Kenya banks on local fund raising to cushion anti-Aids fight against donor exit shocks

Corporate News

Ms Njoki Otieno (left) says ARVs have tremendously improved the quality of her life. Ms Regina Ombam, head of Strategy Development at NACC. PHOTOS | SARAH OOKO  

By SARAH OOKO

In Summary

• Currently, the biggest threat to sustainability efforts is the country’s over-reliance on external resources in the fight against HIV.
• About 70 per cent of money used to fund HIV interventions comes from donors.
• Kenya’s HIV response budget is expected to grow from the current Sh97 billion to about Sh145 billion ($1 billion to $ 1.5 billion) over the next four years.

Njoki Otieno is a warm and cheerful woman. Her eyes glow with joy as she talks about her husband and two children.

“I love them so much. They have given me the inspiration to live and do what I do today,” says the 40-year-old who sensitises communities in Nairobi’s slums on HIV/Aids whilst supporting those already infected with the disease.

But her now seemingly normal life has not always been rosy. Ms Otieno was diagnosed with HIV in 2001 and subsequently suffered from a myriad of opportunistic infections, including tuberculosis due to low immunity.

“My health was deteriorating. I was sickly and kept visiting hospitals every now and then,” she says.

She finally got a reprieve in 2003 when she began taking anti-retroviral drugs (ARVs) that fight HIV and prevent its rapid multiplication.

Thanks to the drugs and the Prevention of Mother to Child Transmission (PMTCT) programme rolled out in public hospitals, Ms Otieno was also able to conceive and give birth to a healthy HIV-negative baby.

“I thank God that ARVs are now offered free of charge to all Kenyans. They are helping us lead normal lives just as other Kenyan,” she said during an interview with the Business Daily.

Ms Otieno is just one of the over half a million (760,000) HIV positive adults whose health has improved and life prolonged as a result of accessing and using ARVs, according to statistics from the 2014 Kenya HIV Estimates Report.

The drugs — which were once a preserve of the rich due to high costs — are now accessible at no cost in all public health facilities. Their use, coupled with other key interventions aimed at fighting HIV - such as voluntary counselling and testing, condom use and PMTCT- has contributed to the reduction of the HIV burden in Kenya.

Indeed, the most current Kenya Aids Indicator Survey (2012) shows that HIV prevalence in the country is now 5.6 per cent, down from 7.2 per cent in 2007. This means that Kenya is having fewer and fewer orphans as a result of the HIV scourge.

Moreover, HIV positive adults are now able to contribute effectively to Kenya’s economic growth irrespective of their status.

But as health officials celebrate these successes, they are also looking for ways to sustain these gains. Currently, the biggest threat to sustainability efforts is the country’s over-reliance on external resources in the fight against HIV. About 70 per cent of money used to fund HIV interventions comes from donors.

Even so, Kenya still suffers from a significant HIV financing gap of approximately Sh17.9 billion ($185 million). This gap is estimated to widen over the next 10 to 15 years as traditional donors grapple with global economic pressures or shift priorities to fund emerging health problems such as non-communicable diseases (NCDs) like cancer, hypertension and diabetes.

As this happens, Kenya’s HIV response budget is expected to grow from the current Sh97 billion to about Sh145 billion ($1 billion to $ 1.5 billion) over the next four years.

“We pondered over this financial hurdle and realised we had to act fast to prevent a crisis in future,” Ms Regina Ombam, head of strategy development at the National Aids Control Council (NACC) says during an interview with the Business Daily.

She says that finding a solution to this problem became even more urgent after Kenya revised its HIV treatment guidelines last year, which among other things proposed that all HIV positive Kenyans begin treatment (taking ARVs) at a CD4 cell count of 500 up from the previous 350.

This followed evidence from the World Health Organisation (WHO) showing that early treatment prolongs the lives of HIV infected people and reduces their chances of transmitting the disease to others. The new guidelines put an additional 200,000 HIV infected people on treatment. This initiative is currently heavily financed by donors.

“Now we have more Kenyans on ARVs. They will be taking the drugs for life. So we need to have our own local resources to be safe, even if donor funding dwindles,” explains Ms Ombam, who was recently nominated by international Aids agencies to join the global Think-Tank on Aids and Economics.

To address the funding problem, NACC partnered with Excelsior Group to establish Kenya’s first HIV/Aids Sustainable Financing Strategy (HSFS). Ms Ombam was instrumental in this initiative, which gained her global recognition. The strategy will provide a road map for establishing an Aids Trust Fund.

Michael Walli, Health Economics expert at Excelsior Group, notes that the fund is expected to raise the current domestic financing for HIV from 30 per cent to over 85 per cent by 2024.

“It will begin by funding HIV interventions then later move to NCDs as the Aids burden goes down,” he says.

The trust fund is expected to ultimately facilitate Kenya’s drive towards universal healthcare coverage. Based on the strategy, the NACC team has already identified multiple funding sources that will generate money for the Aids Trust Fund.

They propose that government apportions two per cent of its ordinary revenue to the fund, which will be separate from its overall normal budgetary allocation to healthcare.

This is expected to increase the government’s HIV finances to Sh19.4 billion ($200 million) up from the current Sh9.7 billion ($100 million).

Raise funds

“For the fund to work, part of its cash needs to come from a reliable and sustainable source. So the government was the best choice,” explains Mr Walli, who was also part of the team that developed the strategy.

NACC also plans to raise funds from the private sector through innovative approaches such as establishing development impact bonds and health bonds.

“This will enable companies to contribute to the fund and gain a certain percentage of interest after a specified period of time,” states Walli.

The funds raised through the bonds will also go toward construction of health centres and purchasing of medical supplies like HIV drugs. Other targeted sources of cash are direct financial contributions, Aids lottery and a portion of interest from dormant funds.

The NACC team is already working with PricewaterhouseCoopers (PwC) to reach out to private sector investors. In collaboration with the Global Fund, the Aids council also seeks to explore the Debt-for-health Swap approach.