HEALTH POLICY AND PLANNING; 14(3): 243–253
© Oxford University Press 1999
Managing external resources in Mozambique: building new aid
relationships on shifting sands?
ENRICO PAVIGNANI1 AND JOAQUIM RAMALHO DURÃO2
1Independent Consultant and 2Ministry of Health, Maputo, Mozambique
The Mozambican health sector is recovering from war and general disruption. This massive endeavour is
supported by several donor agencies, which contribute a substantial proportion of national health expenditure. The final years of the war and the transition period have seen an extreme fragmentation of the health
sector. To correct it, serious efforts to coordinate the plethora of aid agencies and related external inputs
have taken place.
This paper reviews the actors present on the Mozambican health scene and their interactions. The existing
aid management mechanisms are described and their effectiveness appraised. The factors affecting both the
process and its outcomes are analyzed.
Given the prevailing complexity, this research presents a number of tentative conclusions. First, the evidence
suggests that coordination efforts have paid off. However, progress has required intense and sustained work.
Incremental approaches, where donor demands are progressively raised as the system is strengthened, have
been crucial. The initiative has come mainly from donors, with the Ministry of Health receptive and reactive.
When the recipient administration has been able to take advantage of donor initiatives, success has ensued.
Individual people have been crucial in shaping the process. Critical factors contributing to positive developments on both sides of the donor-recipient relationship have been frankness, risk-taking and a long-term perspective.
Introduction
This study is based on a review of documents and interviews
with key government and donor informants carried out in
1997.1 Preliminary results were submitted to all respondents
and their comments have substantially contributed to the
analysis. This paper is also based on the experience of the
authors, who have worked in the health field for many years,
and were known to the majority of the respondents. The findings have not only been influenced by the authors’ views but
also by the position of informants toward coordination. Those
committed to it have provided substantial contributions, while
the sceptical were not available for interview, or were
restrained in their answers. These shortcomings notwithstanding, the research met with broad support and fuelled a stimulating discussion among most of the players. This suggests that
coordination is a major issue within the health sector.
Evolution of the health sector
Since the 1970s, Mozambique has gone through an incessant
process of change. The choices made at independence have
been challenged and reversed, first by the economic decline,
later by the apartheid aggression, culminating in protracted
civil war, and eventually by structural adjustment, within the
context of world-wide political changes. Mozambique has
moved from a socialist state to a market oriented economy,
where the elected administration has a much reduced role
(Hanlon, 1997). During this transition, a dramatic increase in
aid dependence has taken place.
The health sector, visible since the 1970s for its radical stance
and progressive policies, has been deeply affected by change
(Noormohamed & Segall, 1992). A simplified chronology of
the health sector is presented in Table 1. In 1991–92, as perspectives for peace were gaining ground, the Ministry of
Health (MoH) undertook a comprehensive policy review
(Noormohamed & Segall, 1992). Efforts to analyze and
coordinate external aid began (UNDP, 1996). Health service
expansion commenced after the peace agreement in 1992 and
service utilization and coverage are gradually increasing.
Nevertheless, by 1997, only an estimated 40% of the population had access to most basic services.
The National Health Service (NHS) receives a substantial
contribution from the international community, estimated at
50% of total recurrent expenditure and more than 90% of the
capital expenditure. The state budget increased more than
20% in real terms between 1989 and 1996. Cost-recovery is
still negligible, outside large hospitals. Annual government
and donor expenditure in the health sector has stabilized at
about US$ 100 million per year. The formal, for-profit private
sector is small and limited to cities; missions and charities play
a marginal role.
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Enrico Pavignani and Joaquim R Durão
Table 1. A simplified chronology of the health sector in Mozambique
Period
General
Health-related
1975
Independence
Nationalization of health services
1975–1982
Central planning
Adoption of Primary Health Care (PHC) and expansion of
coverage and outputs
1982–1985
Economic crisis and escalation of the civil war
The NHS becomes a military target; its coverage contracts.
1985–1992
Emergency: war, famine, epidemics, and drought.
Structural adjustment. Donor dependence: aid
agencies and NGOs take the lead.
Domestic financing reduced. Fragmentation of health services
along vertical lines. Proliferation of emergency-oriented projects.
MoH prepares plans for reconstruction.
1992
Peace Agreement
1992–1994
Transitional period; progressive unification of the
country under the same administration.
1994
Democratic elections
1994–1997
Progressive normalization, economic recovery
under free-market principles. Decentralization is
endorsed by the Government and slowly introduced.
Key actors and context
The Ministry of Health
The NHS has three levels of management: Ministry of Health,
Provincial Directorates of Health (PDH), and District Directorates of Health. The management system is structured topdown: resources (personnel, drugs, equipment and funds) are
allocated from one level to the level below. However, each
level enjoys considerable autonomy in using its own resources.
The managerial culture within the NHS is mainly reactive.
Decades of crisis have shaped the management style, which
can be likened to that of a sailor at the helm of a leaking boat,
crossing stormy seas. He is concerned with keeping the boat
afloat, and does not pay much attention to the choice of the
harbour, provided it is safe. Inadequate as this approach may
now appear, it has served superbly in the past, enabling the
system to endure considerable stress and uncertainty. Given
their previous experience, managers approach problems one
by one, as they come, and do not spend much energy in
formulating long-term visions. Further, the memory of the
central planning failures is still fresh, making managers sceptical of plans. The perennial scarcity of accurate information
has made managers reliant on experience, common sense and
intuition, rather than on hard data. The top-down structure of
the state administration and of the NHS inclines local officials
to follow central directives rather than taking initiative.
MoH officials are operational managers. Their first concern
is to deliver health services, at any cost. As health professionals and political appointees, they feel the pressure of
keeping services going. Many officials are part-time practitioners, which may explain the divide between them and
Rehabilitation of the health network starts. Health services
return to previously closed areas. Private practice reintroduced.
Ongoing reconstruction and expansion of the NHS. Elements of
deregulation emerge.
their donor counterparts, who do not face similar pressures.
The MoH manager’s working day is dominated by micro
decisions; attention to macro issues, and to future developments, is confined to spare time. Conversely, donor officials
are mainly expected to manage money, which, in turn, will
materialize in future outcomes. Donor officials are not
involved in health care provision; few of them are health professionals. Their perspective towards health services is more
distant, systemic, economy-oriented, and long term.
One of the most critical, of many, problems affecting the civil
service in Mozambique is the extremely low remuneration of
staff. Over the years, real wages have eroded. A civil service
reform, including a decompression of the salary scale, has
been announced several times without materializing. This
situation has led to the introduction of innumerable compensating measures. Some of these have been instituted across
the public sector, while others have been ingeniously introduced by civil servants trying to make a living despite their
risible salaries. These practices, sometimes dubbed as ‘corruption’ by external observers, can be argued to be survival
schemes arising out of necessity. Donor policies have ranged
from ignoring the issue, to blaming the practice while quietly
accepting it, to trying to find an acceptable solution in agreement with the Government of Mozambique (GoM).
The donor community
There is a large donor community in the health sector. Table
2 outlines the most influential agencies, the size of their commitments in 1997 and their major areas of work. Commitment
and disbursement rates oscillate greatly over the years, and
although total commitments may have surpassed US$100
million, actual disbursements have been much lower. Donor
Managing external resources in Mozambique
245
Table 2. Major agencies active in Mozambique
Agency
Turnover in
1997 (US$)
Main areas supported
Support channelled
through
Remarks
Canadian
Cooperation
4 million
Drugs
MoH
Tied aid and direct procurement
Danish
Cooperation
2 million
Large, comprehensive, long-term
support programme in Tete
Province. Drug purchasing at
national level.
Provincial Directorates
of Health and Finance
and MoH
Add 6 million of 1996 funds for drugs,
reprogrammed to 1997.
Dutch
Cooperation
7.5 million
Comprehensive, long-term
support programme in Nampula
Province. Drug purchasing and
Technical Assistance (TA) at
national level.
MoH (through pooling
arrangements), Nampula
Provincial Directorate
of Health and NGOs
The agency is considering (with other
like-minded donors) a future move
to budget support. Direct
procurement of kits of essential drugs.
European
Union (EU)
18 million
Large investment programme
in Zambézia Province. At national
level, the agency covers disease
control, training and provides
generic budget support to MPF.
Mainly MoH and
Zambézia Provincial
Directorate of Health
The largest funder of NGOs in the
past, the agency is increasingly relying
on MoH for implementation.
French
Cooperation
1 million
Disease control and
post-graduate training
Mainly MoH
Finnish
Cooperation
4.5 million
Large, comprehensive, long-term
support programme in Manica
Province
Provincial Directorates
of Health and Finance
The Manica Support Programme is
entering a new five-year cycle,
patterns of which have still to be
defined. A decrease in investment is
anticipated. Main focus will be
strengthening of management systems
and health care delivery.
Italian
Cooperation
3 million
Hospital equipment, maintenance,
TA, mental health. Support to
Sofala Province
MoH, PDH and NGOs
The largest bilateral donor during the
1980s, since then it has significantly
scaled down its presence.
Norwegian
Cooperation
4.5 million
Drugs, disease control, TA, PHC
MoH, through pooling
arrangements and
special programmes
Add 6.5 million for drugs imports,
pending from 1996 commitments. The
agency is very committed to
coordination. Discussions over future
joint budget support are under way
Spanish
Cooperation
3 million
PHC and TA
Mainly NGOs
Swiss
Cooperation
10 million
Drugs, TA, budget support,
management strengthening, PHC
MoH, through pooling
arrangements and special
programmes, and
Provincial Directorates
of Health and Finance
From 1992 to 1998 appointed by MoH
as focal donor. Very active in donor
coordination.
TA, human resources
development and AIDS control
MoH
Old programme expired in 1996. New
programme starting 1998 still under
discussion with MoH. No significant
financing in 1997. UNDP manages the
pooling arrangement for technical
assistance, financed by Holland,
Switzerland and Norway.
United Nations
Development
Programme
(UNDP)
United Nations
Population
Fund (UNFPA)
3.6 million
Reproductive health
MoH, NGOs, direct
imports
Regarded as the most successful UN
agency in the health sector
UNICEF
5.8 million
Mother and child health
Mainly MoH
The largest and most active
multilateral agency during the 1980s,
has since then taken a lower profile.
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Enrico Pavignani and Joaquim R Durão
Table 2. Continued
Agency
Turnover in
1997 (US$)
Main areas supported
Support channelled
through
Remarks
USAID
14.4 million
MCH, family planning, AIDS
control, management
strengthening in 3 provinces
Mainly NGOs and private
contractors; PHDs
A relative newcomer, its presence is
growing.
World Bank
20 million
Large, comprehensive recovery
programme 1996-1999
MoH + Health
Development Fund (incl.
NGOs) + World Food
Programme (WFP)
Soft loans. The World Food
Programme participates as
implementer of the Health
Development Fund.
World Health
Organization
(WHO)
0.5 million
Capacity building, training
abroad, disease control
MoH, some PHDs, and
direct management
In the past, it has de facto abdicated
its mandate of leading and
coordinating the health sector in
Mozambique. Recently, the office is
recovering some credibility.
agencies vary considerably in the way they programme and
implement activities. Some agencies adopt different approaches in different countries. Incompatibility with rules
and regulations is often claimed by donor officials as the main
reason to resist coordinated action. Nevertheless, there is evidence that some agencies participate in certain schemes in
one country, while abstaining in another, supposedly blocked
by stringent rules. As some donor agencies are structured in
labyrinthine ways, rules and regulations can be invoked or
bypassed, according to convenience.
Despite the scarcity of conclusive figures, the health system’s
absorptive capacity of foreign aid is acknowledged to be poor.
Frequently, external resources remain unspent or are reprogrammed for the following year. This is due to the recipient’s
weak capacity as well as to the donors’ complex financing procedures and conditions, which render access to external
resources extremely difficult. Therefore, despite the absolute
underfinancing of the health sector, the prevailing situation
reflects an excess of aid and a competition among donors to
channel their funds through the most receptive parts of the
system. Funding sources are consequently chosen according to
their comparative accessibility. Requests are often summarily
formulated and submitted to many donors with the understanding that one or more agencies, under pressure to disburse
funds, will be found. When implementation difficulties arise,
the common strategy is to look for another source of financing,
rather than remove the existing hurdles. Officials are therefore
not motivated to develop thorough plans nor to honour commitments. Some donors fear that their demands for transparency and accountability will be ignored; if too demanding,
they risk being just bypassed for more lenient agencies.
Existing coordination mechanisms and evolution
over time
MoH coordination schemes
Within the MoH, the Cooperation Department (CD) of the
Planning Directorate has the formal mandate to coordinate,
and acts as the link between the MoH and the Ministry of
Foreign Affairs and Cooperation. Usually, negotiations concerning a new cooperation agreement begin with the CD,
which solicits an opinion from relevant MoH technical
departments. The CD approves the proposal, on the behalf of
the MoH.
For a number of reasons, the CD was widely considered to be
under-resourced and unable to play a significant role in
coordination. First, negotiations are usually bilateral,
between the MoH and agencies. Second, the most relevant
discussions take place within the technical departments,
where professionals come together and agree on the proposal
contents. Third, the CD functions mainly as a clearance body.
Proposals are developed elsewhere and submitted for formal
approval. Fourth, even though the initial negotiations may be
held at the CD, once the project is approved the Department
loses touch with it.
In 1989, with the start of the first World Bank (WB) loan, a
special implementation unit was created within the MoH
Planning Directorate. The unit, known as GACOPI, has since
then expanded its mandate to manage investment projects
financed from other sources and played a central coordinating role in the reconstruction exercise. The unit is regarded as
competent, if over-stretched, as it has assumed crucial tasks
from other MoH departments.
Since 1992, the MoH, with the support of ‘the focal donor’
(see below), has convened coordination meetings with the
participation of the major donor agencies. The MoH presented its policies, plans and implementation procedures, and
donors were asked to provide information about their activities at these meetings. While these general meetings were
considered effective at improving coordination, the attempt
to establish coordination sub-fora around particular issues
has been less successful. One reason might be that the
multiplication of coordinating venues has made attendance
too demanding. Also, the support provided by the focal donor
could not be replicated in each sub-forum. Finally, as sub-fora
were expected to lead to concrete action on specific issues,
they have more readily run into problems.
Managing external resources in Mozambique
Initially, general coordination meetings were frequent and
widely attended. Since 1996, the major coordination meeting
has been annual. Opinions about this evolution diverged.
Some respondents stated that most issues have been already
debated, making redundant frequent meetings. However,
while early coordination meetings focused on urgent or relatively easy issues, like rehabilitation or human resources,
more sensitive and problematic issues, such as cost-recovery,
corruption etc., have never been seriously addressed. Thus,
crucial issues have been segregated from the policy discussion
(Barker, 1996). There remained, therefore, great scope for
policy discussion at national level. Others argued that the
preparation work, usually carried out by the MoH and the
focal donor, was too burdensome for existing capacity. An
MoH official argued that participants lost interest in these
events, as the principles and plans endorsed at the meetings
were not backed by consistent and resolute action on the part
of the MoH. The intensity of the process may have exhausted
some participants, particularly those involved in the field for
many years. This argument was, however, difficult to sustain,
given evidence of the strengthening of coordination among
donors. It appeared that the most active agencies had moved
the process of aid coordination out of the Ministry.
Figure 1 gives a break-down of aid coordination mechanisms
over time.
1988
1989
1990
1991
1992
247
Inter-donor coordination schemes
In 1993 a donor-only coordination mechanism was established to discuss policy and implementation issues. Most
agencies participated in this forum. Opinions diverged in
relation to this scheme. Some MoH officials considered that
coordination events should always involve government representatives. Many donors thought that donors should discuss
among themselves before approaching the MoH. As the
group was large and heterogeneous, it remained more suitable for discussion than joint action.
Besides these official arrangements, a dense network of informal contacts played a decisive role with respect to aid coordination. Centred on the so-called like-minded donors (Nordic
countries, Holland, Canada and Switzerland), the network has
expanded to include Ireland and the World Bank. These agencies discussed issues on an ongoing basis so as to develop
common strategies. Other bilateral agencies, while not rejecting discussion, preferred to plan and act independently. The
different points of view of bilateral and ‘technical’ (mainly
belonging to the UN family) agencies shaped their approaches
and actions. Bilaterals tended to focus on macro issues:
financing, public sector reform, civil service, sustainability,
etc. Their officials, being themselves civil servants, gave priority to strengthening the public sector. Their interventions
1993
1994
1995
1996
1997
1998
Drugs' Purchasing Through MEDIMOC
CENE (Emergency Commission, chaired by GoM)
General (MoH + focal donor)
UN/ONUMOZ (Transition Period)
Joint Auditing
Pooling Arrangement TA
Pooling Arrangement Drugs
Donors' Group
Manica Programme (Finland)
Tete Programme (Denmark)
Sector Budget Support
HSRP (World Bank)
Figure 1. Aid coordination mechanisms over time
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Enrico Pavignani and Joaquim R Durão
were typically large and long term. ‘Technical’ agencies conceptualized their mandates as outcome-oriented, and shaped
their actions accordingly, as short-term, resource-intensive
projects. Their focus was on disease control, and specific services for disadvantaged population groups. Their solicitude
with quick returns and demonstrable results (influenced by
fund-raising concerns) shaped their perceptions of coordination.
While bilateral and multilateral agencies openly competed
for influence in the policy discussion, the World Bank has
chosen an apparently neutral role. Bank officials stressed that
the GoM was in charge of managing borrowed funds, and
downplayed their role to simple controllers. Within the
Mozambique health sector, it has been widely acknowledged
that the Bank has been respectful of the plans and strategies
laid down by the MoH (Hanlon, 1996). The Bank’s dual role
(lending and development institution) was a source of
ambiguity; Bank officials emphasized one or the other
according to context and convenience. Certainly, the MoH
perceived funds borrowed from the Bank as different, and
more valuable than grants, as loans were owned and have
fewer conditionalities. This might explain the relative priority
given by MoH officials to the Bank over other agencies.
The focal donor
In 1992, the MoH appointed the Swiss Development Cooperation (SDC) as focal donor. Its mandate, not clearly laid down
at the time, was to interface between the MoH and the donor
community, facilitate mutual understanding, circulate information and relieve the MoH of part of the burden of discussing every issue with each agency. Over the years, the focal
donor role has expanded, encompassing policy formulation,
development of management tools, and support to programme implementation. Swiss support has grown, stabilizing at US$ 10–11 million a year, and by 1997 covered several
areas of recurrent expenditure.
The rationale behind the choice of the SDC as focal donor
was unclear to some respondents. At the time, the agency was
not a major financier and its technical capacity was limited.
From the point of view of the donor community, other agencies would have been better placed to fulfil the focal donor
role. However, the MoH’s perception of the SDC differed
because the agency had taken the bold decision to provide
sector budget support to the NHS, an indication that the SDC
was ‘on the ministry’s side’. As the funds were managed
directly by the MoH and covered recurrent costs, they were
more valuable to health authorities than other larger contributions. The SDC influence within both the MoH and the
donor community grew beyond its financial weight.
Perceptions regarding the focal donor were roughly split into
two fields. Those supportive praised the focal donor’s energetic action, technical capacity, long-term commitment and
strategic vision, willingness to take risks, and ability to press
the MoH for action. Those critical argued that the SDC was
too influential and was taking over core MoH responsibilities.
In their view, it no longer represented the whole donor community, but only the ‘like-minded’ agencies. These donors felt
marginalized and questioned the ultimate aims of the focal
donor. To defuse the tension, the SDC has on several
occasions asked the MoH to be relieved of the function,
eventually stepping down in 1998.
The MoH’s perception of the focal donor has also changed
over time. Initially the MoH regarded the focal donor as an
ally in the struggle to control the donor community, and was
highly appreciative of the agency’s work. As donor coordination was consolidated, and the MoH position vis-à-vis
donors became less precarious, MoH officials became aware
of the focal donor’s increasing influence. Furthermore, the
MoH felt the pressure of the ‘like-minded’ donors, which
became progressively a more cohesive group. The perception
of the focal donor within the MoH changed accordingly and
the delicate balance of mutual trust and agreement on fundamental issues deteriorated. The SDC was regarded within the
MoH as a powerful partner whose initiatives had to be contained.
Budget support
Approximately 60% of the national budget was financed by
donors through counterpart funds, as generic budget support.
In addition to it, a portion of project aid to the health sector
assumed the form of earmarked budget support. Earmarked
(or sector) budget support began in 1990 (Galli, 1997) and has
increased significantly. On average, at least US$ 5 million was
provided to the health sector annually as earmarked budget
support.
Sector budget support expanded health service financing at
the peripheral level considerably, at a time when emergency
aid was channelled through NGOs, bypassing the public
sector. As budget support provided a concrete sign of trust in
the MoH’s capacity to manage external funds, it boosted staff
morale. The joint management of external and state funds
compelled donor agencies and health authorities to collaborate. Having to meet rigorous donor requirements forced the
health administration to improve its performance. Budget
support, by stimulating the design and introduction of original planning tools explicitly geared at rationalizing resource
allocation, has contributed to the increase of the sector’s
outputs and reduced some inequities and inefficiencies.
Benefits for the recipients notwithstanding, budget support
remained a donor-led process. Periodically, negative reactions emerged among some health officials, who were resentful of the increased financial discipline, the obligation to
honour agreed plans and the loss of the perks attached to projects. The central condition for releasing budget support was
that health authorities open their books to donors, which has
been particularly controversial. Also, by providing sizeable
inputs to health authorities, budget support highlighted existing implementing weaknesses, previously masked by the lack
of resources.
Most observers argued that the ideal approach should be to
channel budget support through the Ministry of Planning and
Finance (MPF), leaving the task of allocating the budget
rationally across different sectors to the GoM. The sector
Managing external resources in Mozambique
budget support would be only an interim step towards a fullfledged one. However, most respondents were sceptical
about the MPF technical capacity to produce sound budgets.
In addition, the Ministry was subjected to enormous political
pressure. Hence, there was consensus that the earmarked
approach protected the health sector from the competition
represented by other influential ministries. Encouraged by
positive results, other donors were increasingly considering
budget support as the main channel for future aid.
The Health Sector Recovery Programme (HSRP)
The HSRP, prepared in 1992–95, has evolved along the lines
of a ‘Sector Investment Programme’ (SIP) (Harrold et al.,
1995). Its goal was to provide a comprehensive, yet flexible
reconstruction tool to bring GoM and donor agencies
together in a cooperative effort. The HSRP could be
regarded as budget support in its own right. However, all
inputs were configured as investment, despite the programme
also financing recurrent expenditure, such as training. The
funds were controlled by the MPF but alongside the state
budget. Its features did not fulfil the requirements of an ideal
SIP, yet the HSRP was considered a step towards a fullyfledged sector programme.
A serious difficulty incurred by the programme was the participation of other donors, who were relatively uninvolved in
the design, and were only later invited to join. This oversight,
only partially corrected, may have been due to the manner
adopted by the World Bank to working with the MoH. Large
identification and appraisal missions absorbed the entire
capacity and attention of the MoH staff. The integration of
funds from other donors had to be postponed until the
mission’s departure. To compound matters, the programme
document took the form of a Bank staff appraisal report,
whereas it was mainly prepared by MoH planners. This
unfortunate appropriation conveyed the wrong message
about programme ownership. Consequently, the HSRP was
known as the ‘World Bank Programme’.
The HSRP faced considerable scepticism within the donor
community over the programme’s feasibility given the limited
implementing capacity. Moreover, many feared that the
Bank’s complex procedures, coupled with the GoM’s own
weaknesses, would hamper programme implementation. It
has been argued that ambitious programmes should be postponed until capacity building and public sector reform make
the MoH more capable of managing them.
The MoH position was that the HSRP provides an opportunity to learn. Its development involved an intensive programming exercise, valuable in itself. Managers were
expected to gain experience as they implemented the programme. Although it was clear that the programme represented a major instrument in the financing of reconstruction,
its value as a coordination scheme remained problematic.
Other coordination arrangements had been developed
outside the HSRP and were supported by agencies not sympathetic to the programme. The Bank’s procedures were not
integrated with the mechanisms adopted by the MoH and the
like-minded donors. Further, as of the end of 1997 (i.e. after
249
two years of life), only 5% of the Bank’s loan was disbursed
(Landau, 1998). Meanwhile, there was consensus that the
HSRP had become seriously outdated.
Geographical zoning
Some agencies have chosen to concentrate resources within a
particular geographical area. The benefits of such an
approach should include a decrease in the number of players
that local authorities have to manage and reduced donor
competition, while coherence and comprehensiveness of
external support should be encouraged and planning and
management systems optimized (Buse & Walt, 1996). The
programmes in Manica (supported by Finland) and Tete
(supported by Denmark) provinces are the most established,
dating in conception and implementation from the beginning
of the 1990s. In both provinces, reconstruction proceeded
well ahead of the rest of the country and service coverage was
above average. A measure of aid coordination had been
attained. Donor agencies were brought nearer to the delivery
level, which might enable them to better adapt their policies
to local needs.
Despite the accomplishments achieved by zoning, a number
of concerns have been voiced. Critics argued that large interventions disempower local, as well as national, officials.
Provinces benefiting from zoning were often ‘forgotten’ by
the MoH, which concentrated its attention on ‘orphan’
provinces. The project’s large and highly qualified team took
responsibilities away from local officials whose negotiating
position became precarious. Recipients became ‘hostages’ of
a single, powerful agency, which could lose sight of the
national context because it was too absorbed with provincial
imperatives. Other agencies active within the same province
were marginalized. Whereas the argument against zoning
may be strong, in practice judicious management might
control the mentioned side effects. In these two specific cases,
the prevailing appraisal was cautiously positive.
Pooling arrangements
Drug imports and salaries for technical assistance have represented major cost centres for external support. Typically,
the MoH requested many agencies to hire hospital specialists,
until a donor was found that was willing to foot the bill. With
drugs, only after a donor had allocated a specific amount, did
the MoH decide the type and amount of medicines to purchase. Neither system was satisfactory. The former resulted in
too many different salary levels, contracts, inconsistent
recruitment criteria, etc. The latter was subject to unpredictable funding, erratic purchasing cycles, difficulties with
long-term planning and tied donations which resulted in frequent stock-outs. Moreover, the decisions in both cases were
offer driven; hospital posts or drug imports expanded or
shrank according to available external financing.
To correct this situation, a number of agencies within the likeminded group of donors pushed for a restructuring of these
areas. Within the new system, the MoH specified its global
needs in technical assistance and drugs according to agreed
criteria. The donor group pooled their funds and responded
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Enrico Pavignani and Joaquim R Durão
to needs according to GoM priority. The remaining gaps were
filled with alternative schemes, where available. Common
procedures were established for salary scale, advertisements,
selection, bidding, etc. Management responsibilities were
progressively transferred from donor offices to the MoH.
Perhaps the major benefit of the new approach was the clarification of the NHS requirements in terms of drugs and hospital specialists, and their relative prioritization. The joint work
to define true needs has been intense, as different requests
have to be accommodated within a single framework. The
priority setting process has been crucial, as it has become
clear that available funds would fall short of specified needs.
This has forced the partners to critically appraise the requests
submitted by recipient institutions. Thus, only well-argued
demands have been accepted. In 1997, the pooling arrangements were managing US$ 12 million.
These schemes were recognized as valuable in themselves,
and as significant steps towards a truly integrated support. As
of 1997, other agencies were considering joining the pools.
The TA pool had expanded to cover non-hospital technical
assistance. A third pool for training abroad was in the
pipeline. Nevertheless, despite the praise earned by these
schemes, resistance to them was patent. By introducing clear
norms and transparency, they limited officials’ freedom and
prerogatives. Furthermore, the new schemes were in direct
opposition to the existing vertical programmes. Once in
place, the pooling arrangements were supposed to progressively take over financing and management decisions, until
now the domain of each vertical programme. Resistance was
therefore natural. The challenge was to rationalize the system
without disrupting service delivery, hence avoiding exaggerated negative reactions.
Joint auditing
In 1995, a group of agencies providing financial support at the
central level agreed with the MoH to support a joint auditing
of the external funds managed by the MoH main executive
directorate. An independent private firm carried out the
audit, according to international standards. It was found that
incomplete reporting and inadequate justification affected
almost all projects, even those managed directly by donor
staff. These findings prompted some agencies to become
more involved in financial management and to provide
support to central and provincial authorities. The situation
was improving as anomalies were corrected and managers
became better acquainted with the required standards. The
management of external funds, previously fragmented by
programme and project, was progressively being centralized
in a single accounting department. Accounting systems were
becoming more robust, less vulnerable to malpractice. Technical managers were relieved of their accounting tasks and
could concentrate on their core duties. There were plans to
extend this approach to all external funds managed by MoHHeadquarters and progressively to cover provincial authorities and large hospitals as well. The strengthening of auditing
practices was considered a cornerstone not only of external
aid management but also of the development of the entire
health system.
General discussion
The preceding review of aid management mechanisms suggests that they have been introduced in the health sector
under difficult circumstances; in some instances (i.e. budget
support), just to keep the system afloat. While some of these
mechanisms may have been theoretically attractive, they
were untested in Mozambique or elsewhere. Given health
sector weaknesses and general disarray, attempts to follow
ambitious models like the SIP may, with hindsight, look
brave. At the time, they looked to many observers as just
insane. Against the odds and within limitations, the strategy
has worked. As of 1997, these schemes were in place and
worked reasonably well, having been shaped by the collective
experience earned hands-on. Further, the recipient’s capacity
has been strengthened along the road.
In Mozambique, the process of aid management has been
incremental and innovative. Budget support is the most illustrative example of an open-ended process. Deliberately laid
down vaguely at the beginning, it has provided to every
involved partner, on both sides of the cooperation relationship, a stimulating learning ground. The tension between
keeping the services running and strengthening management
systems has been resolved through progressive improvements, crises, detours, and restarts. It has been argued that a
more formal approach, based on defining an ideal programme
from scratch, would have failed. Admittedly, the processoriented approach used in Mozambique cannot be successful
if some preconditions are not fulfilled. A strong political commitment is mandatory on the recipient’s side, so as to learn
from mistakes and overcome hurdles. On the donor side, procedural flexibility, risk taking and a long-term perspective are
crucial. A considerable degree of frankness is needed on both
sides.
This discussion raises a more general issue, about the relative
merits of informal over formal schemes. There are grounds to
suggest that, within the Mozambican context, informal
arrangements may be more effective. Even formal schemes
perform better when loosely structured. The recipient’s weak
capacity, the complexity of the setting, and the ever-changing
context are the main explanatory factors. As capacity
improves and the scene stabilizes, the chances of success for
structured approaches increase. For the time being, the lesson
learned can be of conceiving partnerships as evolutionary,
slow and long-term processes. They are more successful if
kept flexible and forgiving at the beginning, and progressively
made more challenging, demanding and structured as they
grow and mature.
Factors explaining the effectiveness of coordination
mechanisms
Importance of solid and widely accessible information
For some years, a collaborative effort to analyze the data
generated by the information system has produced insights
about resource allocation, service provision, efficiency, trends,
regional gaps. The NHS picture obtained through this analysis
has been circulated to interested parties, shaping policy
Managing external resources in Mozambique
discussion and allocative decisions. It has influenced coordination, as each agency has found a reference framework for
intervention. Discussions have become easier and more
factual, as at least part of the argument was debated on solid
ground. Many agencies have repositioned themselves, as evidence of gaps and overlappings emerged. Further, as the
analysis has been generated within the MoH, public authorities have gained credibility and leverage over donors. This
intelligence capacity has, however, been precarious, being confined to a small number of analysts who were dispersed across
the health system and interacted through an informal network.
Thus, minor changes could dismantle the existing capacity,
depriving the MoH and donors of crucial information.
Importance of credible, long-term plans
Given dependence on external resources, concern has been
voiced about the degree of autonomy enjoyed by national
health authorities. Experience has suggested, however, that
some donor agencies were prepared to relinquish control of
their resources, provided that the recipient authority was reassuringly competent. In areas where the MoH has been able to
articulate convincing strategies, donor support has been provided with few conditions attached. Hence, the tension
between the sovereignty of the recipient and resource control
by the donors might be alleviated by robust technical capacity.
The recipient can have a negotiating edge if able to demonstrate that it better understands the context, has clear ideas
about the desirable direction of health service development
and can translate plans into action. Unfortunately, the MoH
has been inconsistent in this regard. One respondent argued
that the convincing policy papers produced in the past by the
MoH were dangerously deceiving donors, who were led to
overestimate the system’s implementing capacity, as well as
the political commitment backing those plans.
Internal coordination within the MoH
Some respondents viewed the MoH as a composite organization, needing internal coordination if coordination with
donors was to be effective. Often, MoH departments and
officials appeared to be pursuing their own agendas, hindering coordination as a whole. Many technical departments,
linked to outside technical partners, were not interested in
developing a global strategy. The MoH political leadership
made commitments which, at times, were neither shared nor
understood by mid-level management.
According to this view, the MoH was itself a source of conflict, sending ambiguous messages, playing off one agency
against another. The image of a declining MoH was repeatedly evoked during the interviews, disclosing the concern
about the Ministry’s involution and loss of pace and direction.
This is striking, considering that the MoH technical capacity
has been enhanced during the last years. However, the MoH
was expected to perform differently than in the past, and
shortcomings previously covered up became patent. In
addition, during the years following the peace agreement,
donors have increasingly considered the MoH as a credible
partner, concentrating their resources and attention on it.
251
This has resulted in more responsibilities and demands progressively devolved to the Ministry, which had to live up to
higher expectations.
Importance of MoH leadership
It was widely agreed that the management of external
resources required resolute MoH leadership. Conversely, few
people felt the Ministry was equipped to lead donors successfully. Why this was the case is debatable. The MoH was part
of a legitimate government and was endowed with sizeable
resources. Nonetheless, to provide leadership to donor
coordination, the MoH would have to believe in its value.
Such value was not universally shared within the Ministry. At
times, senior officials felt more comfortable when dealing
with isolated partners, and took advantage of fragmentation.
MoH leadership may, therefore, be elusive until the balance
of power evolves in the MoH’s favour and its managers feel
more in control of donors.
Frequently, the MoH played the role of referee among competing agencies, trying to reconcile the many approaches
upheld by donors. Some respondents argued that the MoH
should make choices. Instead, the MoH was apparently
aiming at keeping everybody within the community. The cost
of this approach was inconsistency in national policy. It was
argued that the MoH should formulate its own policy and rely
only on donors sharing the same views and goals.
Coordination practice changes patterns when it passes from
policy discussion to joint action
When aid management mechanisms are introduced, they may
provoke instability in the system, which either progresses
towards a more integrated level of functioning or collapses.
Consequently, we argue that coordination is not a continuum
but a sequence of jumps to higher levels of integration. To
abandon functioning arrangements, admittedly fragmented
and inefficient but simpler to manage, represents a risky
move. If the new scheme is not supported with adequate
management capacity it may fail to deliver the expected benefits; crises and pressure to return to the previous situation
ensue. Conversely, successes build momentum and push the
goals beyond the level initially envisioned.
Institutional memory
Coordination is a slow process, involving many partners and
built on mutual confidence. The stability of key players is,
therefore, crucial to success. Newcomers (either individuals or
agencies), if not properly briefed and integrated in the process,
may be disruptive. Donor officials interviewed in this survey
had spent on average four years in post. This resulted in solid
personal relationships, a good understanding of the local situation, and a personal commitment beyond professional duties,
all of which positively influenced aid coordination.
Transactions
Aid management was affected by the transactions taking
place between donors and MoH officials. Some of these were
252
Enrico Pavignani and Joaquim R Durão
monetary; others materialized as perks, grants, vehicles, etc.
Payments or material rewards to MoH officials have played a
role in many of the coordination mechanisms described
above. Incentives have, at times, motivated cadres to carry
out extra work, supported the introduction and strengthening
of new instruments, or stimulated officials to resist change.
One of the major shortcomings of these measures was their
selectiveness. A market was thereby created within the
system, within which cadres moved around looking for better
pay, and clusters of skills and performance emerged, against
a depressed landscape. From their privileged point of view,
these clusters looked successful. However, within the
Mozambican context, where skills were so scarce, one may
question whether the creation of strong segments, at the
expense of others, did indeed benefit the overall system.
The argument against any sort of direct economic relationship between donors and MoH officials was strong. Consequently, generic budget support to salaries would be decisive.
Whereas there have been attempts in the past to introduce
schemes of this kind, at least for higher level officials, they
have not been resolutely embraced by donors and have been
short lived. Whether or not this was due to the donors’ own
interest in maintaining the present leverage on officials was
debatable.
years, were expected to be taken over by the recipients.
Instead, a vacuum had emerged.
The findings of this study support a number of broad conclusions. First, to manage external resources effectively is an
attainable goal, even in an unstable environment such as
Mozambique. Second, successful coordination represents a
long-term, labour-intensive, incremental endeavour. Third,
there is no blueprint for successful coordination; solutions
emerge from trial and error. The nature of the process
encourages the emergence of multiple mechanisms, whose
reciprocal consistency may increase over time. Mutual adaptation among partners is essential and individuals are, therefore, critical in shaping the process. Fourth, the process of
coordination is as important as its results in strengthening the
overall system. Fifth, long-term plans, consistently endorsed
by partners, are crucial. Finally, the coordination process has
no clear upper limit. When a success is recorded, it raises the
stakes of the game, suggesting possible new developments.
Endnotes
1 This is the reduced version of a longer report, titled ‘Aid,
Change and Second Thoughts: Coordinating External Resources to
the Health Sector in Mozambique’, available from the authors or the
Health Policy Unit of the London School of Hygiene and Tropical
Medicine. The whole picture and all statements refer to the end of
1997.
Importance of people
In a small environment like the health sector in Mozambique,
agencies were often identified with specific officials. Personalities, management styles, perceptions and conceptualizations therefore became important in defining the terms of the
coordination process. Some agencies or departments have
substantially changed their positions, due to the substitution
of a single official. This was made possible in some agencies
by mandates set in very broad terms. Given the limited
capacity in the health sector and its precarious systems, a
single, competent professional may impact considerably on
aid management. Thus, some coordination mechanisms were
strongly associated by observers with particular persons, who
had been crucial in shaping the process.
Conclusions
This tale of aid management is one of change and resistance
to change. Comparing the picture emerging from the study in
1997 with the situation prevailing at the end of the 1980s
(Cliff, 1993; Frieden, 1991), progress has been impressive.
The ubiquitous fragmentation has been greatly reduced,
functioning coordination mechanisms were in place, donor
interventions were better integrated into the MoH programmes, and efficiency and transparency had increased.
Some of the existing aid management tools were consistent
with a more ambitious sector-wide approach, making its
future adoption easier. These considerations should have
offered grounds for widespread satisfaction. Nevertheless,
frustration and pessimism affected the perceptions of many
players. Some processes had lost momentum and stagnated
during 1997. Coordination mechanisms, controlled by donors
during the 1980s and shared with the MoH during the last
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Acknowledgements
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Biographies
Enrico Pavignani has worked in Mozambique since 1980, first as a
district doctor, and subsequently as a trainer of mid-level health
workers. From 1991 to 1998 he was posted at the MoH in Maputo, as
a planner, analyst and policy adviser. He holds an MSc in Community Health in Developing Countries from the London School of
Hygiene and Tropical Medicine. His main interests are planning and
evaluation of health services, human resources, PHC provision and
utilis-ation of external aid.
Joaquim Durão is an economist by training. He has worked with
health-related issues since 1976, as analyst, policy adviser and
manager. He is general director of a public company of pharmacies.
He has acted as Chief of the Pharmaceutical Department of the Ministry of Health during 1983–1989 and since 1997. From 1990–1996 he
acted as a consultant for WHO and the World Bank, among others.
His main interests are health financing and drug regulation and
management.
Correspondence: Enrico Pavignani, C.P. 74, Maputo, Mozambique.