IMF accused of impeding health sector progress

Civil society groups are blaming conditions set by the International Monetary Fund for saddling patients with high medical bills and increasing the prevalence of infectious diseases such as Aids and tuberculosis.

The organisations say expenditure ceilings on public health spending imposed in the ‘90s as part of the conditions for disbursing financial support to Kenya have held back progress in the health sector by restricting the recruitment of medical professionals.

Kenya’s public health officials have previously said that the country urgently needs 10,000 nurses but an eight per cent ceiling on wage spend has made it difficult to hire them.

“As a result of inadequate funding, coupled with the wage bill ceiling and employment freeze, Kenya is experiencing a health workforce crisis,” said Allan Ragi, the executive director of the Kenya Aids NGOs Consortium (Kanco).

He spoke during the launch of a report that profiles how IMF policies in Kenya have impacted treatment HIV/Aids and tuberculosis.

The study, conducted by the Center for Economic Governance and Aids in Africa in collaboration with Kanco and Results Educational Fund reveals that the fund’s policies restrict government spending, denying sick Kenyans access to drugs and quality healthcare.

The ceiling has also left Kenya’s fight against HIV/Aids virtually dependent on donor funding.

Institutions such as Kenyatta National Hospital have been acutely affected by the ceiling as the inability to engage additional personnel has also meant they cannot invest in new equipment because there will be no one to operate it.

Of the Sh500 million allocated to the hospital this financial year, Sh100 million will go into the repair of lifts, with the remainder being applied to salaries and the construction of a national burn centre.

Affordable care

Although the hospital currently needs renal units to provide affordable care to the growing number of kidney patients in Kenya, each renal unit would cost about Sh250 million, and would require the hospital to hire additional staff.

The report by the non-profit groups calls on the IMF to phase out activities outside its areas of core competence which carry with them these conditions.

“The IMF does not have a mandate for, or competence in, the long-term development of low-income countries,” said the groups.

The report recommends that IMF’s Policy Support Instrument be phased out in order to end the IMF’s monopoly on ‘signalling’ to donors whether or not developing countries warrant support.

Some of the conditions set by the IMF are that inflation should be at about 5 per cent, fiscal deficits should be at about 3 per cent and foreign currency reserves should be least two and a half months of export earnings.

The groups said that the low-inflation targets set by the IMF lead to limits on overall national spending within the economies of poor countries which in turn reduces the pace of growth in these economies. It also exacerbates unemployment.

For instance, Kenya has more than 10,000 trained but unemployed nurses who cannot get public sector jobs because of the IMF policies.

In an earlier response to non-profit groups, IMF said the wage bill condition was being phased out and would henceforth be used only in countries with unstable macroeconomic conditions such as those emerging out of conflict.

According to the the non-profit groups, however, the IMF still maintains these conditions only not as directly as they used to.

The fund has also insisted that high wage bills have been a significant source of macroeconomic imbalances and that wage and employment conditions in other sectors would need to be reformed to allow for sustainable expansion in health and education.

Kenya’s health budget has grown from Sh15.2 billion in 2002 to Sh37 billion 2010.