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Tackling the HIV/AIDS Pandemic in Zambia in the Face of Our Huge Debt Burden

Tuesday, 01 April 2003

Introduction

The greatest challenges that most poor countries especially in the Sub-Saharan Africa (SSA) are facing today are the burden of external debts and the escalating HIV/AIDS pandemic. These are further compounded by persistent fiscal deficits in the national budgets that consequently erode governments’ ability to provide for their citizens. Are these problems resolvable and if so, to what extent? This article is an attempt to analyse government’s efforts to deal with the HIV/AIDS pandemic in the context of a huge foreign debt.

Current Economic Framework

These problems should be understood in the context of new liberal policies that emphasise the supremacy of the market as a tool for rationing scarce resources among various competing needs. In effect this means that more and more vulnerable groups in society are left at the mercy of forces of demand and supply to determine whether or not they are going to access a particular service or commodity. The debate now is: should services deemed vital to the well being of a person such as access to healthcare (including provision of antiretroviral drugs--ARVs) or indeed access to education be market determined? Would the current socio-economic scenario in Zambia adequately support such a mechanism?

Several research papers and articles from Jubilee-Zambia have in the past amply showed that a debt overhang is undesirable for economic growth. Firstly, with a heavy debt overhang, government is compelled to resort to high domestic taxes on corporate profits to raise money for meeting debt service payments. Such a situation scares away the would-be foreign investors and therefore stifles efforts aimed at mobilising foreign resources for investments, which are supposed to augment local investments. Secondly and more importantly, a huge foreign debt means that government has to find hard currency to meet its debt service obligations and this in essence means diverting development resources away from where they are most needed.

Raising revenue through Exports

But for Zambia just like many other poor countries, besides the concessional loans and conditional grants from the international financial institutions, the export sector is the main source of the hard currency and this sector e.g. copper in the last decade has been registering unimpressively low receipts due to unfavourable terms of trade at the world commodity markets. And even if sufficient earnings were to be recorded in the export sector, these would not necessarily make a huge positive impact on the life of an ordinary Zambian. This is so because most of the firms in the export trade are in the hands of foreign investors whose allegiance is to their countries and so the export receipts easily find their way out under the free externalisation policy that is currently in place.

Is the fight against HIV Winnable?

According to information available from the UNAIDS and the World Bank, of the 17 African countries which qualified for the Highly Indebted Poor Countries’ Initiative (HIPC) in 2001, statistics show that despite reaching the Decision Point these countries were scheduled to spend $1.4 billion per annum in repaying their external debts. UNAIDS estimated that this amount was equivalent to the sum required by these same countries to really effectively begin the fight against AIDS. At the domestic level, the 2001/2002 Zambia Demographic Health Survey estimates that the HIV prevalence rate in the adult population ( 15-49 years ) now stands at 16%. The fall in the prevalence rate has been attributed to, among other factors, the high sensitisation programmes that are beginning to positively influence sexual behaviour change among the people. Although in 2002, the disease incidence rate was declining, Zambia’s disease burden continued to be overwhelmingly compounded by the continued high poverty incidence and the HIV/AIDS prevalence rate (Government Economic Report 2002).

As earlier alluded to, the Zambian government is constantly overwhelmed by large foreign debt repayments and hence must slash funding in the social sectors (health and education). Unfortunately, this includes funds for HIV prevention programmes and treatment. For instance, according to the World Bank and the UNAIDS estimates on Zambia in 2001, the estimated costs for providing HIV/AIDS prevention, care and treatment (HAART) was $164.2 million while average debt service due from 2001-2005 was $174 million. Yet combined annual budgetary allocations to the health sector are far much less than $164 million per year.

External assistance under Structural and Macroeconomic reforms

The inadequate budgetary allocations to the health sector are further aggravated by the macroeconomic and structural reforms whose ripple and adverse effects are more pronounced on the poor and vulnerable groups. As a pre-condition for accessing concessional loans from the International Monetary Fund (IMF), heavily indebted and poor countries like Zambia are required to undertake structural reforms as a basis for realigning the economy and hopefully bring it to a buoyant growth path. Key among the reforms are: the privatisation of public utilities (such as water and electricity) and commercial services (especially in the transport sector), which hitherto have been in government hands, a reduction in public spending as a way of checking extravagance in government expenditure, introduction of user fees in healthcare and education provision, and liberalisation of the trade and financial services.

But one thing is clear: structural reforms as pursued in Zambia have been strongly correlated and associated with rising poverty levels occasioned by massive job losses. This has also been accompanied by worst forms of income and wealth inequalities. The resultant poverty has severely undermined the standard of living and quality of healthcare delivery systems for the poor in Zambia.

User fees in an economic environment characterised by high unemployment and poverty levels limit accessibility to healthcare provision. Yet these fees are a central feature of the IMF and World Bank backed structural reforms. The argument usually advanced by the proponents of neo-liberal policies to justify their presence is that “to treat healthcare as a social right and to attempt to provide free services to everyone prevents the government health system from collecting revenues that many patients are able and willing to pay”. But can an average Zambian afford fees on specialised medical services? Why should everything be quantified in monetary terms when it is obvious that the majority of Zambians cannot afford the services?

Experimenting with structural reforms in healthcare provision!

To underscore our point above, let us look at a typical case from one African country experimenting with structural reforms. According to Njoki Njoroge Njehu a Kenyan who now directs the 50 Years is Enough Campaign in Washington D.C., describes her experience: “When I was a young girl growing up near Nairobi, Kenyatta Hospital was the pride of East and Central Africa—a sophisticated regional centre of care like, say, the Washington Hospital Centre in the United States.”

“When I visited my aunt there in 1997, she was sharing a bed with another patient. Most wards have no beds because of lack of resources, and all the beds had two people in them. Guards used to check visitors to prevent them from bringing food in from outside; now the guards are gone and if you don’t bring food your relatives simply won’t eat. My aunt was lucky that the dollars I brought with me could buy the medications she was prescribed, and which we had to purchase elsewhere and bring back to the hospital for the nurse to administer. Not everyone has relatives in the US, or can get to Kenyatta, the best public hospital in Kenya—which is far from being one of the poorest African countries.

“In 1981, there were ten thousand people for every doctor in Kenya; by 1994 that ratio had gone up to nearly 22,000 people for every doctor. In Uganda, just to our west, there were 661 people for every hospital bed in 1981, while in 1994 there were 1,092 for every bed. In Ghana, a country often touted as an example of how structural reforms can work, the percentage of infants with low birth weight has gone up from 5% in 1988 to 17% in the period of 1992-1995”.

This scenario is not significantly different from the Zambian situation where hospitals have now been reduced to ‘Departure Lounges’ for patients. There are no drugs, no health kits for the doctor—the medical personnel is simply overwhelmed by endless problems due to insufficient funding.

Way forward

Firstly, the external debts of Zambia must be cancelled in full in order to unlock resources which can then be used to fund the health needs of this country including the HIV/AIDS which is decimating the productive age groups. Secondly, the structural reforms in form of user fees or cost-sharing schemes especially for the poor must be scrapped, with Zambia free to pursue policies designed to emphasise government’s role in guaranteeing health care and other essential services.

This is why we of Jubilee-Zambia continue to call for deeper debt relief that takes into account the current social and economic conditions of our country. We strongly urge our government to put in place a Debt Mechanism that will assure that all debt relief does reach and benefit the poor especially those infected and affected by the HIV/AIDS scourge. Debt relief should not be seen and treated as assistance to the debtor countries but as a moral obligation to the poor people of Africa. In this regard we call for improvement in debt relief through total debt cancellation as a basis for rebuilding our battered economies from HIV/AIDS, high poverty levels, unemployment cycles and low levels of literacy among our populace.

By Jack Jones Zulu—Policy Analyst At Jubilee-Zambia