Donors are moving towards providing aid in the form of direct support to the budgets of developing countries, but experts are calling for more spending on health and education because there are not enough teachers, nurses and doctors.

"Current aid is failing poor people - only eight cents in the aid dollar are channelled into government plans that include the training and salaries of teachers and health workers," said Tom Noel, a policy advisor at Oxfam, the UK-based development agency, and author of 'Paying for People: Financing the skilled workers needed to deliver health and education services for all', a briefing paper for the organisation.

"Aid donors must change the way they provide money, making long-term commitments and supporting national plans," he wrote. "Over four million health professionals and support staff are needed, one-quarter of them in Africa. If things carry on as they are now, these gaps are not going to be filled."

A major proportion of donor aid is often devoured by administration and personnel costs, said James Jones Zulu, a programme manager at the Southern Africa Regional Poverty Network, which focuses on sustainable reduction of poverty.

"The trend is that donors are moving away from project funding to general budget support (GBS): it saves the high transaction cost and time [spent] meeting with donors, preparing reports, hiring personnel to monitoring projects, costs of consultants."

He pointed out that Zambia at one time held 1,300 accounts with various donors. "The government had to prepare that many reports ... with GBS, the government can utilise the money directly and according to its priorities. Aid is also more effective when it is aligned with the country's priorities."

GBS is still a relatively unexplored area, but "evaluations show that it delivers good results in social spending where donors and governments have built mutual trust and transparency," Noel commented. "It delivers results where civil society is better at holding government to account, and it is also a contributing factor to that accountability; it delivers results where there is better management of public finances, and it is a contributing factor to that better management."

Developing countries increased their investment in health and education in the last decade, employing thousands more workers, the Oxfam paper acknowledged, but doing more to meet the United Nations (UN) Millennium Development Goals (MDGs) on education and health was beyond their reach.

Andy Berg, of the International Monetary Fund, and Zia Qureshi, of the World Bank, note in their paper, 'The MDGs: Building Momentum', that "In sub-Saharan Africa, budget allocations are, on average, short of the benchmark of 20 percent of the recurrent budget for education agreed to under the 'Education for All Fast Track Initiative', and the benchmark of 15 percent of the recurrent budget for health adopted by African governments in 2000."

According to Berg and Qureshi, Africa will need to triple its health workforce by 2015, adding more than a million workers. "The scaling-up of human development services will require a substantial increase in financing, which will need to come from both improved domestic resource management and larger aid inflows."

State of health
While the World Health Organisation (WHO) has made good progress in analysing the approximate cost of recruiting and retaining health workers, Noel said the available information on the education sector was inadequate. "UNESCO [UN Educational Scientific and Cultural Organisation] should now complete the same analysis for the teaching profession, so that there can be no doubt and no excuses."
In its annual report last year, the WHO identified sub-Saharan Africa, with only 600,000 health workers, as the region worst affected by the shortage of medical personnel. While brain drain was partly to blame, many developing countries also lacked the resources to train personnel and keep them in the country.

Tanzania, for example, produces about 640 doctors, nurses and midwives each year. "To reach the WHO-recommended staffing levels in 10 years it would need 3,500 each year, even assuming there is no attrition due to retirements, deaths and migration," Oxfam's Noel pointed out.

The Commission for Africa, set up by British Prime Minister Tony Blair in 2004 to take a fresh look at the continent and the international community's role in its development, put the direct cost to Africa of health-worker migration at US$500 million each year.

Oxfam found that fragmented and underpaying public systems, particularly in the health sector, lost personnel to private providers and donor-funded, disease-based programmes. Research in Ethiopia showed that medical specialists could earn three times as much working for an American donor agency, as they could at the ministry of health.

WHO estimated that countries with severe health-worker shortages would need to increase their level of spending by about $1.60 per capita to meet the cost of training new health personnel. "To pay the salaries of the scaled-up workforce as they finish training, a further increase of $8.30 per capita would be required ... This implies extra investment of a minimum $7 billion each year," Noel said.

State of education
Oxfam has calculated a global shortage of 1.9 million primary-school teachers, "the number needed to ensure that every school-age child can be taught by a qualified teacher in a class of no more than 40 children, which is the maximum recommended by institutions such as the World Bank and UNESCO".

Noel said sub-Saharan Africa would need to increase its current stock of 2.4 million teachers by 68 percent in ten years to reach the UNESCO target, "and many of the current teachers are poorly trained: 43 percent of teachers in the Congo fail to meet minimum teaching quality standards".

According to UNESCO and the United Kingdom's (UK) Department for International Development, it would take approximately $10 billion in external financing annually to achieve the goal of ensuring that every child completed a quality primary education by 2015, while Noel put the minimum at $6.7 billion, based on World Bank analysis of the funding requirements to meet this goal in low-income countries, but which included only the salaries of teachers.

Some progress
Donors have reached out to support the training, recruitment and retention of teachers and health workers with debt cancellation, sector budget support, and general budget support.

Other sector-specific aid has also been successful. The 'Education for All Fast Track Initiative', in terms of which developing countries promise to draw up realistic, long-term education-sector plans and increase domestic investment in education, is one example. Public expenditure on education as a proportion of government expenditure has increased in 70 countries, the Oxfam paper reported.

Debt cancellation has also resulted in more funds being channelled into health and education. "Immediate increases have been seen in Benin, Burkina Faso, Madagascar, Malawi, Mozambique, Tanzania, Uganda and Zambia. Under a separate debt-reduction agreement, Nigeria is also training thousands of new teachers," said Noel.

Sector-wide approaches (SWAp) in health and education were often the precursor to contracts between donors and governments that led to the 'Education for All Fast Track Initiative', because SWAps allowed donors to earmark aid money for certain sectors, such as health and education.
"This is a useful mechanism in instances where government corruption or lack of transparency subverts national debate on the proportion of budget that should be allocated to social spending," Noel commented.

In Malawi, the health SWAp has specifically targeted salaries in an attempt to provide a dignified wage in a country where more than 100 nurses emigrate each year, and only nine percent of health facilities have adequate staff to provide the minimum package of health services, Oxfam said. The results have been dramatic: the monthly salaries of senior physicians have risen from $243 to $1,600.

GBS
GBS constitutes a very small proportion of overall aid: based on disbursements by Organisation for Economic Co-operation and Development (OECD) donors, in 2004 it accounted for just three percent.

"There is very little research done on GBS, but the potential is tremendous," said Zulu, who has written a paper proposing more GBS for Zambia.

The European Commission (EC), the UK and the Netherlands are the major proponents of GBS, with the EC starting in 1995, one of the earliest advocates.

Noel recommended that donors increase budget-support aid to 25 percent of bilateral aid funding, and raise core funding for the health and education sectors in countries where budget support was inappropriate; commitments should be for at least six years, with steps taken to minimise risk associated with budgetary aid.

"Budget-support donors could insure themselves against disbursement delays caused by donor bottlenecks, in order to maintain 100 percent disbursement where recipients have the ability to absorb the aid," he suggested.

However, Oxfam said full debt cancellation was still needed in 20 countries.