Health sector planning and budgeting

Why it matters

Kenya, like many developing countries, suffers from a persistent misalignment between policy, planning and budgeting, resulting in a failure of the government to achieve public sector targets and respond to changing population needs. To address this misalignment, the government incorporated the World Bank’s Medium Term Expenditure Framework (MTEF) into its national planning and the Ministry of Health has used Annual Operation Plans (AOP) to facilitate sector planning and budgeting alongside the MTEF. 

Despite these well-defined processes for planning and involving stakeholders in the Ministry of Health policies and guidelines, the Kenyan health sector continues to suffer from misalignment between sector policies, priority setting and budgeting.

What we did

Researchers at KEMRI-WT assessed the degree to which the health sector AOP process in Kenya has achieved alignment between planning and budgeting using document reviews, participant observation and key informant interviews.

After health sector devolution in 2013, researchers also examined the planning, budgeting and priority setting processes at the County level. This work also builds on a related study, examining priority setting at the hospital level.

What we found

National level

  • Misalignment in the planning and budgeting process.
    The Kenyan health sector is far from achieving planning and budgeting alignment several years after the adoption of MTEF and AOP tools. In Fiscal Year 2012/13 the AOP process was significantly delayed and some key activities, such as the review of the previous year’s plan to inform priority setting, were not done. As a result the planning process became misaligned with the government-wide MTEF process. 

    Misalignment is caused by:
    • Lack of stewardship of the AOP process
    • Institutionalised separation between health sector planning and the MTEF process
    • Rapidly changing organisational and planning environment in the health sector

County level

  • Similar to the national level, the planning and budgeting process of county departments of health are not aligned. 
    Misalignment occurs frequently in the health sector because different actors drive planning and budgeting: a Chief Officer leads the budgeting process whilst a County Director leads the planning process. Lack of alignment weakens the effectiveness of planning processes because it is likely that plans, which should reflect county priorities, are not backed up by budgets and are therefore unlikely to be implemented. 
  • County health priorities are significantly influenced by political and donor interests 
    Kenya’s devolution has resulted in the establishment of a local political structure that has direct influence on healthcare priority-setting decisions. The use of informal considerations in decision-making rather than formal criteria such as essential services or need, could lead to perceptions of unfairness. Without adequate safeguards, the influence of political interests could result in inequitable allocations, for example, by prioritizing sub-county regions with the most vocal or powerful political representatives.  

Implications for policy and practice

  1. There is a need for institutional integration of the planning and budgeting processes into a common cycle and framework and with common reporting lines.
  2. It is also important that there is improved data and local-level input to inform appropriate and realistic target setting. This requires ensuring that all stakeholders are aware of the importance of annual work plans and their role in the budgeting process 

 What  we changed 

Researchers have been working with the Ministry of Health to develop and implement new planning tools that aim to improve planning and budgeting at the county levels.