Corruption in the health sector

Good practice - Examples

Project description

In December 2004 DFID agreed to provide £100 million to the Malawi Government for support to the health sector over a period of six years (2005/6 to 2010/11). DFID is pooling its contribution to the Sector Wide Approach (SWAp) in health with the World Bank and Norway/Sida.

A Memorandum of Understanding (MoU) governs the relationship between the Government of Malawi and collaborating partners and sets out the different undertakings, governance procedures for the SWAp and capacity building requirements.

The three main components of the DFID support are:

• an Essential Health Package designed to deliver a prioritised package of services that focuses on the major causes of morbidity and mortality, particularly those that affect the poor;
• an Emergency Human Resources Programme that aims to double the number of nurses and triple the number of doctors in Malawi by expanding training capacity and improving incentives for health workers to stay in the profession;
• and capacity building in financial management, procurement, human resources, monitoring and evaluation, and health services planning and management.

DFID intends to set up a joint health office with Norway/Sida to improve the effectiveness and lower transactions costs for the Government and other collaborating partners.

Anti-corruption aspects

The programme is rated "high risk" by DFID not because of programme design, which is viewed as "medium risk", but due to factors exogenous to programme design. Overall sector funding is below recommended levels and may be inadequate to produce significant impact on health outcomes. It has been assumed that more aid will become available in due course.

Malawi has begun a reform process under its new government, but future governments may not sustain it. The new government has demonstrated determination to impose greater fiscal discipline and fiduciary reforms, which are seen as necessary to enable the programme to achieve its objectives. A new public procurement system is being implemented.

Donors are supporting Government plans to institutionalise political reform in the hope that stronger institutions will make backsliding more difficult. Financial management and procurement procedures have been developed for the SWAp, offering safeguards while simultaneously building capacity at central and district levels. These include time bound Financial Management and Procurement Improvement Plans, a commitment to fill accountant vacancies, independent financial and procurement audits, and long-term Technical Assistants with mentoring, management and supervisory responsibilities.

World Bank procedures will be used for international competitive bidding until Government systems become fully and effectively operational.

Corruption was a major problem under the previous government, especially in the drugs and the supply chain. A condition precedent for DFID disbursements is an agreement on an action plan to improve the effectiveness and integrity of the Central Medical Stores and drugs supply chain.

To retain and attract health workers one aim of the human resources programme is to raise health workers salaries. The proposed salary top-ups are affordable only if fully funded by donors. DFID recognises that the Government is vulnerable to the withdrawal of donor funding and has undertaken to give notice of two financial years, in the unlikely event that the UK Government felt it necessary to withdraw or reduce its contribution to salary support.

Other donor supported activities in Malawi of relevance for reducing the risk of corruption in the health sector:

• Financial Management, Transparency and Accountability Project (FIMTAP), World Bank, 2003. This ongoing project aims to improve an effective and accountable use of public expenditures through capacity building and institutional strengthening for budget implementation and oversight, and increase transparency of government institutions, as well as improve human and institutional capacity for expenditure accountability. Project assessment documents can be downloaded from the World Bank web site.

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