As the funding taps run dry, a crisis looms

For 10 years, Kenya relied almost entirely on the US to run its blood services.

In the 15 years they were in Kenya, the US gave the country $72.5 million (Sh7.8 billion) to cover blood services including its collection, testing for HIV, hepatitis B, hepatitis C and syphilis.

From 2004 to 2018, the funding was through its global HIV/Aids prevention programme - President’s Emergency Plan for Aids Relief (Pepfar) - to build Kenya’s blood safety and transfusion infrastructure.

So critical is the commodity that every 10 minutes, about seven Kenyans need blood and are at risk of dying if it is not available. This data from the Kenya National Blood Transfusion Service means that 1,008 people need blood daily.

But, a decision to reduce donor funding left the blood transfusion service in a crisis. The funding decreased from almost Sh647.5 million per year to Sh151 million last year.

In 2019, the US ended its support with a certainty that Kenya was in a position to take over the blood sector after the funding was withdrawn.

Even after the donors engaged the government for several years on plans to transition the blood services to them, not much changed.

As the funding levels gradually declined, the domestic expenditure did not increase to the levels required to replace this support. The result was near collapse of this service in 2020.

Worse still, the government did not allocate funding to the critical commodity in last year’s budget.

It was estimated that the government needed an additional Sh43.2 million in commodities, personnel and other blood safety-related costs per year.

Crowdsource for blood

This left the sector grounded as patients scrambled for blood. Many relied on social media platforms to crowdsource for blood. Without adequate blood supply, accident victims have been losing their lives.

Just three teaspoonfuls of blood are enough to save a premature baby. Yet, the shortage in the blood banks has made it hard to help these patients.

Blood collection has since dropped from the 172,041 units in 2018 to 164,468 units in 2019, showing the harm caused by overreliance on donors.

The reliance on donors extends to other critical health services in which donor withdrawal might also leave patients exposed.

Kenya’s health system has a concentrated donor landscape, with four donors funding nearly 90 per cent of all external aid (the US, Global Fund to Fight Aids, Tuberculosis and Malaria, the UK, and Gavi, the Vaccine Alliance).

HIV funding is already facing cuts.

Is the government ready to handle HIV financing should the donors leave? What will happen to the 1.5 million Kenyans who need drugs daily to survive?

Dr Daniel Mwai, a health financing specialist from University of Nairobi, Sustainable Domestic Financing for HIV, said the shrinking donor basket for HIV programmes presents a huge gap considering they are resource intensive.

“With the reduction in funding, the government needs to start pondering how it can bridge the financial gap to ensure sustainability of health programmes and how to increase domestic funding for HIV in a sustainable way,” Dr Mwai told HealthyNation.

Globally, according to the latest report by the Kaiser Family Foundation, HIV funding declined in 2019 and the donor government disbursements were at Sh841.7 billion. This represented a Sh21.6 billion decrease in donor funding for HIV, comparable to 2008 levels.

The decline was mainly affected by the reduction in the US disbursements, and other countries including France, the Netherlands, Sweden, Canada, Denmark and the European Commission.

“With the reduction, we were hoping that countries could increase their HIV financing. However, most of them have been affected by Covid-19. We are hoping that they will improve,” said Ms Jen Kates, senior vice president and director of global health and HIV policy.

“The funding gap is likely to widen, but we are uncertain how it can be closed because there is still Global Fund money to fight Aids, TB and Malaria, and even Pepfar money. The question is whether it is sufficient.”

Even before the donors exit Kenya’s space completely, the country is currently experiencing a shortage of ARVs after an eight-month stalemate with the US government on who should distribute the drugs in the country. The drugs, worth Sh1.2 billion, are still lying at the Mombasa Port as the two continue with the talks, leaving those in dire need of the drugs stranded.

Sign a contract

Some of the commodities being held are for HIV testing, treatment and prevention. They include ARVs, laboratory reagents and TB diagnostic and prevention medication.

The stalemate could be an indicator that the fate of donations in future is unclear. The donor has insisted on bringing a third party while the ministry has warned that they will not sign a contract with any company.

Stakeholders fear that every time a consignment is brought to the country, there will be a stalemate between the two on who clears the taxes. This will have an impact on the 1.5 million Kenyans who depend on the drugs.

With this back and forth, the government is planning to roll out local manufacturing of antiretroviral drugs in a move to curb shortage.

Health Cabinet Secretary Mutahi Kagwe has warned that Kenya cannot continue depending on foreign nations for ARV support.

He has challenged the legislature to allocate more funding to HIV programmes, so that the country can avoid donor dependency.

“We must start to depend on ourselves as we cannot rely perpetually on external support to take care of our health sector. We must decide, move forward and produce ARVs locally like other nations,” he said.

“If we break through, then it is going to save us the many hitches, the supply is going to be steady and this will ease the burden on people living with HIV/Aids. Local production will fully change the fight against the virus.”

Dr Mwai told HealthyNation that development partners are the major contributors to HIV spending. They contribute the largest share of resources for HIV/Aids, approximately 67 per cent, followed by the government at 24 per cent.

This means that Sh7 out of every Sh10 set aside for HIV is provided by donors.

Despite a 60 per cent increase in health allocation from the national government in the 2021/22 financial year, the amount remains a drop in the ocean. HIV alone needed at least Sh17.1 billion to fund the strategic key commodities and this was only allocated Sh4 billion.

On ARV allocation from the government, the funding has increased from Sh539.6 million in 2005/6 to Sh4.2 billion in 2020/21 almost knocking the budget line items for ARVs which is Sh4.3 billion.

In 2014/15 to 2015/16 financial years, Kenya did not allocate any funding for ARVs and this is the time that most activities were affected. However, the funding picked up in 2015/16 Sh2.2 billion.

However, this is still not enough to manage the HIV programmes and drugs in the country. Already, donors have started withdrawing funding, with a total financing gap of Sh57.5 billion for key programmes in 2021.

According to Regina Ombam, deputy director HIV Financing, the Treasury should increase the Ministry of Health’s budget by 65 per cent to bolster the HIV response.

Stop donor dependence

In a presentation, Ms Ombam said to address the financing challenge and stop donor dependence, Kenya needs Sh77 billion to sustain the HIV, Tuberculosis and Malaria efforts and achieve strategic objectives. There is also a Sh7 billion funding shortfall.

“This means the country needs Sh84 billion a year to stop donor dependence and to run our HIV issues. This should be considered an upper bound for how much new revenue Kenya would require, in the absence of donor funding to meet the national strategic objectives for HIV, TB, and malaria,” she said.

Kenya needs Sh84 billion every year for HIV treatment. However, it only allocated Sh600 million for the recurrent HIV budget in 2017/18 with Sh75 million allocated for development HIV.

She added: “In all likelihood, not all donor funding needs to be replaced shilling-for-shilling (for example, a share of programme management costs). As the system becomes more integrated, some costs will increasingly be shared across health areas, particularly in service delivery,” said Ms Ombam.

Kenya’s health system has for years been financed by the US government particularly its HIV response, however, there has been a shift in the US policy making it unpredictable.

Again, with the country’s transition from being a low-income country to a low middle-income country in 2014, Kenya is now perceived as increasingly capable of financing its own development. It should transition out of key multilateral aid support in the coming years.

Some donors have begun to transition their support out of such middle-income countries to redirect their funds to those with greater needs with Pepfar being the first to reduce its allocation to Kenya.

Out of all financing sources, Pepfar is the primary funder of Kenya’s HIV response and Kenya is one of the countries that has benefited the most from the resources.

Pepfar funds most HIV activities in Kenya including adult treatment and ARV drugs, infrastructure, training for clinicians and other providers, clinical monitoring, related laboratory services and community-adherence activities, procurement, delivery and in-freight of ARV drugs.  They have been cutting funding to Kenya since 2017.

In 2017-18, Kenya received Sh61.5 billion, which was reduced to Sh54 billion last year, to the expected Sh40 billion this year.

The US Global Aids coordinator also approved Pepfar’s 2019 Country Operational Plan for Kenya, which contains the budget cut, estimated at Sh13 billion.

Out-of-pocket costs

However, the US government says the move was not malicious but driven by programmes and data given that Kenya was not exhausting all the allocation given by the donor.

A study done by the Centre for Policy Impact on Global Health on donor dependency in Kenya’s health sector showed that the country’s HIV programme is particularly donor dependent and concentrated.

“Donors have made up most of the development budget for several years, most recently 58 per cent in 2018-2019.

The Ministry of Health should increase the development budget allocation from Government of Kenya resources to reduce over-reliance on donors and reduce the gaps arising from decreasing donor funding,” states the study published in February.

Mr Kenneth Munge, Health Economist -World Bank Kenya Country Office and the author of the study, said although the share of the total budget from donors has declined from 33 per cent in 2016-2017 to 26 per cent in 2018-2019, the absolute amount of support has increased by over 20 per cent from Sh19.7 billion 2016-2017 to Sh23.7 billion in 2018-2019.

“Kenya’s HIV response is characterised by high, albeit declining, donor dependency. This means that as of 2017, for every dollar spent by the domestic government, donors contributed more than double that amount,” says the study.

An analysis conducted by the Center for Global Development found that Kenya potentially faces a reduction of 44 per cent in actual disbursed funds from Pepfar from 2017 to 2020. Kenya and Tanzania are the only two bilateral programmes of the 13 in acceleration countries, defined as a high-burden that are facing large proposed cuts.

“This is important because Pepfar does not have a clear transition policy or approach and, therefore, budget levels are one of the only ways to estimate the priority level of a country’s future programming,” says Mr Munge.

To increase domestic funding for HIV, Ms Ombam said there was need for the government to focus on increasing efficiency in the delivery of health care services by streamlining delivery as well as giving more services for the money available.

“The country also needs to explore the innovative ways of raising domestic resources for health through initiating negotiation for result-based financial mechanism,” she said.

There is also need for greater sustainability in the response to HIV, she said. “Countries need more stable and predictable sources of funding for HIV prevention, treatment and care. Investing now is essential to maximise the return on investments,” said Mr Munge.

According to UNAids, declines in HIV incidence have been substantially greater in countries where HIV services have been rapidly scaled up.

Dr Mwai also said the government should ensure financial risk protection by safeguarding the households from catastrophic healthcare expenditures and the impoverishing effects of out-of-pocket costs.

Also by strengthening the ability of the county departments of health to make a case for health investment at the county level, including advocating funding for HIV.

On financing system efficiency, Dr Mwai called upon the government to promote local manufacturing by planning well for the health programmes since they are resource intensive.

“When done right, local manufacturing has the potential to reduce the resource needs of importing HIV commodities and also adding a sustainability aspect towards the eradication of the epidemic,” said Dr Mwai.

Dr Munge advised that countries need to proactively prepare for transition, even where transition is not an immediate reality and increase domestic resources for health.

“Address health system inefficiencies, improve tracking and reporting on external reliance on health aid while key donors should identify clear pathways for sustaining effective coverage,” said the expert.