SlideShare une entreprise Scribd logo
1  sur  4
Télécharger pour lire hors ligne
Health Expenditure Implications
                         of SACU’s Revenue Volatility in
                                 BLNS Countries


                                                                                             ISSUE BRIEF JULY 2010


Executive Summary                                                  Namibia's and Botswana's shares will drop from
                                                                   8.1 percent and 5.1 percent of GDP in 2005 to 4.4
                                                                   percent and 2.8 percent of GDP, respectively in
T   he Southern African Customs Union (SACU)
    is the world’s oldest customs union.
Established as Customs Union Convention in
                                                                   2020 (Figure 1).


1889, the union operated under different                                   Figure 1: SACU Revenues as a share of
agreements, which were negotiated and                                                GDP (%)
renegotiated with changing circumstances [1,2].                       30
                                                                                                                Botswana
Presently, the union is being governed by the                         25
                                                                                                                Lesotho
2002 Agreement. Its members are Botswana,                             20
                                                                                                                Namibia
Lesotho, Namibia, Swaziland (BLNS countries)                          15
                                                                                                                Swaziland
and the Republic of South Africa.                                     10
                                                                       5
SACU member states deposit their customs and                           0
excise collections in a common revenue pool                                  1994    2002     2005     2020
(CRP), which they share using a formula that has                           Source: Flatters and Stern (2005)
evolved over the years. Under the 2002 revenue
sharing formula (RSF), the BLNS countries
                                                                   Against the declining SACU revenues and the
together get nearly half of the collections although
                                                                   heavy government reliance on income from the
their joint gross domestic product (GDP) is less
                                                                   CRP, fiscal expenditures and hence public
than 10 percent of SACU's GDP. Not surprisingly,
                                                                   programs in the BLNS countries will be adversely
income from the CRP constitutes a considerable
                                                                   affected. A likely effect is that critical areas such
proportion of total government revenue (about
                                                                   as health, education and agriculture, which are
half in Lesotho, more than two thirds in Swaziland
                                                                   paramount for human development, may be
and nearly 40 percent in Namibia).
                                                                   scaled down. This is an issue of major concern
                                                                   given that SACU countries carry the world’s worst
SACU revenue is on the decline. Flatters and
                                                                   HIV/AIDS epidemic. Any scaling down of
Stern [3] predict that Swaziland's SACU revenue
                                                                   prevention, care and treatment programs will
as a share of its GDP will decline from 17.6
                                                                   decelerate current initiatives and, in some cases,
percent in 2005 to 9.4 percent in 2020; Lesotho's
                                                                   reverse advances made in combating the
share will go down to 12.6 percent of GDP in
                                                                   scourge.
2020 from 21.5 percent of GDP in 2005; while




                      Health Economics and HIV/AIDS Research Division

         University of KwaZulu-Natal, Westville Campus, J block, Level 4, University Rd, Durban, South Africa
            Tel: +27 (0)31 260 2592 | Fax: +27 (0)31 260 2587 | heard@ukzn.ac.za | www.heard.org.za
To counter the problem, we suggest that, in the             financial support for treatment in Lesotho,
short term, the BLNS countries should lobby for             Namibia and Swaziland. The availability of
more donor support, exercise fiscal restraint and           funding to treat people in need of antiretroviral
allow for relatively higher budget deficits. In the         treatment (ART) in the near future however, is not
long run, the solution lies in restructuring their          secure. PEPFAR's 2009-2014 plan shows a
fiscal frameworks to move away from reliance on             slowdown in the rate of enrolling new patients [5]
SACU revenue,           especially for recurrent            and the Global Fund continues to face funding
expenditures. This will necessitate the adoption of         gaps [6]. With major donors increasingly reluctant
an expenditure plan anchored on domestic                    to lock themselves into long-term funding for
revenue. The BLNS countries may also aim at                 AIDS, the financial responsibility falls onto these
efficient and effective use of public resources             countries at a time when revenue injections from
                                                            SACU are declining.
The State of HIV/AIDS in BLNS Countries
                                                                         Figure 2 SACU revenue and Govt
The state of HIV/AIDS in Southern Africa is                               contributions to HIV/AIDS prms
                                                               100                                    Share of SACU
alarming. Continued new infections, especially                   80                                   revenue to total
amongst infants, national sero-prevalence rates                  60                                   govt revenue
among pregnant women and aggregate numbers                                                            (%)
                                                                 40
of people living with HIV/AIDS are all very high in              20                                   Share of govt
SACU member states. In Swaziland the United                       0                                   contributions to
Nations Development Program warned that `if the                                                       domestic
                                                                                                      HIV/AIDS
current trends are not reversed, the longer term                                                      prgms (%)
survival of Swaziland as a country will be
seriously threatened' [4]. Existing levels of poverty                 Sources: UNAIDS (2008) [7]; Flatters and Stern
                                                                                        (2005)
and poor access to health services compound the
impacts HIV/AIDS is having. The cost of care and
treatment for people living with HIV and AIDS as
well as support for those affected (such as the
                                                            Declining SACU Revenues
millions of AIDS orphans), applies pressure to
already tight budgets.
                                                            Receipts from the SACU CRP constitute a
Lesotho, Namibia and Swaziland presently                    significant proportion of total government revenue
shoulder a significant share of the financial               in the BLNS countries. Governments of Lesotho
                                                            and Swaziland stand out as the most dependent
responsibility  for   HIV/AIDS     given   their
development indicators (see figure 2). If more              on SACU revenue among the SACU member
people are to be enrolled onto ART programs,                states, while Namibia's dependence, albeit slightly
funding may increasingly have to be from these              lower, has been gradually increasing in recent
overstretched    governments     since    donor             years.
commitment is uncertain. The US President's
                                                            Available statistics, show that SACU income has
Emergency Plan for AIDS Relief (PEPFAR) and
                                                            been on the decline and is likely to continue going
the Global Fund for AIDS, Tuberculosis and
                                                            down. A number of factors explain the declining
Malaria (the Global Fund) provide the greatest




                      Health Economics and HIV/AIDS Research Division

                              Harold Ngalawa, Khaled Ahmed and Alan Whiteside
SACU revenue. These include the recent global              (ii) Fiscal restraint aimed at realigning declining
recession, the impact of the recession on the              government revenue with public expenditures:
South African economy and declining global trade           This is both a short and long term solution. The
tariffs. The European Union (EU) Sovereign Debt            BLNS countries can address the financing gap
Crisis and a slowdown of imports associated with           between government revenue and required
the 2010 FIFA World cup infrastructure are                 expenditures on HIV/AIDS by exercising fiscal
additional factors that are expected to keep the           restraint. This means cutting down on non-priority
CRP declining.                                             expenditures and, in some instances, even
                                                           HIV/AIDS projects may have to be downsized.
                                                           This approach will ascertain that countries do not
                                                           unnecessarily accumulate public debt.
Policy Options
                                                           (iii) Increasing the fiscal deficit to avoid disrupting
BLNS countries are largely left on their own to            public projects amid declining government
face the impending financial battle of falling SACU        revenue: The BLNS countries can choose to
revenues. The strategic geopolitical links between         maintain the present level of fiscal expenditures
southern African countries, that allowed high              and let the running projects continue undisrupted.
SACU revenue recepits, are largely obsolete.               The declining government revenue, however, will
Regional intervention, therefore, cannot be                imply a corresponding increase in the budget
realistically expected.                                    deficit. This may be an inevitable short to medium
                                                           term solution pending restructuring of the fiscal
We present six policy proposals, not mutually              framework.
exclusive, to counter the problem, both in the
short run and in the long run.                             (iv) Restructuring the fiscal framework to move
                                                           away from relying on SACU revenue, especially
(i) Lobbying for increased aid to offset the               for recurrent expenditures: This is a long term
declining SACU revenue: This is a short term               solution. Taking this approach, the BLNS
solution. Everything else remaining the same, the          governments may have to reconsider how they
BLNS countries are likely to face a widening gap           utilise SACU revenue. A way forward is to move
between government revenue and required public             away from using SACU revenue for recurrent
expenditures on HIV/AIDS, which can be filled by           expenditures, in particular wages and salaries.
a corresponding increase in donor funding. Donor           Instead, the revenue should be channelled to
funding for HIV/AIDS programs in BLNS countries            finance investment projects such as infrastructure
vary from country to country. Lesotho and                  development.
Botswana, respectively, are the most and least
dependent on donors for their HIV/AIDS projects            (v) Developing a long-term expenditure plan
among the BLNS countries. The funding gap will             anchored on domestic revenue: It is imperative for
depend both on the dependency ratio of public to           the BLNS countries to develop fiscal strategies
donor funding and on the extent to which the               aimed at moving away from reliance on external
BLNS countries have relied on SACU revenue to              sources of revenue. This entails enhancing efforts
finance government budgets.                                to improve domestic revenue collection. Larger
                                                           amounts of domestic revenue will provide a




                     Health Economics and HIV/AIDS Research Division

                             Harold Ngalawa, Khaled Ahmed and Alan Whiteside
cushion against any shock to the budget arising             [2]    Gibb, R. (2006). ‘The New Southern
from the volatility of SACU revenues. This is a             African Customs Union Agreement: Dependence
long term plan intended to re-align public                  with Democracy,’ Journal of Southern African
expenditures with domestic revenues.                        Studies 32(3):583-603.

(vi) Efficient and effective use of public resources:       [3]    Flatters, F. and Stern, M. (2005).
This is a long term solution that involves                  ‘Implementing the SACU Revenue-Sharing
streamlining the public sector. This is to ensure           Formula: Customs Revenues,’ Policy Brief
that government is involved only in services that           Prepared for the South African National Treasury.
cannot be efficiently provided by the private
sector, that government adheres to public                   [4]    UNDP and Government of Swaziland,
expenditure ceilings, and there is priority targeting       (2006). ‘Country Program Action Plan (2002-
of public expenditures towards more urgent                  2010),’ Action Plan for the Government of
productive projects.                                        Swaziland.

                                                            [5]    PEPFAR (2009). ‘The US President’s
                                                            Emergency Plan for HIV/AIDS: Five Year
Policy Recommendations                                      Strategy.’   URL:       http://www.pepfar.gov/
                                                            documents/organization/133035.pdf
In the short run, the BLNS countries should lobby
for an increase in donor support to cover the               [6]   MSF (2010). ‘No Time to Quit: HIV/AIDS
funding gap in critical areas such as HIV/AIDS.             Treatment Gap Widening in Africa,’ Brussels:
Donor funding may have to be complemented                   Médecins Sans Frontières.
with fiscal restraint, cutting down expenditures in
non-priority areas. Realising that the expenditure          [7] UNAIDS (2008). ‘Domestic and International
cuts need not be done in a manner that constricts           AIDS Spending Data – Global Report 2008’. xls
the economy, relatively larger fiscal deficits may          file.       URL:         http://www.unaids.org/

be inevitable. In the long run, the BLNS countries          en/KnowledgeCentre/HIVData/Tracking/default.asp

should consider adopting an expenditure plan
anchored on domestic revenue. The fiscal                     Contacts
framework may have to be restructured, moving
                                                                  Harold Ngalawa, School of Economics and
away from reliance on SACU revenue, especially
                                                                   Finance, University of KwaZulu-Natal,
for recurrent expenditures. There is also need to
                                                                       email: ngalawa@ukzn.ac.za
aim at efficient and effective use of public
resources.                                                     Khaled Ahmed, Health Economics and HIV/AIDS
                                                               Research Division, University of KwaZulu-Natal,
References                                                            email: ahmedk@ukzn.ac.za


[1]    Ettinger, S. (1974). ‘The Economics of the              Alan Whiteside, Health Economics and HIV/AIDS,
                                                               Research Division, University of KwaZulu-Natal,
Customs Union Between Botswana, Lesotho,
                                                                       email: whitesid@ukzn.ac.za
Swaziland and South Africa,’ Unpublished PhD
Thesis, University of Michigan.




                      Health Economics and HIV/AIDS Research Division

                              Harold Ngalawa, Khaled Ahmed and Alan Whiteside

Contenu connexe

En vedette

En vedette (7)

Com-Watch - Issue 66 - November 2016
Com-Watch - Issue 66 - November 2016Com-Watch - Issue 66 - November 2016
Com-Watch - Issue 66 - November 2016
 
Technical report sadc comesa bond market study final
Technical report   sadc comesa bond market study finalTechnical report   sadc comesa bond market study final
Technical report sadc comesa bond market study final
 
7. gatt and uruguay round
7. gatt and uruguay round7. gatt and uruguay round
7. gatt and uruguay round
 
Gatt
GattGatt
Gatt
 
Wto and gatt
Wto and gattWto and gatt
Wto and gatt
 
GATT Agreements
GATT Agreements GATT Agreements
GATT Agreements
 
WTO GATT
WTO GATTWTO GATT
WTO GATT
 

Similaire à Health Expenditure Implications of SACU's Revenue Volatility in BLNs Countries policy brief_final_june_30[1]

Financing for development
Financing for developmentFinancing for development
Financing for developmentTererai Muridzo
 
Executive Summary
Executive SummaryExecutive Summary
Executive Summaryeconsultbw
 
An Investigation Into the Impacts of Covid-19 on the Economic Growrth: A Case...
An Investigation Into the Impacts of Covid-19 on the Economic Growrth: A Case...An Investigation Into the Impacts of Covid-19 on the Economic Growrth: A Case...
An Investigation Into the Impacts of Covid-19 on the Economic Growrth: A Case...BIJFMCF Journal
 
DA is calling for a "resilience budget"
DA is calling for a "resilience budget"DA is calling for a "resilience budget"
DA is calling for a "resilience budget"SABC News
 
Post covid ecnomic condition ways to recover from covid-19 pandemic recession
Post covid ecnomic condition   ways to recover from covid-19 pandemic recessionPost covid ecnomic condition   ways to recover from covid-19 pandemic recession
Post covid ecnomic condition ways to recover from covid-19 pandemic recessionShimanta Easin
 
Tito mboweni supplementary budget speech
Tito mboweni supplementary budget speechTito mboweni supplementary budget speech
Tito mboweni supplementary budget speechSABC News
 
Appendix 2 ssn and cct updated report by kanuh
Appendix 2 ssn and cct updated report by kanuhAppendix 2 ssn and cct updated report by kanuh
Appendix 2 ssn and cct updated report by kanuhOSSAP-MDGS
 
Sudan 2012 youth unemployment briefing
Sudan 2012 youth unemployment briefingSudan 2012 youth unemployment briefing
Sudan 2012 youth unemployment briefingDr Lendy Spires
 
Unlocking Investment Potentials In South Sudan
Unlocking Investment  Potentials In South SudanUnlocking Investment  Potentials In South Sudan
Unlocking Investment Potentials In South SudanJoy Eyituoyo Sillo
 

Similaire à Health Expenditure Implications of SACU's Revenue Volatility in BLNs Countries policy brief_final_june_30[1] (20)

Public Health Expendoture Implications of the SACU Revenue Volatility in BLNS...
Public Health Expendoture Implications of the SACU Revenue Volatility in BLNS...Public Health Expendoture Implications of the SACU Revenue Volatility in BLNS...
Public Health Expendoture Implications of the SACU Revenue Volatility in BLNS...
 
Financing for development
Financing for developmentFinancing for development
Financing for development
 
Executive Summary
Executive SummaryExecutive Summary
Executive Summary
 
Impact of COVID-19 on the fiscal space for agricultural transformation in Africa
Impact of COVID-19 on the fiscal space for agricultural transformation in AfricaImpact of COVID-19 on the fiscal space for agricultural transformation in Africa
Impact of COVID-19 on the fiscal space for agricultural transformation in Africa
 
Speech
SpeechSpeech
Speech
 
An Investigation Into the Impacts of Covid-19 on the Economic Growrth: A Case...
An Investigation Into the Impacts of Covid-19 on the Economic Growrth: A Case...An Investigation Into the Impacts of Covid-19 on the Economic Growrth: A Case...
An Investigation Into the Impacts of Covid-19 on the Economic Growrth: A Case...
 
An Investigation Into the Impacts of Covid-19 on the Economic Growrth: A Case...
An Investigation Into the Impacts of Covid-19 on the Economic Growrth: A Case...An Investigation Into the Impacts of Covid-19 on the Economic Growrth: A Case...
An Investigation Into the Impacts of Covid-19 on the Economic Growrth: A Case...
 
DA is calling for a "resilience budget"
DA is calling for a "resilience budget"DA is calling for a "resilience budget"
DA is calling for a "resilience budget"
 
Post covid ecnomic condition ways to recover from covid-19 pandemic recession
Post covid ecnomic condition   ways to recover from covid-19 pandemic recessionPost covid ecnomic condition   ways to recover from covid-19 pandemic recession
Post covid ecnomic condition ways to recover from covid-19 pandemic recession
 
Tito mboweni supplementary budget speech
Tito mboweni supplementary budget speechTito mboweni supplementary budget speech
Tito mboweni supplementary budget speech
 
Impact of the Covid-19 Health Crisis on the Indebtedness of Family SMEs In Chad
Impact of the Covid-19 Health Crisis on the Indebtedness of Family SMEs In ChadImpact of the Covid-19 Health Crisis on the Indebtedness of Family SMEs In Chad
Impact of the Covid-19 Health Crisis on the Indebtedness of Family SMEs In Chad
 
Assingment 2
Assingment 2Assingment 2
Assingment 2
 
Appendix 2 ssn and cct updated report by kanuh
Appendix 2 ssn and cct updated report by kanuhAppendix 2 ssn and cct updated report by kanuh
Appendix 2 ssn and cct updated report by kanuh
 
Sudan 2012 youth unemployment briefing
Sudan 2012 youth unemployment briefingSudan 2012 youth unemployment briefing
Sudan 2012 youth unemployment briefing
 
Unlocking Investment Potentials In South Sudan
Unlocking Investment  Potentials In South SudanUnlocking Investment  Potentials In South Sudan
Unlocking Investment Potentials In South Sudan
 
Nigerian Budget 2010
Nigerian Budget 2010Nigerian Budget 2010
Nigerian Budget 2010
 
54138 001-sd-03
54138 001-sd-0354138 001-sd-03
54138 001-sd-03
 
Ace budget bulletin 2020
Ace  budget  bulletin 2020Ace  budget  bulletin 2020
Ace budget bulletin 2020
 
Daniel Mitchell: Free Market Road Show 2012
Daniel Mitchell: Free Market Road Show 2012Daniel Mitchell: Free Market Road Show 2012
Daniel Mitchell: Free Market Road Show 2012
 
The MDGs after the Crisis
The MDGs after the CrisisThe MDGs after the Crisis
The MDGs after the Crisis
 

Plus de ABBA RPC (Addressing the Balance of Burden in HIV/AIDS)

Plus de ABBA RPC (Addressing the Balance of Burden in HIV/AIDS) (20)

Which teachers talk about sex
Which teachers talk about sex  Which teachers talk about sex
Which teachers talk about sex
 
Protecting young women from hiv aids 2006 3207906
Protecting young women from hiv aids  2006 3207906Protecting young women from hiv aids  2006 3207906
Protecting young women from hiv aids 2006 3207906
 
Investigating the empirical_evidence_for.1
Investigating the empirical_evidence_for.1Investigating the empirical_evidence_for.1
Investigating the empirical_evidence_for.1
 
Enhancing financial literacy hiv aids skills and safe social spaces among vul...
Enhancing financial literacy hiv aids skills and safe social spaces among vul...Enhancing financial literacy hiv aids skills and safe social spaces among vul...
Enhancing financial literacy hiv aids skills and safe social spaces among vul...
 
Business management of hiv aids case study of a south african contract cleani...
Business management of hiv aids case study of a south african contract cleani...Business management of hiv aids case study of a south african contract cleani...
Business management of hiv aids case study of a south african contract cleani...
 
Challenges in linking health research to policy multi stakeholder response ...
Challenges in linking health research to policy   multi stakeholder response ...Challenges in linking health research to policy   multi stakeholder response ...
Challenges in linking health research to policy multi stakeholder response ...
 
The increasing chronicity of hiv in sub saharan africa 2011
The increasing chronicity of hiv in sub saharan africa 2011The increasing chronicity of hiv in sub saharan africa 2011
The increasing chronicity of hiv in sub saharan africa 2011
 
Siyakha Nentsha: Mixed Methods research in South Africa
Siyakha Nentsha: Mixed Methods research in South AfricaSiyakha Nentsha: Mixed Methods research in South Africa
Siyakha Nentsha: Mixed Methods research in South Africa
 
The impact of hiv and aids research a case study from swaziland
The impact of hiv and aids research a case study from swazilandThe impact of hiv and aids research a case study from swaziland
The impact of hiv and aids research a case study from swaziland
 
Psychosocial and-behavioural-correlates-of-attitudes-towards-antiretroviral-t...
Psychosocial and-behavioural-correlates-of-attitudes-towards-antiretroviral-t...Psychosocial and-behavioural-correlates-of-attitudes-towards-antiretroviral-t...
Psychosocial and-behavioural-correlates-of-attitudes-towards-antiretroviral-t...
 
Challenges in linking health research to policy a commentary on developing a...
Challenges in linking health research to policy  a commentary on developing a...Challenges in linking health research to policy  a commentary on developing a...
Challenges in linking health research to policy a commentary on developing a...
 
Playing the role of a boundary organisation getting smarter with networking
Playing the role of a boundary organisation getting smarter with networkingPlaying the role of a boundary organisation getting smarter with networking
Playing the role of a boundary organisation getting smarter with networking
 
The impact of hiv and aids research a case study from swaziland
The impact of hiv and aids research a case study from swazilandThe impact of hiv and aids research a case study from swaziland
The impact of hiv and aids research a case study from swaziland
 
The african women's protocol: Bringing Attention to Reproductive Rights and t...
The african women's protocol: Bringing Attention to Reproductive Rights and t...The african women's protocol: Bringing Attention to Reproductive Rights and t...
The african women's protocol: Bringing Attention to Reproductive Rights and t...
 
Social Health Insurance: Should international agencies promote health insura...
Social Health Insurance:  Should international agencies promote health insura...Social Health Insurance:  Should international agencies promote health insura...
Social Health Insurance: Should international agencies promote health insura...
 
Mental Health Promotion initiatives for Children and Youth in contexts of Pov...
Mental Health Promotion initiatives for Children and Youth in contexts of Pov...Mental Health Promotion initiatives for Children and Youth in contexts of Pov...
Mental Health Promotion initiatives for Children and Youth in contexts of Pov...
 
The effects of gender and socioeconomic status on youth sexual risk norms aja...
The effects of gender and socioeconomic status on youth sexual risk norms aja...The effects of gender and socioeconomic status on youth sexual risk norms aja...
The effects of gender and socioeconomic status on youth sexual risk norms aja...
 
The history of aids exceptionalism 1758 2652-13-47
The history of aids exceptionalism 1758 2652-13-47The history of aids exceptionalism 1758 2652-13-47
The history of aids exceptionalism 1758 2652-13-47
 
Building economic, health and social capabilities adolescents threatened by H...
Building economic, health and social capabilities adolescents threatened by H...Building economic, health and social capabilities adolescents threatened by H...
Building economic, health and social capabilities adolescents threatened by H...
 
Building health, social and economic capabilities among adolescents threatene...
Building health, social and economic capabilities among adolescents threatene...Building health, social and economic capabilities among adolescents threatene...
Building health, social and economic capabilities among adolescents threatene...
 

Dernier

Generative AI in Health Care a scoping review and a persoanl experience.
Generative AI in Health Care a scoping review and a persoanl experience.Generative AI in Health Care a scoping review and a persoanl experience.
Generative AI in Health Care a scoping review and a persoanl experience.Vaikunthan Rajaratnam
 
concept of total quality management (TQM).
concept of total quality management (TQM).concept of total quality management (TQM).
concept of total quality management (TQM).kishan singh tomar
 
SGK RỐI LOẠN TOAN KIỀM ĐHYHN RẤT HAY VÀ ĐẶC SẮC.pdf
SGK RỐI LOẠN TOAN KIỀM ĐHYHN RẤT HAY VÀ ĐẶC SẮC.pdfSGK RỐI LOẠN TOAN KIỀM ĐHYHN RẤT HAY VÀ ĐẶC SẮC.pdf
SGK RỐI LOẠN TOAN KIỀM ĐHYHN RẤT HAY VÀ ĐẶC SẮC.pdfHongBiThi1
 
Male Infertility Panel Discussion by Dr Sujoy Dasgupta
Male Infertility Panel Discussion by Dr Sujoy DasguptaMale Infertility Panel Discussion by Dr Sujoy Dasgupta
Male Infertility Panel Discussion by Dr Sujoy DasguptaSujoy Dasgupta
 
Role of Soap based and synthetic or syndets bar
Role of  Soap based and synthetic or syndets barRole of  Soap based and synthetic or syndets bar
Role of Soap based and synthetic or syndets barmohitRahangdale
 
Adenomyosis or Fibroid- making right diagnosis
Adenomyosis or Fibroid- making right diagnosisAdenomyosis or Fibroid- making right diagnosis
Adenomyosis or Fibroid- making right diagnosisSujoy Dasgupta
 
Trustworthiness of AI based predictions Aachen 2024
Trustworthiness of AI based predictions Aachen 2024Trustworthiness of AI based predictions Aachen 2024
Trustworthiness of AI based predictions Aachen 2024EwoutSteyerberg1
 
Male Infertility, Antioxidants and Beyond
Male Infertility, Antioxidants and BeyondMale Infertility, Antioxidants and Beyond
Male Infertility, Antioxidants and BeyondSujoy Dasgupta
 
Microbiology lecture presentation-1.pptx
Microbiology lecture presentation-1.pptxMicrobiology lecture presentation-1.pptx
Microbiology lecture presentation-1.pptxkitati1
 
Mental health Team. Dr Senthil Thirusangu
Mental health Team. Dr Senthil ThirusanguMental health Team. Dr Senthil Thirusangu
Mental health Team. Dr Senthil Thirusangu Medical University
 
introduction to neurology (nervous system, areas, motor and sensory systems)
introduction to neurology (nervous system, areas, motor and sensory systems)introduction to neurology (nervous system, areas, motor and sensory systems)
introduction to neurology (nervous system, areas, motor and sensory systems)Mohamed Rizk Khodair
 
How to cure cirrhosis and chronic hepatitis naturally
How to cure cirrhosis and chronic hepatitis naturallyHow to cure cirrhosis and chronic hepatitis naturally
How to cure cirrhosis and chronic hepatitis naturallyZurück zum Ursprung
 
Using Data Visualization in Public Health Communications
Using Data Visualization in Public Health CommunicationsUsing Data Visualization in Public Health Communications
Using Data Visualization in Public Health Communicationskatiequigley33
 
power point presentation of Clinical evaluation of strabismus
power point presentation of Clinical evaluation  of strabismuspower point presentation of Clinical evaluation  of strabismus
power point presentation of Clinical evaluation of strabismusChandrasekar Reddy
 
Pharmacokinetic Models by Dr. Ram D. Bawankar.ppt
Pharmacokinetic Models by Dr. Ram D.  Bawankar.pptPharmacokinetic Models by Dr. Ram D.  Bawankar.ppt
Pharmacokinetic Models by Dr. Ram D. Bawankar.pptRamDBawankar1
 
Unit I herbs as raw materials, biodynamic agriculture.ppt
Unit I herbs as raw materials, biodynamic agriculture.pptUnit I herbs as raw materials, biodynamic agriculture.ppt
Unit I herbs as raw materials, biodynamic agriculture.pptPradnya Wadekar
 
Clinical Research Informatics Year-in-Review 2024
Clinical Research Informatics Year-in-Review 2024Clinical Research Informatics Year-in-Review 2024
Clinical Research Informatics Year-in-Review 2024Peter Embi
 
"Radical excision of DIE in subferile women with deep infiltrating endometrio...
"Radical excision of DIE in subferile women with deep infiltrating endometrio..."Radical excision of DIE in subferile women with deep infiltrating endometrio...
"Radical excision of DIE in subferile women with deep infiltrating endometrio...Sujoy Dasgupta
 
Good Laboratory Practice (GLP) in Pharma-LikeWays.pptx
Good Laboratory Practice (GLP) in Pharma-LikeWays.pptxGood Laboratory Practice (GLP) in Pharma-LikeWays.pptx
Good Laboratory Practice (GLP) in Pharma-LikeWays.pptxLikeways
 

Dernier (20)

Generative AI in Health Care a scoping review and a persoanl experience.
Generative AI in Health Care a scoping review and a persoanl experience.Generative AI in Health Care a scoping review and a persoanl experience.
Generative AI in Health Care a scoping review and a persoanl experience.
 
concept of total quality management (TQM).
concept of total quality management (TQM).concept of total quality management (TQM).
concept of total quality management (TQM).
 
SGK RỐI LOẠN TOAN KIỀM ĐHYHN RẤT HAY VÀ ĐẶC SẮC.pdf
SGK RỐI LOẠN TOAN KIỀM ĐHYHN RẤT HAY VÀ ĐẶC SẮC.pdfSGK RỐI LOẠN TOAN KIỀM ĐHYHN RẤT HAY VÀ ĐẶC SẮC.pdf
SGK RỐI LOẠN TOAN KIỀM ĐHYHN RẤT HAY VÀ ĐẶC SẮC.pdf
 
Male Infertility Panel Discussion by Dr Sujoy Dasgupta
Male Infertility Panel Discussion by Dr Sujoy DasguptaMale Infertility Panel Discussion by Dr Sujoy Dasgupta
Male Infertility Panel Discussion by Dr Sujoy Dasgupta
 
Cone beam CT: concepts and applications.pptx
Cone beam CT: concepts and applications.pptxCone beam CT: concepts and applications.pptx
Cone beam CT: concepts and applications.pptx
 
Role of Soap based and synthetic or syndets bar
Role of  Soap based and synthetic or syndets barRole of  Soap based and synthetic or syndets bar
Role of Soap based and synthetic or syndets bar
 
Adenomyosis or Fibroid- making right diagnosis
Adenomyosis or Fibroid- making right diagnosisAdenomyosis or Fibroid- making right diagnosis
Adenomyosis or Fibroid- making right diagnosis
 
Trustworthiness of AI based predictions Aachen 2024
Trustworthiness of AI based predictions Aachen 2024Trustworthiness of AI based predictions Aachen 2024
Trustworthiness of AI based predictions Aachen 2024
 
Male Infertility, Antioxidants and Beyond
Male Infertility, Antioxidants and BeyondMale Infertility, Antioxidants and Beyond
Male Infertility, Antioxidants and Beyond
 
Microbiology lecture presentation-1.pptx
Microbiology lecture presentation-1.pptxMicrobiology lecture presentation-1.pptx
Microbiology lecture presentation-1.pptx
 
Mental health Team. Dr Senthil Thirusangu
Mental health Team. Dr Senthil ThirusanguMental health Team. Dr Senthil Thirusangu
Mental health Team. Dr Senthil Thirusangu
 
introduction to neurology (nervous system, areas, motor and sensory systems)
introduction to neurology (nervous system, areas, motor and sensory systems)introduction to neurology (nervous system, areas, motor and sensory systems)
introduction to neurology (nervous system, areas, motor and sensory systems)
 
How to cure cirrhosis and chronic hepatitis naturally
How to cure cirrhosis and chronic hepatitis naturallyHow to cure cirrhosis and chronic hepatitis naturally
How to cure cirrhosis and chronic hepatitis naturally
 
Using Data Visualization in Public Health Communications
Using Data Visualization in Public Health CommunicationsUsing Data Visualization in Public Health Communications
Using Data Visualization in Public Health Communications
 
power point presentation of Clinical evaluation of strabismus
power point presentation of Clinical evaluation  of strabismuspower point presentation of Clinical evaluation  of strabismus
power point presentation of Clinical evaluation of strabismus
 
Pharmacokinetic Models by Dr. Ram D. Bawankar.ppt
Pharmacokinetic Models by Dr. Ram D.  Bawankar.pptPharmacokinetic Models by Dr. Ram D.  Bawankar.ppt
Pharmacokinetic Models by Dr. Ram D. Bawankar.ppt
 
Unit I herbs as raw materials, biodynamic agriculture.ppt
Unit I herbs as raw materials, biodynamic agriculture.pptUnit I herbs as raw materials, biodynamic agriculture.ppt
Unit I herbs as raw materials, biodynamic agriculture.ppt
 
Clinical Research Informatics Year-in-Review 2024
Clinical Research Informatics Year-in-Review 2024Clinical Research Informatics Year-in-Review 2024
Clinical Research Informatics Year-in-Review 2024
 
"Radical excision of DIE in subferile women with deep infiltrating endometrio...
"Radical excision of DIE in subferile women with deep infiltrating endometrio..."Radical excision of DIE in subferile women with deep infiltrating endometrio...
"Radical excision of DIE in subferile women with deep infiltrating endometrio...
 
Good Laboratory Practice (GLP) in Pharma-LikeWays.pptx
Good Laboratory Practice (GLP) in Pharma-LikeWays.pptxGood Laboratory Practice (GLP) in Pharma-LikeWays.pptx
Good Laboratory Practice (GLP) in Pharma-LikeWays.pptx
 

Health Expenditure Implications of SACU's Revenue Volatility in BLNs Countries policy brief_final_june_30[1]

  • 1. Health Expenditure Implications of SACU’s Revenue Volatility in BLNS Countries ISSUE BRIEF JULY 2010 Executive Summary Namibia's and Botswana's shares will drop from 8.1 percent and 5.1 percent of GDP in 2005 to 4.4 percent and 2.8 percent of GDP, respectively in T he Southern African Customs Union (SACU) is the world’s oldest customs union. Established as Customs Union Convention in 2020 (Figure 1). 1889, the union operated under different Figure 1: SACU Revenues as a share of agreements, which were negotiated and GDP (%) renegotiated with changing circumstances [1,2]. 30 Botswana Presently, the union is being governed by the 25 Lesotho 2002 Agreement. Its members are Botswana, 20 Namibia Lesotho, Namibia, Swaziland (BLNS countries) 15 Swaziland and the Republic of South Africa. 10 5 SACU member states deposit their customs and 0 excise collections in a common revenue pool 1994 2002 2005 2020 (CRP), which they share using a formula that has Source: Flatters and Stern (2005) evolved over the years. Under the 2002 revenue sharing formula (RSF), the BLNS countries Against the declining SACU revenues and the together get nearly half of the collections although heavy government reliance on income from the their joint gross domestic product (GDP) is less CRP, fiscal expenditures and hence public than 10 percent of SACU's GDP. Not surprisingly, programs in the BLNS countries will be adversely income from the CRP constitutes a considerable affected. A likely effect is that critical areas such proportion of total government revenue (about as health, education and agriculture, which are half in Lesotho, more than two thirds in Swaziland paramount for human development, may be and nearly 40 percent in Namibia). scaled down. This is an issue of major concern given that SACU countries carry the world’s worst SACU revenue is on the decline. Flatters and HIV/AIDS epidemic. Any scaling down of Stern [3] predict that Swaziland's SACU revenue prevention, care and treatment programs will as a share of its GDP will decline from 17.6 decelerate current initiatives and, in some cases, percent in 2005 to 9.4 percent in 2020; Lesotho's reverse advances made in combating the share will go down to 12.6 percent of GDP in scourge. 2020 from 21.5 percent of GDP in 2005; while Health Economics and HIV/AIDS Research Division University of KwaZulu-Natal, Westville Campus, J block, Level 4, University Rd, Durban, South Africa Tel: +27 (0)31 260 2592 | Fax: +27 (0)31 260 2587 | heard@ukzn.ac.za | www.heard.org.za
  • 2. To counter the problem, we suggest that, in the financial support for treatment in Lesotho, short term, the BLNS countries should lobby for Namibia and Swaziland. The availability of more donor support, exercise fiscal restraint and funding to treat people in need of antiretroviral allow for relatively higher budget deficits. In the treatment (ART) in the near future however, is not long run, the solution lies in restructuring their secure. PEPFAR's 2009-2014 plan shows a fiscal frameworks to move away from reliance on slowdown in the rate of enrolling new patients [5] SACU revenue, especially for recurrent and the Global Fund continues to face funding expenditures. This will necessitate the adoption of gaps [6]. With major donors increasingly reluctant an expenditure plan anchored on domestic to lock themselves into long-term funding for revenue. The BLNS countries may also aim at AIDS, the financial responsibility falls onto these efficient and effective use of public resources countries at a time when revenue injections from SACU are declining. The State of HIV/AIDS in BLNS Countries Figure 2 SACU revenue and Govt The state of HIV/AIDS in Southern Africa is contributions to HIV/AIDS prms 100 Share of SACU alarming. Continued new infections, especially 80 revenue to total amongst infants, national sero-prevalence rates 60 govt revenue among pregnant women and aggregate numbers (%) 40 of people living with HIV/AIDS are all very high in 20 Share of govt SACU member states. In Swaziland the United 0 contributions to Nations Development Program warned that `if the domestic HIV/AIDS current trends are not reversed, the longer term prgms (%) survival of Swaziland as a country will be seriously threatened' [4]. Existing levels of poverty Sources: UNAIDS (2008) [7]; Flatters and Stern (2005) and poor access to health services compound the impacts HIV/AIDS is having. The cost of care and treatment for people living with HIV and AIDS as well as support for those affected (such as the Declining SACU Revenues millions of AIDS orphans), applies pressure to already tight budgets. Receipts from the SACU CRP constitute a Lesotho, Namibia and Swaziland presently significant proportion of total government revenue shoulder a significant share of the financial in the BLNS countries. Governments of Lesotho and Swaziland stand out as the most dependent responsibility for HIV/AIDS given their development indicators (see figure 2). If more on SACU revenue among the SACU member people are to be enrolled onto ART programs, states, while Namibia's dependence, albeit slightly funding may increasingly have to be from these lower, has been gradually increasing in recent overstretched governments since donor years. commitment is uncertain. The US President's Available statistics, show that SACU income has Emergency Plan for AIDS Relief (PEPFAR) and been on the decline and is likely to continue going the Global Fund for AIDS, Tuberculosis and down. A number of factors explain the declining Malaria (the Global Fund) provide the greatest Health Economics and HIV/AIDS Research Division Harold Ngalawa, Khaled Ahmed and Alan Whiteside
  • 3. SACU revenue. These include the recent global (ii) Fiscal restraint aimed at realigning declining recession, the impact of the recession on the government revenue with public expenditures: South African economy and declining global trade This is both a short and long term solution. The tariffs. The European Union (EU) Sovereign Debt BLNS countries can address the financing gap Crisis and a slowdown of imports associated with between government revenue and required the 2010 FIFA World cup infrastructure are expenditures on HIV/AIDS by exercising fiscal additional factors that are expected to keep the restraint. This means cutting down on non-priority CRP declining. expenditures and, in some instances, even HIV/AIDS projects may have to be downsized. This approach will ascertain that countries do not unnecessarily accumulate public debt. Policy Options (iii) Increasing the fiscal deficit to avoid disrupting BLNS countries are largely left on their own to public projects amid declining government face the impending financial battle of falling SACU revenue: The BLNS countries can choose to revenues. The strategic geopolitical links between maintain the present level of fiscal expenditures southern African countries, that allowed high and let the running projects continue undisrupted. SACU revenue recepits, are largely obsolete. The declining government revenue, however, will Regional intervention, therefore, cannot be imply a corresponding increase in the budget realistically expected. deficit. This may be an inevitable short to medium term solution pending restructuring of the fiscal We present six policy proposals, not mutually framework. exclusive, to counter the problem, both in the short run and in the long run. (iv) Restructuring the fiscal framework to move away from relying on SACU revenue, especially (i) Lobbying for increased aid to offset the for recurrent expenditures: This is a long term declining SACU revenue: This is a short term solution. Taking this approach, the BLNS solution. Everything else remaining the same, the governments may have to reconsider how they BLNS countries are likely to face a widening gap utilise SACU revenue. A way forward is to move between government revenue and required public away from using SACU revenue for recurrent expenditures on HIV/AIDS, which can be filled by expenditures, in particular wages and salaries. a corresponding increase in donor funding. Donor Instead, the revenue should be channelled to funding for HIV/AIDS programs in BLNS countries finance investment projects such as infrastructure vary from country to country. Lesotho and development. Botswana, respectively, are the most and least dependent on donors for their HIV/AIDS projects (v) Developing a long-term expenditure plan among the BLNS countries. The funding gap will anchored on domestic revenue: It is imperative for depend both on the dependency ratio of public to the BLNS countries to develop fiscal strategies donor funding and on the extent to which the aimed at moving away from reliance on external BLNS countries have relied on SACU revenue to sources of revenue. This entails enhancing efforts finance government budgets. to improve domestic revenue collection. Larger amounts of domestic revenue will provide a Health Economics and HIV/AIDS Research Division Harold Ngalawa, Khaled Ahmed and Alan Whiteside
  • 4. cushion against any shock to the budget arising [2] Gibb, R. (2006). ‘The New Southern from the volatility of SACU revenues. This is a African Customs Union Agreement: Dependence long term plan intended to re-align public with Democracy,’ Journal of Southern African expenditures with domestic revenues. Studies 32(3):583-603. (vi) Efficient and effective use of public resources: [3] Flatters, F. and Stern, M. (2005). This is a long term solution that involves ‘Implementing the SACU Revenue-Sharing streamlining the public sector. This is to ensure Formula: Customs Revenues,’ Policy Brief that government is involved only in services that Prepared for the South African National Treasury. cannot be efficiently provided by the private sector, that government adheres to public [4] UNDP and Government of Swaziland, expenditure ceilings, and there is priority targeting (2006). ‘Country Program Action Plan (2002- of public expenditures towards more urgent 2010),’ Action Plan for the Government of productive projects. Swaziland. [5] PEPFAR (2009). ‘The US President’s Emergency Plan for HIV/AIDS: Five Year Policy Recommendations Strategy.’ URL: http://www.pepfar.gov/ documents/organization/133035.pdf In the short run, the BLNS countries should lobby for an increase in donor support to cover the [6] MSF (2010). ‘No Time to Quit: HIV/AIDS funding gap in critical areas such as HIV/AIDS. Treatment Gap Widening in Africa,’ Brussels: Donor funding may have to be complemented Médecins Sans Frontières. with fiscal restraint, cutting down expenditures in non-priority areas. Realising that the expenditure [7] UNAIDS (2008). ‘Domestic and International cuts need not be done in a manner that constricts AIDS Spending Data – Global Report 2008’. xls the economy, relatively larger fiscal deficits may file. URL: http://www.unaids.org/ be inevitable. In the long run, the BLNS countries en/KnowledgeCentre/HIVData/Tracking/default.asp should consider adopting an expenditure plan anchored on domestic revenue. The fiscal Contacts framework may have to be restructured, moving Harold Ngalawa, School of Economics and away from reliance on SACU revenue, especially Finance, University of KwaZulu-Natal, for recurrent expenditures. There is also need to email: ngalawa@ukzn.ac.za aim at efficient and effective use of public resources. Khaled Ahmed, Health Economics and HIV/AIDS Research Division, University of KwaZulu-Natal, References email: ahmedk@ukzn.ac.za [1] Ettinger, S. (1974). ‘The Economics of the Alan Whiteside, Health Economics and HIV/AIDS, Research Division, University of KwaZulu-Natal, Customs Union Between Botswana, Lesotho, email: whitesid@ukzn.ac.za Swaziland and South Africa,’ Unpublished PhD Thesis, University of Michigan. Health Economics and HIV/AIDS Research Division Harold Ngalawa, Khaled Ahmed and Alan Whiteside