How IMF-World Bank make Africa sick

Issue 

BY ANN-LOUISE COLGAN

Over the past two decades, the World Bank and International Monetary Fund (IMF) have undermined Africa's health by forcing governments to reduce the role of the state and cut government expenditure. These institutions have pressured Africans to orient their economies towards greater integration into international markets at the expense of social services and long-term development.

Investments in health care by African governments in the 1970s achieved improvements in key health indicators. Across sub-Saharan Africa, the first decades after independence saw significant increases in life expectancy, from an average of 44 years to more than 50 years.

However, in the 1980s and 1990s, African governments had to cede control of economic decision-making in order to qualify for World Bank and IMF loans. The conditions attached to these loans undid much of the progress achieved in public health.

The policies dictated by the World Bank and IMF exacerbated poverty, providing fertile ground for the spread of infectious diseases, including HIV/AIDS and other health problems. Cuts in health budgets and privatisation of health services eroded previous advances in health care and weakened the capacity of African governments to cope with the growing health crisis. Consequently, during the past two decades, the life expectancy of Africans has dropped by 15 years.

Poverty

The public sector job losses and wage cuts associated with World Bank and IMF programs increased hardship in many African countries. During the 1980s, when most African countries came under World Bank and IMF tutelage, per capita income declined by 25% in most sub-Saharan African countries. The removal of food and agricultural subsidies caused prices to rise and created increased food insecurity. This led to a marked deterioration in nutritional status, especially among women and children.

In Zambia, for instance, following the elimination of food subsidies, many poor families had to reduce their number of meals per day from two to one.

Malnutrition resulted in low birth-weights among infants and stunted growth among children in many countries. It is estimated that one in every three children in Africa is underweight. In general, between one-quarter and one-third of the population of sub-Saharan Africa is chronically malnourished.

The deepening poverty and reduced access to basic services across the continent has created the conditions for the spread of infectious diseases. In Africa today, almost half of the population lacks access to safe water and adequate sanitation services.

As a result, people's immune systems have become weakened and their susceptibility to infectious diseases has greatly increased. A joint release issued by the World Health Organisation (WHO) and the Joint UN Program on HIV/AIDS in April 2001 reported that the number of cases of tuberculosis in Africa will reach 3.3 million per year by 2005. The WHO reported in 2001 that almost 3000 Africans die each day of malaria. Each year in Africa, the disease takes the lives of more than 500,000 children below the age of five.

Most devastating of all has been the impact of the HIV/AIDS pandemic. The spread of HIV/AIDS in Africa has been facilitated by worsening poverty and by the conditions of inequality, intensified by World Bank and IMF policies. Economic insecurity has reinforced migrant labour patterns, which in turn have increased the risk of infection. Reduced access to health care services has increased the spread of sexually transmitted diseases and the vulnerability to HIV infection.

More than 17 million Africans have died of HIV/AIDS. It is currently estimated that more than 28 million of the 40 million people living with the disease worldwide are in sub-Saharan Africa. There are more than 12 million African orphans who have lost their mothers or both parents to AIDS.

The social and economic effects of the AIDS crisis are reversing post-independence progress and exacerbating conditions of underdevelopment. The policies imposed by the World Bank and IMF have fuelled the spread of the disease and continue to hinder the response to this health emergency.

Health care cuts

The health care systems inherited by most African states were unevenly weighted toward privileged elites and urban centres. In the 1960s and 1970s, substantial progress was made in improving the reach of health services in many African countries.

Most African governments increased spending on health during this period. They endeavoured to extend primary health care and to emphasise the development of a public health system to redress the inequalities of the colonial era.

There were increases in the numbers of health professionals employed in the public sector, and improvements in health care infrastructure in many countries. There was also some success in extending care to formerly unserviced areas and populations. Across the continent, there were improvements in key health care indicators, such as infant mortality rates and life expectancy. The number of doctors and nurses was also significantly increased during this time.

With the economic crisis of the 1980s, much of Africa's economic and social progress over the previous two decades began to come undone. As African governments became clients of the World Bank and IMF, they forfeited control over their domestic spending priorities. The loan conditions of these institutions forced contraction in government spending on health and other social services. Cutbacks in the health sector have severely undermined existing services. And Africa's debt repayment obligations to foreign creditors have diverted money directly from spending on health.

Cutbacks in government budgets led to major cuts in the health sector. In the 42 poorest countries in Africa, spending on health care fell by 50% during the 1980s. In Nigeria, per capita expenditure on health fell by 75% between 1980 and 1987.

The dramatic drop in health expenditure in the 1980s and 1990s resulted in the closure of hundreds of clinics, hospitals and medical facilities across the continent. Those that remained open were generally left under-staffed — thousands of health care professionals throughout the continent lost their jobs — and lacking in essential medical supplies. Many were unable to afford even basic vaccines. In 14 sub-Saharan African countries between 1990-1992, the level of polio vaccination dropped by more than 10% as a result of cutbacks in health care services.

Even as governments' spending on health was cut, the amounts being paid by African governments to foreign creditors continued to increase. By the 1990s, most African countries were spending more repaying foreign debts than on health or education for their people. Health care services disintegrated, while desperately needed resources were siphoned off by foreign creditors.

It was estimated in 1997 that sub-Saharan African governments were transferring to Northern creditors four times what they were spending on the health of their people. In 1998, Senegal spent five times as much repaying foreign debts as on health. Across Africa, debt repayments compete directly with spending on Africa's health care services.

Privatisation

Privatisation forms a centrepiece of the World Bank and IMF agenda. Reducing the size and scope of government, and privatising state-owned enterprises and services, is a major element of World Bank and IMF programs. Under World Bank and IMF direction, control of health care services has increasingly been transferred from African governments to the private sector. The rationale is that health care services are better financed and more efficiently delivered privately.

The World Bank has recommended several forms of privatisation in the health sector. These include: the introduction of "user fees" for health services previously provided free of charge; the promotion of health insurance schemes; and increased investments in private care in order to attract patients to private facilities. Through these measures, private services are made the primary focus of health care.

Throughout Africa, the privatisation of health care has reduced access to necessary services. The introduction of market principles has transformed health care from a public service to a private commodity. The outcome has been the denial of access to the poor, who cannot afford to pay for private care.

The World Bank and IMF have argued that "user fees" will tax the rich and that a system of exemptions will protect the poor. However, the evidence shows that such fees have driven the poor away from health care services.

Ghana, Swaziland and the former Zaire were among the first African countries where user fees replaced free, or almost free, services. In each country, studies show that the introduction of fees led to reduced utilisation of these services. Studies in Cote d'Ivoire have shown that those with income above the median make more use of medical services when a fee is charged, while those with below-median incomes reduce their use. Across Africa, reports indicate that attendance at hospitals and clinics drops significantly after the introduction of user fees.

Schemes intended to exempt the poor from user fees have been ineffective. A comprehensive UNICEF study discovered that such schemes are rare. The study claims that poor people are generally unaware of such exemptions, and that there are often complex administrative barriers involved. The report concludes that the implementation of exemption schemes is infrequent and is applied in ad hoc ways.

As a November 2000 WHO paper concluded, user fees "increase the barriers disproportionately faced by the poor when seeking health care". Their failure to generate revenue has also undermined their economic rationale, as propounded by the World Bank and IMF.

In 1998, the World Bank's operations evaluation department reported that nearly 75% of projects in sub-Saharan Africa included the establishment or expansion of user fees.

As the negative effects of user fees have begun to receive more public attention, the Bank has sought to distance itself from the promotion of these fees. In a policy statement at the end of 2000, the World Bank announced that it was stepping back from the promotion of user fees for basic social services in the developing world.

It stated that it supports the provision of basic health care for free. However, it added that well-designed and well-implemented fees can be useful in mobilising additional resources for these services in poor countries. It maintains that exemption schemes do work in some countries. Overall, it remains convinced that user fees can improve the quality of health care services being provided.

It is difficult to ascertain whether the World Bank is still pushing user fees in practice. Indeed, it is not easy to monitor the content of the World Bank's adjustment programs at all because of the lack of disclosed information on this form of lending. At the IMF, no move has been made to indicate a new policy on the imposition of user fees in borrower countries.

Another form of privatisation involves the promotion of insurance schemes as a means to defray the costs of private health care. This is inherently flawed in the African context. Less than 10% of Africa's labour force is employed in the formal job sector. Therefore, the vast majority of people are not eligible for insurance through their employer.

Income levels in Africa are extremely low, and have been reduced further by wage cuts and lay-offs associated with World Bank and IMF austerity policies. Most Africans cannot afford the cost of private insurance. Insurance schemes cannot resolve the issue of access to private health care in African countries.

When infectious diseases constitute the greatest challenge to health in Africa, public health services are essential. Private health care cannot make the necessary interventions at the community level. Private care is less effective at prevention, and is less able to cope with epidemic situations. Successfully responding to the spread of HIV/AIDS and other diseases in Africa requires strong public health care services.

The privatisation of health care in Africa has created a two-tier system which reinforces economic and social inequalities. Despite devastating consequences, the World Bank and IMF have continued to push for the privatisation of public health services.

Another concern is the privatisation of public water systems, a strategy being promoted by the World Bank in an increasing number of African countries. This involves the reduction of public subsidies for clean water. It also involves, in some cases, the introduction of cost-recovery measures for access to water supplies. More than 2 million people in developing countries die each year because of diseases related to the lack of clean water. Many are children. Increased privatisation of water in African countries can only increase the risk of ill-health among the poor.

Debt cancellation

There is growing criticism of the impact of World Bank and IMF programs in developing countries. As a result, these institutions have shifted their public stance in favour of "poverty reduction". They have attempted to re-package structural adjustment to include greater emphasis on social development programs.

The World Bank and IMF have made it a requirement for countries to prepare "poverty reduction strategy papers" as a condition for the receipt of new loans or debt relief. These papers are intended to be drawn up by national governments in consultation with civil society "stakeholders", with World Bank and IMF guidance.

The World Bank and IMF have also renamed structural adjustment lending. The IMF now uses the term "Poverty Reduction and Growth Facility". The World Bank's new term is "Poverty Reduction and Support Credits". The World Bank has also funding for health, and for HIV/AIDS programs in particular.

New lending for health and education can achieve little when the debt burden of most African countries is already unsustainable. Debt cancellation should be the first step in enabling African countries to tackle their social development challenges. Additional resources to support health and education programs should be conceived as public investment, not new loans.

The World Bank and IMF have failed to change their basic agenda and operations. The conditions attached to World Bank and IMF loans still reflect the same orientation prescribed over the past two decades.

The recent moves towards promoting poverty reduction have permitted these institutions to increase the scope of their loan conditions to include social sector reforms and governance aspects. This allows an even greater intrusion into the domestic policies of African countries.

It is highly inappropriate that external creditors should have such control over the priorities of African governments. And it is disingenuous for such creditors to proclaim concern with poverty reduction when they continue to drain desperately needed resources from the poorest countries.

The free market fundamentalism of the World Bank and IMF has had a disastrous impact on Africa's health. The all-out pursuit of market-led growth has undermined health and health care in African countries. It has forced governments to sacrifice social needs to meet macroeconomic goals.

This approach to development is fundamentally flawed. The failure to prioritise public health denies its significance in promoting long-term economic growth. As the WHO Commission on Macroeconomics and Health recently concluded, health is more than an outcome of development, it is a crucial means to achieving development (<http://www.who.int/cmhreport>). Investments in Africa's health must therefore form a central part of any comprehensive development strategy.

Economic and social progress in Africa cannot succeed in the context of the current health crisis. In order to address this crisis, it is necessary to tackle the structural factors that fuel it. The World Bank and IMF must accept responsibility for the devastating impact that their policies have had on Africa's health. If the US is serious about responding to Africa's health crisis, it must use its power at the World Bank and IMF to end the harmful policies of these institutions.

[This is an abridged version of Hazardous to Health: The World Bank and IMF in Africa, a position paper from the US-based non-governmental organisation Africa Action. The full paper is on the internet at <http://www.africaaction.org/action/sap0204.htm>.]

From Green Left Weekly, June 26, 2002.
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