Background

Donor health aid to countries nearly doubled between 2002 and 2005, yet the terms of this aid create challenges for its effective use within countries. The Organization for Economic Cooperation Development (OECD), the Paris Declaration, signed by 114 countries, the Accra Agenda for Action, and the High-Level Forum on the Health MDGs have all called for increased donor coordination to ensure that countries are able to use health aid effectively to meet country health priorities.

Despite the increasing calls for coordination and mechanisms to improve the effectiveness of development assistance, aid remains predominantly short-term in duration, unpredictable, geographically or technologically tied, and highly fragmented. Greater harmonization and alignment of donor aid can, in conjunction with broader health financing reforms, improve the equity of health outcomes.

Harmonized financing will require mutual accountability between donors and recipients. Given the reality of increasing pluralism in health aid, it is Ministry officials who must begin to be more selective and directive with the donor aid they receive and engage donors in concrete actions to improve the terms of aid to maximize their impact on health in recipient countries.

Challenges

Many donors will not provide funding to governments that lack effective systems to manage public spending, particularly where financial flows cannot be audited and monitored and where goods and services are procured through non-transparent, anti-competitive, and possibly corrupt systems. Recipient countries also need to be held accountable for results, and basic information systems must be in place to report outputs. To be effective at donor harmonization and alignment initiatives, Ministers of Health must be able to demonstrate to donors that they are strong leaders capable of effectively managing funds. By the same token, donors need to demonstrate that they are serious about looking critically at the ways the requirements of their donor dollars hinder effective strengthening of health systems due to disease-specific requirements, lack of linkage of donor funds to national priorities, and burdensome reporting and funding requirements.

As a response to these challenges created by the traditional delivery of donor aid, many developing countries and the international community began using a new approach to health sector development. This sector-wide approach (SWAp) directly links donor funding to a single health sector strategy and places the responsibility for the direction and disbursement of funds in the hands of the government. As a result of the SWAp, key discussions between the government and donors shift to policy formulation and away from the implementation of programs.

The Ministerial Leadership Initiative is helping MLI countries to meet their goals for increased donor harmonization and alignment. For example, MLI is providing technical assistance to the Ministry of Health and Sanitation in Sierra Leone to move toward the development of a SWAp arrangement. In Senegal, MLI is working with the Ministry of Health to deepen their existing SWAp and move toward a country Compact.