The current national health sector infrastructural context, in particular, suggests the need to invest in the increase of investment in public expenditure, with emphasis on its allocation in absolute terms, up to its degree of periodical implementation.
In 2021, the State Budget (OE) was approved in the order of 368 billion meticais (MZN), representing 33% of the GDP forecast for 2021. Of this amount, 37.6 billion – corresponding to 10% of total public expenditure – were allocated to the health sector.
However, of the 37.6 billion MZN, 28 billion were allocated to operating expenditures and only 9.6 billion to investment expenditures, corresponding to 75% and 25% of total public expenditure in the health sector, respectively (Graph 1).
|Graph 1:2021nHealth Sector Budget1 (billion MZN)|
|Source: BER Jan – Mar 2021|
Although the budget, allocated to investment expenditures, is smaller than the budget for operating expenditure, its realisation is deficient, with an allocation of 9.6 billion MZN, of which only 2% of the forecast budget for the first quarter of 2021 was executed.
This scenario occurs in a context in which the health sector is still faced with challenges associated with the deficit of infrastructure, medical and nursing equipment, which significantly hinder the response capacity, as well as the quality of public health sector service provision.
Thus, the global realisation of expenditure in the health sector was 6.2 billion meticais, which corresponds to 16.4%, in a context in which, when analysing the performance of each of the functions, it appears that of the 10 functions , the sectors of Security and Public Order, Defence and Recreation, Culture and Religion, had realisation rates ranging from 21.2% to 37.1%, on the other hand, the sectors of Environmental Protection, Housing and Collective Development, Health, Economic Affairs, Security and Social Action and General Public Services, had realisations ranging from 4.4% to 18.3% (Graph 2).
|Graph 2: Budget Execution Rate in the Economic and Social Sectors from January to March 2021 (in billion MZN and in %)|
|Source: BER Jan- Mar 2021|
The poor quality of public expenditure and its lack of equitable distribution contributed to the devaluation of investment expenditures in the health sector during the first quarter. Such devaluations were felt in the issue related to the building of District Hospitals (DH), namely: the Ngaúma DH, the Macate DH, the Cheringoma DH, the Govuro DH, the Buzi DH, the Ponta Douro DH, as well as negatively contributed to suspending the requalification of the Sussundenga DH, which benefits 87,796 inhabitants.
Furthermore, the same devaluation of investments contributed to a delay for the beginning of the building of intermediate warehouses for drugs, as well as to the delay for building the central warehouse, to cover the provinces of Zambézia, Cabo Delgado and Sofala, whose need is extremely important and urgency, given the high demand for public health services in the above-mentioned provinces.
The occurrence of rains and strong winds, lightning strikes, floods in the South, the Cyclone Chalane, registered in December 2020 – which hit the provinces of Sofala, Zambézia and Manica, resulting in the destruction of socio-economic infrastructures, residences, agrarian units and health infrastructures – should have been a catalyst for expenditures, such as the building of district hospitals, intermediate warehouses and a central warehouse, to have been prioritised and included in the first quarter, even if it was in a smaller share.
The ideal degree of budget realisation in the first quarter of 2021 of the main economic and social sectors (health, education and economic affairs), taking into account the current devastating and harmful context to the economic and social fabric, associated with the Covid-19 pandemic, could be 25%, corresponding to a quarter of the annual expenditure, also considering the increase in availability resulting from the resumption of budget support by donors with a view to mitigating the economic and social implications imposed by a new “normal”, conditioned by the Covid-19 pandemic, which resulted in the biggest global and national recession.
BUDGET IMPLEMENTATION IN THE HEALTH SECTOR FROM JANUARY TO MARCH 2021
From 2020 to 2021, the growth rate of the health sector expenditure increased by 43%, from the previous 26.3 to 37.6 billion MZN. Meanwhile, the execution in the period from January to March 2021 was 16.4%, which represents a reduction of 1.6% compared to the same period of 2020, in which the execution in the first quarter was 18% – a sharp drop when compared with the education sector rate, which reduced only by 1.2 percentage points from 26.4% to 25.2%.
In the period under analysis, the lowest execution of the health expenditure was registered in the years 2017, 2018 and 2019 when expenditure did not exceed 14% (Graph 1). And in the 2021 economic year, there was low execution in the health sector again, despite the Budget Execution Report (BER) showing that resource allocation prioritises the allocation of resources to sectoral commitments (Education, Health and Agriculture), so that actions are taken in order to reduce social inequalities, increase agricultural production and fight and prevent Covid-19. It can be seen that there is a tendency to reduce the degree of budget execution, with a particular focus on the health sector which does not amount to 20% of the forecast budget in the first quarter, with some advances in the execution of the funds in the years 2016 and 2020 in which it was 19 and 18%, respectively, but still far from the average which should be 25% per quarter (see Graph 3 below).
Graph 3: Health Sector Budget Execution from January to March 2021 (billion MZN)
|Source: BER Jan- Mar 2014 to 2021|
Figures 4 and 5 show that the reduction in the degree of budget realisation in the health sector in the period from January to March 2021 was due, to a large extent, to the low degree of execution of internal and external investment expenditure, in the order of 1.4% and 2.1%, respectively, and that only operating expenditure has a high degree of execution, around 21%. If the realisation of the health sector expenditure remains in the same pattern, by the end of the year the sector will have realised only 65% of the budget, making it also possible to predict that by year end the quality of the expenditure in the health sector is hampered and major actions, such as the building of district hospitals, the central drugs and medical articles warehouse, among other important achievements, will be left undone.
As long as the current scenario prevails, the achievement of the goals established in the Economic and Social Plan (PES 2021) will also be hindered, affecting, for example, reaching the largest number of women (between 25 to 54 years old) that benefit from cervical cancer screening. On the other hand, it will also contribute to the low care for adults and children living with HIV, who benefit from ART – among other goals, which can be influenced by a multiplier effect.
Graph 4: Rate of realisation of health sector expenditure according to functional classification
Source: BER Jan- Mar 2015 to 2021
Graph 5: Execution of Health Sector Investment Expenditures January to March 2021 (billion MZN)
Source: BER Jan- Mar 2021
Additionally, it is noted that with the resumption of support from the World Bank to Mozambique (to be allocated by the Northern Integrated Development Agency [ADIN]) the country will benefit from external resources to the tune of 1.1 billion USD, resulting from donations signed by the Government and the World Bank, which will be used in the coming months to build 800 classrooms, 200 homes for teachers, 10 hospitals, 43 water supply networks, 130 community infrastructures (sports and social), 20,000 improved latrines and 40 public bathrooms, as listed by the Head of State.
These interventions by the Government have not yet been strategically presented as a properly designed plan, which opens space for the following questions:
- How will hope be guaranteed to the population?
- How will the environment of humanitarian catastrophe, caused by the military conflict in Cabo Delgado, be improved?
- And, in particular, how to contribute to the Strengthening of the Primary Health Care Programme?
- Finally, how will World Bank support be reflected in the lives of Mozambicans, looking at the history of the execution of funds already allocated?
In the allocation of resources, in the first quarter of this year, there is a tendency to reduce the degree of budget execution, with a particular focus on internal and external investment expenditure, in which the realisation rate does not exceed 2% of the allocated budget. This is true at a time when the growth rate of the health sector spending increased by 43% in nominal terms, from the previous 26.3 billion MZN in 2020 to 37.6 billion MZN in 2021. The poor quality of public expenditure and its lack of equitable distribution means that spending in the health sector in the first quarter leaves behind investment expenditure such as the start of building District Hospitals, Warehouses as well as Medicines Centres.
In addition, there is a greater pressure on the various economic and social sectors in terms of the need for investment, with a particular focus on the health sector, which should be one of the points of reference for the main public investment expenditures in the health sector, in particular, to at least be 25%, as the need to ensure a timely response to the adversities imposed by the current context of the new normal, which requires the State to adopt measures to respond and mitigate the pandemic of Covid-19, should also be reflected in budgetary terms, the realisation of which must also comply with the envisaged budgetary realisation deadlines and periods.