Trends in national and provincial health and HIV/AIDS budgeting ...
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Page | 1 Trends in national and provincial health and HIV/AIDS budgeting and spending in South Africa. CEGAA Occasional Paper 20131 10 December 2013 By Nhlanhla Ndlovu, Mlungisi Vilakazi, Mlungisi Majozi, Fikelephi Sithole, Kwazi Mbatha & Teresa Guthrie Email: [email protected] Tel: +27 33 394 0845 Cell: +27 73 198 7219 Web: www.cegaa.org 1. Introduction The endless fight against HIV and AIDS would not have been possible without financial investment and rigorous research in the HIV and AIDS field. The recent procurement and distribution of the triple combination therapy for AIDS in South Africa depicts the commitment by government to intensify the fight against the pandemic and to enhance good adherence among those taking AIDS treatment. This breakthrough would not have been possible without financial commitment and political will. South Africa has the largest number of people living with HIV, estimated at 5,4 million, requiring various interventions to curb the spread of HIV and to mitigate the impact of the virus among those already infected. This requires ongoing financial and political commitment to the fight, with various stakeholders playing their roles actively. However the recent economic meltdown and budget controls for social spending have implications for what can be achieved in this fight. Thus, this paper provides an analysis of trends in health and HIV/AIDS budgeting and spending, as well as trends in some related spending areas that are important for effective HIV and AIDS management in South Africa. 2. The consolidated 2013/14 health budget review The total consolidated government spending (national, provincial and local government) grows from year to year, marking a real growth rate of 3.5 per cent in 2013/14, and a further 3.4 per cent in 2014/15. Such growth encourages the advancement of human rights through the provision of basic public services for South Africans. In nominal terms, the consolidated government budget
Transcript of Trends in national and provincial health and HIV/AIDS budgeting ...
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Trends in national and provincial health and HIV/AIDS budgeting and spending in South Africa.
CEGAA Occasional Paper 2013-‐1 10 December 2013
By Nhlanhla Ndlovu, Mlungisi Vilakazi, Mlungisi Majozi, Fikelephi Sithole, Kwazi Mbatha & Teresa Guthrie Email: [email protected] Tel: +27 33 394 0845 Cell: +27 73 198 7219 Web: www.cegaa.org
1. Introduction
The endless fight against HIV and AIDS would not have been possible without financial investment and rigorous research in the HIV and AIDS field. The recent procurement and distribution of the triple combination therapy for AIDS in South Africa depicts the commitment by government to intensify the fight against the pandemic and to enhance good adherence among those taking AIDS treatment. This breakthrough would not have been possible without financial commitment and political will. South Africa has the largest number of people living with HIV, estimated at 5,4 million, requiring various interventions to curb the spread of HIV and to mitigate the impact of the virus among those already infected. This requires ongoing financial and political commitment to the fight, with various stakeholders playing their roles actively.
However the recent economic meltdown and budget controls for social spending have implications for what can be achieved in this fight. Thus, this paper provides an analysis of trends in health and HIV/AIDS budgeting and spending, as well as trends in some related spending areas that are important for effective HIV and AIDS management in South Africa.
2. The consolidated 2013/14 health budget review
The total consolidated government spending (national, provincial and local government) grows from year to year, marking a real growth rate of 3.5 per cent in 2013/14, and a further 3.4 per cent in 2014/15. Such growth encourages the advancement of human rights through the provision of basic public services for South Africans. In nominal terms, the consolidated government budget
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allocations grew from R890 billion in 2011/12 to a revised estimate of R966 billion in 2012/13 and R1,05 trillion allocated for 2013/14. The budget is expected to grow to R1,23 trillion in 2015/15.1
The 2012/13 consolidated national and provincial health budget was revised from an estimated R122 billion to R126 billion nominally, growing further nominally by 6 per cent in 2013/14 to R133.3 billion. Notably, as the total government spending increases by 3.5 per cent in 2013/14 in real terms, the real health budget only increases by 0.5 per cent in the same year. The consolidated health budget is estimated to grow further in real terms by 3 per cent in 2014/15.
Year-‐on-‐year, for the 2013/14 – 2015/16 medium term, the consolidated health budget receives as a share of total consolidated government budget an annual average of 11.3 per cent. This is below the Abuja Declaration recommendation that governments should spent 15 per cent of their annual national budgets on health. Interestingly the consolidated national and provincial health HIV and AIDS allocations grow from year to year as part of the consolidated health expenditure, from 7.9 per cent in 2012/13 to 8.8 per cent in 2013/14 and 10 per cent in 2015/16, despite the slow growth of the overall health share in the total national expenditure.
The health HIV and AIDS spending (consolidated) also grows as a share in the consolidated government budget, from 0.95 per cent in 2012/13 to 1.15 per cent in 2015/16. These figures indicate the health HIV and AIDS allocations are increasing in the budget which should be accompanied by increasing health budget resources overall. Figure 1 below depicts this.
1 National Treasury. Medium Term Budget Policy Statement 2013. 23 October 2013.
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Figure 1: Consolidated national and provincial and national health and HIV and AIDS expenditure and percent shares of health and HIV and AIDS in consolidated government allocations (R’ million and %), 2009/10– 2015/16.
Sources: Health allocations: National Treasury 2007/8 – 2012/13 Medium Term Budget Policy Statements. HIV and AIDS allocations: National Treasury Estimates of National Expenditure (ENE) 2009/10 – 2013/14 and Estimates of Provincial Expenditure 2009/10 – 2013/14. Author’s calculations. Note this graph excludes the HIV allocations for the Departments of Education and Social Development, and workplace spending in other departments. As shown above, the national health allocations grow slightly from year to year in both nominal and real terms. There are variations in provincial health budget trends, as some provinces witness some real decline while others are growing. Using the 2012/13 revised preliminary outcome figures from the MTBPS 2013, only 2 provinces faced a decline in real allocations in 2012/13, i.e. Eastern Cape (1.1 per cent) and Northern Cape (0.6 per cent). The MTBPS 2013 also shows a real decline in provincial health budgets in 2013/14 for Free State (1.6 per cent), Gauteng (0.9 per cent), KwaZulu-‐Natal (0.7 per cent) and Limpopo (2.6 per cent). On average, the provincial health budgets have grown by 0.5 per cent in real terms in 2013/14.
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Consolidated na9onal and provincial health HIV and AIDS alloca9ons (incl. CG to provinces; NDOH alloca9ons, and provinces' own ES alloca9ons)
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Health HIV and AIDS as share of consolidated health spending
Health HIVand AIDS as share of consolidated government spending
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Figure 2: Total inflation-‐adjusted (real) provincial actual health spending (2009/10-‐2012/13) and budgets (2013/14-‐ 2014/15 (R’ billion).
Source: Estimates of Provincial Expenditure 2013/14; Medium Term Budget Policy Statement 2013/14. Authors’ calculations. CPI deflators used were sourced from Russell Wildermann, IDASA. The figure above shows a slight growth of 0.13 per cent in real health allocations in 2013/14, as compared to the real budget adjusted upwards for 2012/13. Based on the adjusted 2013/14 budget estimates (MTBPS 2013), the total consolidated provincial health budget grows by 0.5 per cent in real terms in 2013/14. Generally, the positive real growth shows that allocations have kept up with inflation.
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TOTAL In1lation Adjusted Provincial Health Budgets
2009/10 2010/11 2011/12 Outcome 2012/13Revised Estimate 2013/14 MTEF 2014/15 MTEF
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Figure 3: Provincial health budget estimates (R’ 000) and per capita allocations (R’), nominal, 2013/14.
Sources: Estimates of Provincial Expenditure 2013/14; Estimates of Provincial Expenditure 2013/14; 2011 Census Population Statistics. Author’s calculations. Further, provincial health per capita spending, using the 2011 Census population figures, indicates varying amounts spent per person in each province in 2013/14. Mpumalanga budgeted to spend the smallest annual amount per capita at R2,001, though a positive nominal increase from R1,867 per capita allocated in 2012/13, followed by North West at R2,184. Surprisingly Northern Cape, despite receiving the smallest share in health budgets among all provinces, spends the largest per capita amount on health at R2,917 followed by Free State at R2,875 per capita. Per capita spending assists us to understand the equitable spread of resources based on population size, but does not consider varying degrees of need (eg. degree of underdevelopment, hard to access etc.). The picture painted by the Northern Cape per capita budget indicated that although receiving the small total amount in nominal terms, their per capita allocation is the highest due to very low population size, while KwaZulu-‐Natal, due to a large population size, ranks fourth at R2,648 per capita among provinces.
Figure 4 below considers the actual health spending rate of the budgeted amounts for the year 2012/13.
KZN GP EC WC LP MP FS NW NC 2013/14 MTEF -‐ ZAR Billions 29 28 17 16 13 8 8 8 3 2013/14 provincial health per
capita spending ZAR 2,648 2,471 2,527 2,726 2,419 2,001 2,875 2,184 2,917
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Figure 4: The 2012/13 provincial health actual expenditure.
Source: Estimates of Provincial Expenditure 2013/14. Author’s calculations. Figure 4 above indicates increasing health spending efficiency in all provinces, with provinces recording an average spending of 99.3 per cent. On average, provinces spent 10 per cent more money in 2012/13 in absolute terms, as compared to actual spending in 2011/12. This indicates increasing capacity to spend, in line with increased allocations. However in-‐year reports still need to be generated and disseminated to monitor spending on a quarterly basis as final year-‐end spending figures may not show the inconsistencies in spending that happen within the financial year. 3. The Health-‐related HIV/AIDS Budgets and Spending This section considers in more detail the allocations and spending on HIV/AIDS in the national and provincial departments of health. The spending by the departments of education and social development are not included here.
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Figure 5: Consolidated nominal (national and provincial) health HIV and AIDS spending in South Africa by funding mechanism (R’ million), 2010/11 – 2015/16.
Source: National Treasury: Medium Term Budget Policy Statement 2012/13, Estimates of National Expenditure 2013/13, and Estimates of Provincial Expenditure 2013/14. Author’s calculations. Figure 5 above indicates that the Comprehensive Health AIDS Grant remains the main funding channel for HIV and AIDS in the health sector, accounting for 90 per cent of the total health HIV and AIDS allocations. The provincial discretionary contributions to the health and HIV/AIDS interventions account for 6 per cent, and the remaining 4 per cent is allocated and spent by the National Department of Health on national HIV and AIDS interventions such as condom procurement and information, education and communications (IEC) activities. Figure 6 below shows the health-‐related HIV/AIDS budget allocations, in nominal and real figures, for 2013/14 and 2014/15. Figure 7 following shows the absorption rates for the provinces of their 2012/13 budgeted amounts.
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Figure 6: 2013/14 and 2014/15 health HIV/AIDS budget estimates, nominal and real allocations (R’ millions).
Source: National Treasury: Medium Term Budget Policy Statement 2012/13, Estimates of National Expenditure 2013/13, and Estimates of Provincial Expenditure 2013/14. Author’s calculations. Figure 7: Provincial health HIV/AIDS actual expenditure (R’ million) and absorption rates (%), 2012/13.
Source: Estimates of Provincial Expenditure 2013/142. Author’s calculations.
2 This contains both the Comprehensive HIV and AIDS Grant and provincial health Equitable Share allocations for HIV and AIDS.
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Similar to provincial health spending, provinces are spending far more HIV and AIDS money from year to year, with some provinces recording overspending. For instance, Eastern Cape and Free State Provinces spent 105 per cent of their health HIV and AIDS funding in 2012/13, and Mpumalanga and North West spend 102 per cent and 103 per cent respectively in the same year. Northern Cape, with the largest HIV/AIDS and general health per capita spending of R293 and R2,917 respectively recorded the lowest absorption of HIV and AIDS funds of 92 per cent of the 2012/13 budget. Figure 8 below compares 2012/13 health HIV/AIDS conditional grant estimates by Business Plan proposals, Actual Transfers and Actual Expenditure. This shows that although ART spending takes the bulk of conditional grant expenditure on HIV and AIDS, provinces spent more than what was allocated for ART, comparing R5.8 billion requested in the business plans, with R5.9 billion actually transferred to provinces for spending, and R6.2 billion actually spent by provinces, recording a R1.3 billion overspending against actual receipts from the National Treasury.
Figure 8: Provincial health HIV/AIDS conditional grant expenditure by intervention, comparison between Business Plan Allocations, Actual Transfers and Actual Expenditure, 2012/13 (ZAR, ‘ Million).
Source: Provincial HIV CG Expenditure Report (as of 31 March 2013), NDOH. Author’s calculations.
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Table 1: Health HIV and AIDS conditional grant spending performs better than other conditional grants in the health sector (2012/13). R’000 nominal.
2012/13 Total Budget Available
R'000
2012/13 Preliminary Outcome of
Spending R'000
Spending against actual budget (Difference)
Africa Cup of Nations 2013: Medical Services Grant 15,000 8,606 57% Comprehensive HIV and Aids Grant 8,884,764 8,807,986 99% Health Infrastructure Grant (Schedule 4) 1,911,478 0% Health Professions Training and Development Grant (Schedule 4) 2,085,415 0% Hospital Revitalisation Grant 4,527,067 3,660,301 81% National Health Insurance Grant 150,000 78,019 52% National Tertiary Services Grant (Schedule 4) 8,909,129 0% Nursing Colleges and Schools Grant 100,000 72,378 72%
Source: National Treasury. Provincial Budgets: 2012/13 Financial Year Fourth Quarter Year to Date Provincial Budgets and Expenditure Report. Preliminary Outcome May 2013. The shaded areas indicate Schedule 4 grants which do not have specific spending records as these grants are allocated to supplement the funding of programmes or functions funded from provincial budgets, and the National Treasury has not recorded spending against them. The Comprehensive HIV and AIDS Grant of the Department of Health recorded 99 per cent spending in 2012/13, taking the lead in the spending of conditional grants in the health sector. The Hospital Revitalisation Grant recorded 81 per cent spending, marking the second largest spending of the grants. Some grants referred to as Schedule 4 Grants do not appear in the spending records because the National Treasury hasn’t recorded their spending in the official documents, and they have been simply described as supplementary additions to the provincial Equitable Share allocations. There is a concern with the National Health Insurance Grant for pilot districts which recorded 52 per spending by the end of 2012/13 financial year (Mach 2013) from an allocation of R150 million, marking the lowest spending of the health conditional grants in 2012/13. This was subsequently followed by a decrease in the NHI grant allocation for 2013/14 resulting in a grant allocation of R48,5 milion, compared to R150 million allocated for 2012/13. .
4. Provincial programmatic allocations of the National Comprehensive HIV and AIDS Grant KwaZulu-‐Natal and Gauteng Provinces continue to receive the largest amounts of the health Comprehensive HIV and AIDS Grant to implement nationally set priorities as presented in the NSP. The bulk of the conditional grant (65 per cent) is spent by provinces on AIDS treatment, with the remaining ten (10) other programmes receiving percentage shares in the conditional grant ranging between 0.2 per cent and 7 per cent. Figures 9, 10 and 11 below portray this trend
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in the spending of the Comprehensive Grant (CG). Refer to Appendix 1 for the detailed figures of the Provincial CG allocations. Figure 9: Provincial split of the Comprehensive HIV and AIDS Grant, nominal R’000, 2013/14
Source: Provincial HIV CG Business Plans (2013/14), NDOH. Author’s calculations. Figure 10: Proportional allocations to the health AIDS interventions, 2013/14, by Programme.
Source: Provincial HIV CG Business Plans (2013/14), NDOH. Author’s calculations.
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Figure 11: Proportional allocations to the health AIDS interventions, 2013/14, by Province.
Source: Provincial HIV CG Business Plans (2013/14), NDOH. Author’s calculations. Clearly, across all the provinces, ART is taking the largest share, the lowest being in Limpopo (50 per cent) and the highest in Gauteng (80 per cent). In total, 65 per cent of the entire CG is spent on ART.
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Figure 12: Programmatic split of the total Comprehensive HIV and AIDS Grant (%, 2013/14)
Source: Provincial HIV CG Business Plans (2013/14), NDOH. Author’s calculations.
5. Conclusion
The 2013/14 national and provincial budget statements indicated that there is still strong public commitment to fund HIV and AIDS within the health sector (as well as the other sectors not discussed here), demonstrated by increasing health HIV and AIDS allocations within a shrinking health budget in real terms. It is commendable to also see improved capacity of the health departments at national and provincial levels to spend. However more resources need to be sourced to boost the general health budget towards meeting the Abuja Declaration of 15 per cent of national budgets to be allocated to health. Investments in the HIV and AIDS sector from development partners and the public sector itself continue to strengthen the health sector generally, and requires constant monitoring to ensure effective and efficient prevention of new HIV infections and mitigation of the impact of HIV and AIDS amongst those already affected and infected by the disease.
For further details please contact: Nhlanhla Ndlovu, Acting Director Centre for Economic Governance and AIDS in Africa (CEGAA) Email: [email protected] Web: www.cegaa.org Mobile: +27 73 198 7219
ART 65%
HBC 7%
HTA 4%
PEP 0%
PMTCT 2%
PM 4%
RTC 2%
SDC 1% HCT
8%
MMC 3%
TB/HIV 4%
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!! EC! FS! GP! KZN! LP! MP! NC! NW! WC! 2013/14!Total!
ART! 840,963( 518,052( 1,791,731( 1,665,075( 410,808( 426,475( 187,442( 486,554( 531,258( 6,858,358!HBC! 88,406( 57,061( 12,282( 201,942( 168,176( 25,221( 16,630( 129,012( 44,500( 743,230!HTA! 41,685( 27,899( 74,009( 57,990( 67,399( 35,867( 13,946( 27,392( 76,438( 422,625!PEP! 1,725( 1,467( 3,828( 2,415( 1,623( 1,166( 4,079( 4,420( 880( 21,603!PMTCT! 18,581( 14,953( 514( 123,631( 9,618( 10,068( 3,510( 6,550( 44,642( 232,067!PM!! 44,995( 16,968( 48,590( 49,072( 101,782( 32,568( 18,931( 49,345( 39,616( 401,867!RTC! 46,759( 14,366( 12,015( 13,911( 18,192( 33,026( 14,071( 23,063( 11,886( 187,289!SDC! 5,987( 10,268( 52,564( 13,808( 1,603( 6,014( 2,572( 6,312( 42,736( 141,864!HCT! 68,560( 37,665( 115,611( 350,522( 63,817( 60,236( 17,568( 54,713( 50,346( 819,038!MMC! 17,926( 23,461( 86,156( 99,312( 7,846( 35,260( 15,371( 30,476( 32,198( 348,006!TB/HIV! 97,709( 20,824( 61,183( 74,394( 10,279( 24,690( 8,348( 7,465( 53,047( 357,939!Total!Provincial!Health!HIV/AIDS!CG!Allocations!!
1,273,296! 742,984! 2,258,483! 2,652,072! 861,143! 690,591! 302,468! 825,302! 927,547! 10,533,886!
Appendix 1: Summary: Comprehensive Health HIV and AIDS Conditional Grant Allocation per Sub-‐Programme -‐ 2013/14, R’000 Source: Provincial HIV CG Business Plans (2013/14), NDOH.
