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					16th GAVI Board meeting -- Financing of Immunization Services in Malawi                                   Doc 21


1.         Introduction

Malawi is one of the poorest countries in the world, with a per capita income of
US$170 in 2000.1 Over the last decade, it has ranked among the bottom fifteen
countries on the Human Development Index (HDI) rank, with an average of 0.350.
Poverty is “widespread, deep and severe”2 - in 1998, the last year for which data is
available, up to 65% of the population was economically categorized as poor. Thirty
percent of the population was further classified as “ultra poor”, or lacking the basic
necessities for survival.

Malawi’s economy is largely dependent on the agriculture sector, which contributes
approximately 40% of gross domestic product (GDP). The structure of the economy
makes it highly vulnerable to external shocks, such as adverse climatic conditions
and worsening terms of trade for cash crops, particularly for tobacco the major
foreign exchange earner.

Consequently, the economy usually registers low annual growth rates below 6%,
which is the recommended minimum required to deliver widespread welfare gains to
the population. Coupled with the slow growth is a huge external debt burden, which
hovers around 150% of GDP. This has a negative impact on the discretionary
government expenditure levels to priority sectors.

On the domestic scene, government budget also operates in deficit. For instance,
only 55% of planned total expenditure of MWK118.8 billion (about US$1 billion) for
FY 2005/6 is to be financed from locally generated revenue; the shortfall of 45% will
come from grants and domestic borrowing. It is consensually acknowledged that for
some time, government will continue to rely on grants and domestic borrowing as a
means for bridging the budget deficit. This is in view of the economy’s low tax base,
which is further dwindled by reducing trade tariffs in keeping with international trade
harmonization protocols. However, reliance on foreign sources of financing, such as
grants has proved to be risky as there is a lot of uncertainty on both the levels and
timing of inflows. Disbursements may also be tied to fulfillment of certain
conditionalities, ranging from meeting macroeconomic targets and governance
issues. Where the funds are not forthcoming, government resorts to domestic
borrowing. This eventually translates into budget cuts for government departments,
as domestic borrowing usually attracts high interest rates.

On a positive note, Malawi is on track with the HIPC initiative for which it qualified a
few years ago. The interim qualification for HIPC has resulted in a considerable
reduction in annual debt service requirements, resources of which are channeled to
priority poverty expenditures, in various sectors including health. This has translated
into an increased budgetary allocation to the Ministry of Health, which stood at

    2000 Economist Intelligence Unit report
    Malawi Poverty Reduction Strategy Paper

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12.8% of overall government budget in 2002/03, and rose to 15% of total planned
government expenditure in 2005/06.

The Ministry of Health (MOH) provides a range of health services to 60% of the
nation. Christian Hospital Association of Malawi (CHAM) provides 37%, whilst private
institutions provide 3% of the health care services. All these institutions provide
Expanded Program of Immunization (EPI) services.

2.       Expanded Programme on Immunisation

The EPI was initiated in 1976 as a pilot Program with support from the World Health
Organization (WHO) and United Nations Children’s Fund (UNICEF). The Program
became fully operational in 1979 and currently provides measles, DPT-HepB+Hib,
Polio and BCG vaccinations to children under the age of one year and tetanus toxoid
vaccine to pregnant women and women of child bearing age countrywide.

In January 2002, Malawi introduced Hepatitis B and Haemophilus influenzae type b
(Hib) into its routine immunization Program, presently in a pentavalent formulation
(DPT-HepB+Hib) with support from the Global Alliance for Vaccines and
Immunizations (GAVI). In addition, autodisable syringes (ADs) and safety boxes
were introduced at the same time for all antigens, in accordance with the 1999
WHO/UNICEF/UNFPA policy on safe injections. A Hib surveillance sentinel site has
been established at Queen Elizabeth Central Hospital in Blantyre. There are plans to
scale to the Northern and Central regions so that data generated should be
extrapolated nationally. A financial sustainability Plan was prepared in 2003 and
approved by GAVI board in 2005.

Malawi attained Universal Childhood Immunization (UCI) goal in 1989, immunization
coverage for all antigens has since been maintained at > 80% (see Fig 1 below).
Immunization services are presently delivered through 3,400 static as well as out-
reach clinics nationwide.

The decline in immunization coverage in 2000 is attributed to various factors.
Notably, there was global shortage of Polio, BCG and DPT vaccines due to
manufacturers’ problems between 1999 and 2000. Immunization sessions at
outreach clinics, which provide 80% of the immunization services, were cancelled
because of transport and cold chain problems. The immunization coverage decline in
2002 is attributed to under reporting due to policy changes in the Health Information
Management System (HIMS).

2.2      Goal and Objective
The goal of the Expanded Programme of Immunization is to reduce infant morbidity
and mortality rates due to childhood vaccine preventable diseases by making
immunizations readily available to all targets. The overall objective is to vaccinate at
least 95% of infants against childhood immunization preventable diseases before
they attain 12 months of age and vaccinate at least 80% percent of pregnant and
women of child bearing age with doses of tetanus toxoid vaccine.

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Fig 1. Immunization Coverage (%), Malawi, 1995-2004.

                 1995    1996   1997     1998     1999     2000     2001             2002               2003          2004

                                OPV        Measles          DPT             BCG                        TT2

2.3      Strategies

    •    Strengthening EPI service delivery through provision of vaccines, cold chain
         equipment and related supplies to all static and out-reach clinics in Malawi.
    •    Building EPI capacity among health workers through provision of training and
         job aids.
    •    Strengthening supportive monitoring, evaluation, disease surveillance and
         feedback of EPI services at all levels of service delivery in Malawi.
    •    Mobilizing communities and creating awareness for increased utilization of
         EPI services including importance of completing the immunization schedule
         as detailed in the Table below

2.4      Achievements

The progress made in Malawi with
regards to the reduction of vaccine           Fig 2. Reported and Confirmed Measles
preventable illnesses is commendable.           cases by year, 1995-2004, Malawi.
The      Expanded       Programme       on
                                              12,000                        10,80010,845
Immunization has generally achieved
coverage of over 80 % for all antigens. As
a result, there has been a dramatic
reduction of vaccine preventable diseases                           4,218
including the virtual elimination of Polio.    4,000

No confirmed case of Polio has been            2,000
                                                                                                   2    1    0   93    167
reported since 1992 and the country has            0
                                                     1995 1997  1999  2001  2003
significantly improved the surveillance
system, making Malawi eligible to be
certified as “polio-free” country (since it
meets the WHO criteria). Neonatal tetanus has been eliminated according to
WHO/UNICEF Lot Quality Assurance survey in 2002. Malawi is in the phase of
measles elimination status as shown in Fig 2.

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2.5      Program Support
Immunization services are integrated within the preventive health services and
funded by the government national budget. It is, however, noteworthy that EPI is
capital intensive and is thus heavily assisted by collaborating partners and donors for
procurement of logistics, cold chain supplies and vaccines. The partners and donors
include UNICEF, WHO, KFW, DFID, JICA, and Rotary International among many
others, and are coordinated through an Inter-Agency Coordination Committee
chaired the MOH.

Currently GAVI is providing pentavalent vaccine while the MOH through SWAp will
provide all the traditional vaccines and related logistics.

3.       Health Sector Reforms

In 1999, the Ministry of Health formally embarked on health sector reforms and
outlined its medium-term strategic thinking in the five-year National Health Plan.
Among other reforms, the Ministry decided to move towards a Sector-wide Approach
and define an Essential Health Package (EHP). From this, and out of the MPRSP
process in 2001, the definition and implementation of an Essential Health Package is
now seen as the core business for the health sector, and the Ministry in particular.

The EHP reflects the realization that the health sector has historically attempted to
provide a very broad range of services. Given finite resources, this has resulted in
implicit rationing: lack of access for the rural poor, drug stock-outs in hospitals,
shortage of human resources, dilapidated buildings and facilities, and so forth.

The EHP marks a shift in strategic thinking by explicitly rationing the range of health
services to be provided by public funds - to those interventions that are proven to be
cost effective and that tackle the morbidity and mortality burden of the majority of
Malawians, particularly the rural poor. In explicitly rationing the range of services that
are provided, access should be significantly boosted with the EHP eventually
available free-of-charge to all Malawians, wherever they live. Explicit rationing also
helps the provision of EHP services at a high level of competence and quality.

The EHP will be implemented through a much expanded community level (with one
health worker per 1000 of the national population), in all Health Centres and District
Hospitals. Services in the EHP include preventive, promotive and curative. The EHP
has been costed at US$17.5 per capita.

In order to fill the resource gap this represents vis-à-vis current funding levels, and in
order to promote overall efficiency in health sector spending, the Ministry and its
partners have embarked on a Sector Wide Approach (SWAp). The EHP
implementation plan will provide a joint programme of work for the Ministry and its
partners, and that joint management, financial and monitoring systems will allow a
much greater volume of resources to be spent efficiently and transparently.

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The SWAp programme of work, which runs from year 2004 to 2010, is divided into
six programmes or priority areas, namely:

     •   Human Resources,
     •   Pharmaceutical and Medical Supplies,
     •   Essential Basic Equipment,
     •   Infrastructure (Health Facilities Development),
     •   Routine Operations at Service Delivery Level, and
     •   Central Institutions, Policy and Systems Development.

4.       Programme Challenges

It has been illustrated already that the EPI is among the successful programmes in
the country. The programme enjoys support from various partners besides the
government in its operations, including GAVI. There are however a number of
challenges facing the programme, which pose a threat to its success in the future.
The following are the two major challenges that require serious consideration:

4.1      High Cost of Vaccine
The price of the new pentavalent vaccine is very high. In Malawi, the new vaccine
accounts for 92% of total cost of vaccine requirements for children under the age of
one year. As such, it is not possible for the Malawi Government alone to fully finance
the immunization programme, given the unsatisfactory performance of the economy.

4.2      Competing Priorities

A six year SWAp programme of work has been developed and adopted for
implementation by the Ministry of Health and its partners in the sector. The POW is
divided into six priority areas as already described above. The Malawi Government is
making efforts to mobilize resources for the implementation of the POW. However, a
financing gap still exists, as commitments from various financing sources are not yet
up to the full cost of implementing the six year programme. In the light of this
financing gap, there is likelihood of further prioritization and reallocation of resources
among the six components of the POW. This may, in the worst case, result in a shift
of resources from the Routine Operations component, of which immunization is part,
to other components of the POW.

Malawi also experiences numerous public health problems besides immunization
preventable diseases. Other problems, such as malaria and HIV/AIDS equally attract
the attention of government and cooperating partners in funding consideration. This
may also result in the shift of resources away from EPI, to the other public health
problems as the magnitude of those health problems is perceived to be on the

Furthermore, Malawi like other developing countries is a signatory to the Declaration
that commits governments towards achieving the Millennium Development Goals
(MDGs). Towards that end, Government is likely to balance its investments in a

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couple of both social and economic sectors. As such, increases in resources to
sectors are likely to be marginal as achievement of MDGs involves investing in a
couple of sectors, which clearly compete among themselves for resources.

5. Way Forward
Malawi Government is committed to continue with the provision of pentavalent
vaccine to all eligible children. To this end, the Government is further committed to
an annual contribution of 20 percent of the total cost of bundled pentavalent vaccine
beginning 2006. The national health delivery systems will be strengthened to ensure
high national immunization coverage. Therefore, continued financial support from
partners is still required in order to sustain the provision of the bundled pentavalent
vaccine and for strengthening of the health delivery systems.

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