June 6, 2011

Aid cuts hit health care

After several years of fragile gains, Malawi’s healthcare sector is running into trouble, with the latest challenge an aid freeze by its largest international donor, the UK's Department for International Development (DFID). The UK provided about US$122 million annually to Malawi, of which $49 million went to funding Malawi’s public health sector, but DFID made its final aid disbursement in March and has decided not to renew a six-year funding commitment which ends in June. “We have already started feeling the pinch,” said Martha Kwataine, a policy analyst with the Malawi Health Equity Network. “There is going to be a regression in the progress we have made with DFID in improving health services in the country.”

The UK’s decision not to renew its aid to Malawi followed the expulsion of its top envoy Fergus Cochrane-Dyet by the Malawian government for allegedly writing in a leaked memo that Malawian President Bingu wa Mutharika was “ever more autocratic and intolerant of criticism”.

Malawi's health sector is nearly entirely donor-funded with foreign aid covering about 90 percent of the costs of all medicines. “[The cuts] will really make a difference because we don’t have the means to buy most drugs ourselves,” Kwataine said. However, drug shortages and stock-outs were a problem even before DFID's funding freeze. Anti-retrovirals (ARVs), for example, are provided entirely by the Global Fund to Fight AIDS, Tuberculosis and Malaria but their distribution to HIV patients across the country is the responsibility of the Ministry of Health's HIV Unit. Often, the drugs are not available where they are needed.

It seems unlikely that the UK and Malawi will be re-establishing ties any time soon. In an emailed response to questions from IRIN, DFID communications officer Andrew Massa said the UK was "reviewing its relations with Malawi, including DFID's aid programme" and that no new aid would be committed until this review was completed. "We and other donors have urged the [Malawian] government to finalize a new 5-year national health strategy to accelerate progress. Without this, donors cannot begin the process of considering what support they will provide," he added. A London spokesperson with DFID wrote: "We have raised concerns with the Government of Malawi on a number of occasions and it is right that we should review our aid programme. We have to ensure that British taxpayers’ money delivers a better life for the poor of Malawi.''

While the UK's aid freeze may have been meant as a political retaliation, Kwataine said it was not the country’s leadership who would pay the price if the freeze continues. "Whatever decision they make, they need to know that it’s the ordinary man and woman who will suffer,” she said.

President Mutharika responded to the withdrawal of UK support by announcing in his State of the Nation address on 23 May a “zero-deficit” budget that will necessarily entail increased taxation. Meanwhile, Finance Minister Ken Kandodo told Reuters he plans to introduce a host of austerity measures to deal with the gap in the country's budget.

Kwataine worried that such measures could include shifting the burden of healthcare costs to Malawians, a move that would only aggravate poverty levels in a country where 74 percent of the population are already living on less than US$1.25 a day. “The poorer you are, the more likely you are to have poor health indicators,” she pointed out.

*The original version of this story incorrectly implied that the problems besetting Malawi's healthcare sector were a direct cause of DFID's aid freeze. (IRIN)

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