FOR ECONOMIC GROWTH, AFRICA TOLD...Give priority to health sector - Prof. Benno Ndulu

THE Governor of the central Bank of Tanzania (BoT), Professor Benno Ndulu, has urged African governments to consider the heath sector as a priority area for their citizens, saying that good health is a means to raising economic growth. The good professor threw this challenge at economic and financial stakeholders from 20 sub-Sahara African countries who were gathered in Dar es Salaam early this week for the 14th Seminar on African Economic Research Consortium (AERC). The event, which was attended by about 80 participants including central bank governors and finance ministers of the African countries in the region, deliberated on various economic issues affecting their countries, and ways on how to attain the Millennium Development Goals (MDGs) for their respective countries by the 2015 deadline! Ndulu said “good heath has a direct impact on raising productivity through increased productive performance of individuals engaged in the production of goods and services.” Not only that, he went on, adding that “good health is, in fact, considered an entitlement that every citizen in a country deserves for their well-being.” Basing his views on the proclamation of the need to fulfill the United-Nations-initiated MDGs, and the commitment of each country towards attainments of those goals, Ndulu said “the burden of disease resulting from poor health is a major constraint to rapid growth, particularly for African countries where the tropical climate is a fertile host to a wide range of diseases.” To illustrate, 'Roll Bank Malaria' statistics for the malaria disease and its prevalence in Africa estimate that there are more than one million deaths which result from 300 million acute cases of malaria globally each year. About 90 per cent of the deaths occur in Africa alone, as a result of the combination of preponderance of infections and low ability to cope with them. It is also estimated that malaria alone costs Africa about US$12 billion every year in lost productivity (GDP) as a result of malarial infections. The (GDP) growth penalty from malaria is estimated at 1.3 per cent annually in some Africa countries! “The burden of this is not just in terms of lost growth,” Professor Ndulu said, adding that direct costs to households for heath care ― and to government ― are heavy when measured in relation to income levels in the African region. The costs range between 2.5 and seven per cent of household incomes on average! Based on research studies,

invariably health-related private expenditures take up a higher proportion of household incomes in African countries than in other regions of the world. Higher poverty in the region is a major reason for this. Despite all this, Africa still hosts more than one-third of the world’s poor. The indirect costs are also significant ― particularly the number of hours lost through ill-health. Health budgets take a significant portion of total government revenue, in most cases coming to second only to education!Giving examples from Tanzania, Prof. Ndulu said “there is evidence to show that the poor have increased their access to publicly-provided social services, including health and education via the removal or reduction of fees for basic services.” Ndulu, who was once an AERC executive director, paints a clear picture of how the efforts of the government of Tanzania to reduce other poverty dimensions ― like health and education services delivery between 2000 and 2010 fiscal year ― are yet to significantly tame income poverty at the individual and macro-levels in the country! He says government expenditure on education as a percentage of total budget rose from 6.8 per cent in the fiscal year 1995/96 to 16.3 per cent in 2011/2012, while that of health rose from 3.7 per cent to 8.8 per cent! During this period, education, water and health were treated as priority sectors by the Tanzania government. In that regard, the rapidly growing domestic revenue, as well as foreign aid resources, were more than proportionately geared towards the delivery of these services. The growth experience in Tanzanian during the last decade has shown that high rates of economic growth can be achieved without making fast and deep inroads into income poverty reduction. Over the last decade, annual growth of the economy has averaged an impressive seven per cent. However, the rate of reduction in income poverty levels has remained unacceptably low. For example, income poverty measured by the Headcount Index declined only marginally ― from 35.7 in 2001 to 33.6 in 2007 ― even though the GDP growth rate averaged 7.1 per cent over the period!