A focus on infectious diseases, essential drugs and context-specific primary health care (PHC) policies were the steps South Africa took to protect the health system from apartheid era distortions.24 25 Across the continent in the 1980s and 1990s, health professionals started selling public drugs to compensate for reductions and delays in their salary payments.26 In Malawi, international partners stepped in to support the top-up and payment of health worker salaries in the public sector.27 And many patients were forced to rely on their personal savings, remittances and borrowing to guarantee continued access to services.28

As well as facing the challenges of economic contraction, declining public budgets and political instability, many of the poorer countries on the continent presently have to contend with the changing priorities of donors and aid programmes (box 1).

The tensions between universal health coverage (UHC) and Africa's non-linear economic growth

With the prospect of economic contraction and shrinking budgets, many African countries will face great challenges in reaching the ambitious goals of UHC. How should they respond? Of course, achieving UHC has always implied the need for a medium-term to long-term plan to strengthen health systems and ensure sustainable, equitable and effective health financing policy.29 But there is a need to consider how the health system can withstand and be resilient in the face of an economic slowdown or contraction while still striving to expand access and services.

By resilient, we mean health actors, institutions and populations being able to maintain core functions and maintain good health when a crisis hits, and draw from the lessons learnt during the crisis to reorganise.30 Resilience also implies an ability to draw on personal resources to face adverse circumstances, ensure effective prioritisation and protect core functions that will allow to bounce back when the crisis is over.31 To build up resilience, measures are needed to reduce population’s exposure to infections, preventing common infectious diseases and ensuring effective surveillance mechanisms. Action is also needed to protect the population against dangerous practices and counterfeit drugs, and to provide them with reliable, trustworthy information and advice. These are some of the core public health functions that should define any health system, but that resources-poor governments often neglect, particularly during an economic slowdown.32 Furthermore, in some settings, informal providers and a variety of private practitioners happen to deliver a large proportion of healthcare, particularly to the poor33 34; in a resilient health system, these coexist with formal health services in a regulated way that provides training, monitoring, supervision and technical support, and enables informal providers to earn a living. Policies are needed to bring the different ways health services are provided in resource-scarce settings under the broad vision of UHC.

Squaring the circle of Africa's health policy dilemma

The goal of UHC should still apply in times of economic slowdown. If anything, there is even more of a need to ensure universal access to essential healthcare in times of economic crisis. But policies must incorporate the realities of non-linear economic growth and potential economic contraction. While solutions to Africa’s political and macroeconomic instability are important, they lie beyond the scope of this commentary. And while we recognise the fact that the impact of the regional economic crisis will be uneven across the continent, we argue that past experiences point to the general need to consider a certain set of health sector-specific policies.

At a macro level, efforts must be made to keep expanding the fiscal space for health in both low-income and middle-income African countries. Crises also often present unexpected windows of opportunity to access extra resources for health, reform health systems, adopt unusually bold actions and take on ingrained special interests for the greater good.35 Because of the increased leverage of international funds during an economic crisis, donors could be more effective in negotiating earmarked  windfalls from natural resources for social sectors, increased budget allocations for the health sector, reforms to make them more progressive introducing health-related levies and mobilising extra international assistance. At the regional governance level, the establishment of Africa’s Centres for Disease Control and Prevention is another example of how to improve the continent’s capacity to identify its own epidemiological issues and solutions to strengthen its health systems.36

At the meso (sector-wide) level, learning from the deleterious consequences of the Structural Adjustment Programmes in the 1980s,37 countercyclical measures should be brought in to mitigate the effects of the crisis on population health and health systems, and provide social protection for low-income and vulnerable groups. This is likely to be more feasible for those middle-income countries with wider fiscal space; as shown in Cuba,38 investments made at decentralised and district level of health administration and local health communities have the potential to boost system resilience.39 The introduction of National Health Insurance schemes should be piloted in phases to ensure the programmes are resilient to economic downturn, only to be scaled up in the following expansionary phases. During economic contractions, recurrent expenditures (paying for salaries, drugs and basic maintenance) often take precedence over capital ones.35 However, African governments could still find ways to maximise resources and reduce costs by moving away from wasteful input-based to performance-based financing,40 reducing out-of-pocket financing for vulnerable populations by eliminating user fees, introducing solidarity funds and contracting out services. Private providers and private resources should be brought into the UHC equation to be regulated and harnessed to improve their quality and avoid dangerous distortions,41 but also as a recognition of their importance as essential coping mechanisms that individuals and health systems fall back to when everything else fails.

At the micro (health programme implementation) level, priority should be given to preventive primary services as well as to the procurement and distribution of basic drugs, and to retain key personnel; public health programmes and surveillance mechanisms should be strengthened against communicable diseases to avoid possible epidemics.32 Ensuring funding for salaries and basic drugs will have to take precedence over setting up complex pooling arrangements, as well as conducting minimum infrastructure and equipment maintenance interventions to avoid irreversible deterioration. The spread of recent technological advances such as mobile telephones and finance may create opportunities for the introduction of more cost-effective interventions such as telemedicine, thus strengthening the existing systems.42

UHC principles have helped move forward Africa’s health systems for the past decade. Learning from past mistakes and from recent advances in health financing theory, national governments and international health partners can now adapt such principles to the continent’s current slowdown, identify policies to build resilient health systems and protect core functions and services for its population. The issues relating to health system resilience are to be given important considerations while developing policies for achieving UHC irrespective of the context, since different countries are at different stages in their progress towards achieving UHC.