Despite significant medical advances, Africa is still being plagued by some of the world’s worst diseases; one of them,malaria. The World Health Organisation (WHO) reports that in 2010 there were 216 million cases of malaria worldwide, and estimates 655,000 fatalities. A staggering 91% of those fatalities occurred in Africa.⁽²⁾ The WHO instigated the Roll Back Malaria (RBM) program in 1998 to address the issue. RBM is comprised of more than 500 partners, including malaria endemic countries, their bilateral and multilateral development partners, the private sector, nongovernmental and community-based organisations, foundations, and research and academic institutions.⁽³⁾ Multiple initiatives have been implemented in various affected states, with varying degrees of success. In an effort to bring prevention methods closer to the people in need, with an affordable financing structure, some African nations, such as Tanzania and Ghana, have entered Public-Private Partnerships designed to provide insecticide-treated mosquito nets (ITNs) to the population.

The National Malaria Control Program in Tanzania

Tanzania’s National Malaria Control Program (NMCP) includes an ITN subsidy scheme. The scheme is administered by the ‘NATNETS’ partnership, which is made up of numerous governmental, NGO, private non-profit, private for-profit and faith-based organisations, that contribute in specific roles to the project, such as:

• Donor partners: Global Fund, PMI, World Bank, SDC, Dutch Embassy, UNICEF, DFID, Malaria NoMore;
• Governmental partners: Tanzania Ministry of Health& Social Welfare (National Malaria Control Program) Local Government (Regional andDistrict HealthManagementTeams);
• Contracting partners: Swiss Tropical and Public Health Institute, MEDA Economic Development Associates, PSI, World Vision Tanzania, Ifakara Health Institute, London School of Hygiene and Tropical Medicine, KPMG, JHU-Centre forCommunication Programs, COMMIT, Tanzania Red Cross;
• Private sector partners: A-Z Textiles, Sunflag, TMTL, Moshi Textile, more than 250 wholesalers, over 6,900 retailers, and also 3 insecticide manufacturers.

A voucher scheme was introduced in 2004, issuing subsidised nets to high-risk groups: pregnant women and children under 5 (U5s). In 2008, the Tanzanian Ministry of Health & Social Welfare hatched a campaign to deliver free nets to every U5. Nine donors contributed to the national campaign that purchased and distributed 9 million nets at an average cost of US$7.07, including all campaign-associated activities. Pregnant women and mothers with U5s obtained the vouchers from public health facilities. Vouchers are redeemed in a shop in the catchment area by providing a ‘top-up’ (varying from US$0.75 – 1.25) depending on the size of the net.⁽⁴⁾ The campaign covered all eight zones of mainland Tanzania.⁽⁵⁾ The program has been remarkably successful: by 2010, ITN ownership had increased from 45.7% to 63.4%, and ITN use among U5s increased from 28.8% to 64.1%.⁽⁶⁾

This scheme did not proceed without challenges. Paralleling problems in Nigeria, in 2002 Tanzania’s Ministry of Finance reintroduced a VAT on the materials used to produce mosquito nets, leading to a 10-20% increase in production cost. Traditionally such a cost is passed on to the consumer. Members of the partnership from all sectors worked to overcome this hurdle, and successfully persuaded the Ministry to impose a zero-rating for VAT on nets and remove customs duties on the imports of production materials.⁽⁷⁾

Other challenges involved rifts between the government and private parties. Private investors reacted negatively to a governmental free-net issue in response to a charitable donation. This led some private sector partners to complain to the RBM Secretariat, arguing that the free-issue nets were diluting the market. The Ministry of Health and RBM Secretariat responded that the free-issue was a one-off campaign and that obligations under the PPP would proceed unaffected.⁽⁸⁾

The ITN Subsidy Scheme in Ghana

Until 2010 Ghana had a similar voucher system in which the public sector was responsible for the issue and the private sector for the distribution and redemption. Ghana’s NMCP abandoned the PPP in favour of mass free distribution (an expected 10 million long-life nets) using Global Fund and President’s Malaria Initiative finance.⁽⁹⁾ The voucher scheme was tested in several regions before its cancellation. An analysis of the scheme’s abandonment is revelatory of key problems facing African healthcare PPPs.

In a one-year pilot, 25,926 vouchers were issued to eligible women from antenatal clinics (ANC) in the Volta Region, which equates to 50.7% of the 51,658 ANC attendees. Of the vouchers issued, 66.7% were redeemed by distributors (Transcol Ltd, AgriMat and NetCo Rockville) back to the management agent (Exp Momentum). Difficulties faced by the scheme were caused by issues both within and extraneous to the program: pre-existing ownership of nets, competing ITN delivery strategies and competition for the limited number of available nets from major urban centres in other regions. ⁽¹⁰⁾

Other problems included health care workers imposing eligibility criteria (not issuing vouchers if a woman was unable to pay the top-up on redemption), non-availability of ITNs in retail outlets, and voucher stock-outs in ANCs.⁽¹¹⁾ These are manifestations of compounding structural problems in the relationships between the parties to the PPP and the individuals responsible for executing its aims. This can be explained thus:

• Public health staff did not issue vouchers where they assumed none were available in the catchment area because;
• Private retailers were often short of ITNs because;
• Private distributors had limited financial capacity and could not have capital tied up for long periods. ITNs were given to retailers on credit and therefore distributors would only risk small stock levels in the majority of outlets. This problem was compounded in hard-to-reach areas where stock could sit on the shelves for extended periods.

Some clinics continued to sell the ITNs that they had acquired prior to the scheme commencing (cutting the retailers out of the partnership) directly.⁽¹²⁾

Lessons for African PPPs in healthcare

Comprehensive strategic planning.Inadequate strategic planning dooms projects to fail. This is particularly so when they are executed on a national level. In the Ghanaian case, it is fortunate that these problems were exposed in a trial period. In particular, extensive due diligence should be undertaken to assess the capacity of distributors to handle demand and the extent of their credit to evaluate whether they will be able to ride out periods of poor sales without affecting supply. Further, simple measures such as monthly reconciliation of the number of available ITNs in a catchment area with the number of vouchers on hand in ANCs would avoid purchaser disappointment and ensure maximum benefit for retailers.

The difficulty of maintaining a balance between ‘catch-up’ (mass free distribution) and ‘keep-up’ (voucher scheme) programs is apparent in both examples. Private participation requires a ‘keep-up’ scheme, which is at odds with free distribution. However, ‘catch-up’ is imperative in preventing malaria amongst those who cannot afford ITNs, or those in hard-to-reach areas. Protesting too loudly against ‘catch-up’ would have negative PR consequences for investors. This is a classic rift between public and private interests, and should have been addressed prior to Tanzania’s one-off mass free distribution. The two systems are not necessarily inconsistent. There may be room for private sector involvement in a keep-up/catch-up amalgam, and this should be determined early on in projects to avoid subsequent conflict between key stakeholders.

Clear and open communication channels. At the strategic level, ongoing and comprehensive cross-partnership consultation is imperative. This is particularly so where changes in government policy negatively affect private earnings potential (e.g. the Tanzanian provision of free nets). At the execution level, personnel must be educated, up-skilled if necessary, and clearly understand their role in the project prior to its commencement. This will always be a problem in national projects with multiple dispensary locations, but there are long-term benefits to be gained from appropriate investment in training.

Community consultation. A top-down communication structure is a necessary characteristic of a PPP if key stakeholders are to properly communicate and solidify their positions prior to project implementation. However, where harnessing the purchasing power of the local community is imperative to a project’s success, the community is a key stakeholder and extensive consultation is necessary to ensure the correct needs are met. Had proper due diligence and consultation been carried out in the Ghanaian case, prior ownership of nets would have been apparent and the project could have addressed this need. Many of those nets were not insecticide treated, and treatment kits (which are available in Ghana) would have provided further opportunities to retailers.

Change in government policy. Government policy changes are inevitable, and a poorly managed example has been discussed in relation to the Lekki toll project. The Tanzanian case provides an excellent example of partners from multiple sectors communicating and applying political pressure to effect change that positively benefits the project. The removal of VAT on ITNs and imported materials is a significant achievement and should be emulated in subsequent projects facing similar issues.

Despite these challenges, the percentage of households in sub-Saharan Africa with ITNs has risen from 3% in 2000 to 50% in 2011. PPPs for the provision of ITNs are a viable means of working towards a solution to the malaria epidemic. African governments have inadequate resources to self-fund such projects, and current international commitments total only 20% of what is required.⁽¹³⁾ There is an opportunity for the private sector to fill the significant lacunae in anti-malarial funding.

The above points highlight the key risks and opportunities that arise when investing in African healthcare and infrastructure through PPP models. While not discussed here, it is important to note that criticisms of other projects have emphasisedareas such as corruption, neo-patrimonialism, lack of transparency in concession awards, and the inadequacy of African legal frameworks to properly govern PPPs. It is also worth noting that a greater spread of risk between partners and debt and equity finance in such projects is a possible means of mitigating potential losses in the event of project collapse. On this matter, more information is available from the Public-Private Infrastructure Advisory Facility.

NOTES

(1) Contact Hugh Boylan through CAI’s Industry and Business unit (industry.business@consultancyafrica.com).
(2) World Health Organisation, World Malaria Report, 2011.
(3) Roll Back Malaria website, http://www.rbm.who.int.
(4) Njauet al., ‘Implementation of an insecticide-treated net subsidy scheme under a public-private partnership for malaria control in Tanzania – challenges in implementation’, Malaria Journal, 2009.
(5) Bonner et al., ‘Design, implementation and evaluation of a national campaign to distribute nine million free LLINs to children under five years of age in Tanzania’, Malaria Journal, 2011.
(6) Ibid. These statistics have significant regional variations.
(7) Njauet al., Ibid.
(8) Ibid.
(9) See USAID, President’s Malaria Initiative, FY2009, Ghana.
(10) Kwekuet al.,Public-private delivery of insecticide-treated nets: a voucher scheme in Volta Region, Ghana, Malaria Journal, 2007, 6:14.
(11) Kewkuet al., Ibid.
(12) Ibid.
(13) Killeen et al., ‘Cost-sharing strategies combining targeted public subsidies with private-sector delivery achieve high bednet coverage and reduced malaria transmission in Kilombero Valley, southern Tanzania’, BMC Infectious Diseases, 2007.
 

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Written by Hugh Boylan ⁽¹⁾