Domestic Financing: Shared Responsibility, Mutual Accountability

In advance of the U.N. General Assembly this week, Friends sat down with Shu-Shu Tekle-Haimanot, Senior Specialist on Advocacy and Partnerships at the Global Fund to Fight AIDS, Tuberculosis and Malaria. We talked to her about progress in domestic financing for health among implementing countries.

Friends: Can you explain the importance of domestic financing to the Global Fund?

Shu-Shu: In order to sustain momentum in the fight against HIV/AIDS, tuberculosis and malaria — in addition to other health challenges — over the long term, an increasing level of funding will need to come from implementing countries. Therefore, increasing domestic financing for health is a priority at the Global Fund: it enables countries to take greater control of their health interventions; promotes sustainability and sends a powerful signal to the international community about shared responsibility and mutual accountability.

Friends: Are the governments of implementing countries increasing the level of funding for AIDS, tuberculosis and malaria?

Shu-Shu: There is no question that implementing countries are taking steps to finance domestic health programs. Between 2006 and 2011, global domestic investment doubled spending on AIDS, tuberculosis and malaria.[1] More than 80 countries increased domestic investments for the AIDS response by more than 50 percent between 2006 and 2011.[2] Similarly, domestic funding for tuberculosis care and control in 104 countries increased in aggregate by over 30 percent from 2006 to 2011.[3] Over the same period, domestic funding for malaria control increased by nearly 40 percent.[4]

Developing countries, on average, spend 20 times more of their own resources on health than they receive in assistance. By way of illustration, government health expenditure in developing countries grew 7.2 percent between 2010 and 2011.[5] In addition, African countries are getting closer to reaching the agreed upon Abuja target of allocating 15 percent of their total government expenditure to health. In The Abuja Declaration: 10 Years On, the World Health Organization reports that, though only Rwanda and South Africa have achieved the target, 27 countries have increased the proportion of total government expenditures allocated to health since 2001.

Friends:  How were implementing countries involved in the Global Fund’s recent replenishment efforts?

Shu-Shu: Mobilizing increased domestic spending from implementing countries was and continues to be an important component of the Global Fund’s outreach strategy for the Fourth Voluntary Replenishment. In the lead-up to the Replenishment Conference last December, we worked with Heads of State and other champions for health in implementing countries to rally support.

We were very pleased that several African countries made significant commitments during the week of the Replenishment Conference. For example, Nigeria announced $150 million in new investments in its own HIV prevention and treatment[6] in addition to its $1 billion commitment as part of the “Saving One Million Lives” campaign. It also pledged $30 million to the Global Fund.

Côte D’Ivoire is another interesting example. In 2010, the country became the first in Africa to benefit from Debt2Health, an initiative launched by the Global Fund to help generate additional domestic resources for health financing through debt swaps. To date a total of $212.5 million has been written off in swap agreements between creditor and debtor countries.[7] As part of the 2013 replenishment, Côte D’Ivoire pledged $6.4 million through the Global Fund Debt2Health initiative.[8]

There were other notable contributions during replenishment: Kenya pledged $2 million; Zimbabwe pledged $1 million; Namibia pledged $1 million; and Malawi pledged $500,000.

Domestic financing for health will continue to be a high priority leading up to the Fifth Replenishment, expected to take place June 2016.

Friends: Given the challenges many implementing countries face, what are some of the unique strategies being employed to mobilize domestic resources?

Shu-Shu: The level of both political and financial challenges should not be underestimated; however, we are seeing the development of some innovative financing mechanisms to help address those challenges. For example, governments are looking at ways of using tax revenues, reprogramming existing funds, generating more revenue from profitable sectors like tourism, or involving the private sector in partnerships or trust funds to increase resources to combat HIV/AIDS, tuberculosis and malaria.

Already, we see innovating financing approaches taking shape in several countries. Zimbabwe, for example, was the first to introduce an AIDS levy in 1999. The levy has increased significantly since the adoption of the country’s multicurrency system, growing from $5.7 million in 2009 to $26.5 million in 2012. Projections indicate that it will grow to $47 million in 2016.

For its part, Kenya is evaluating a proposal to enhance government allocations to an AIDS trust fund with strategies such as an airline levy. And, Tanzania is in the process of establishing its version of an AIDS trust fund that will work under the national government with the goal of reducing donor dependency by 36 percent.[9]

Friends:  Although the topic of domestic financing has always been a part of the global health conversation, it seems to be getting more attention at the moment. Why do you think that is the case?  

Shu-Shu: There are several factors. Institutions like the Global Fund and, in the U.S., the President’s Emergency Plan for AIDS Relief and the President’s Malaria Initiative, were established as an emergency response to AIDS, tuberculosis and malaria. Since the early days, these organizations and partners — including implementing countries — have achieved astonishing results: the past 10 years has seen HIV incidence reduced by 38 percent[10] and malaria mortality rates reduced by 42 percent.[11] Global mortality from tuberculosis has fallen 45 percent since 1990.[12] As a result of this progress, donor aid for the three diseases is transitioning to a more sustainable approach, which requires mutual accountability and partnership among stakeholders.

At the same time, as a recent Institute for Health Metrics and Evaluation report shows, while year-over-year growth rates in development assistance for health from key donors have fallen since 2010, growth rates in domestic spending from developing countries have increased and, on average, exceeded the amount of assistance they received.[13] This means, that as developed countries’ giving levels out, implementing countries are gradually making greater investments in their own health systems and playing an increasingly critical role in the fight against the three diseases and other health challenges.

Friends: Can you explain the Global Fund’s “Willingness-to-Pay” policy?

Shu-Shu: This is a policy that withholds 15 percent of prospective grant payments unless and until the implementing nation is able to demonstrate its own investments in HIV/AIDS, tuberculosis and malaria alongside those made by the Global Fund. The policy requires prospective implementing country governments to make additional investments that are:

• Beyond current levels of government spending;
• Over the minimum threshold requirement;
• Committed to strategic areas of the national disease programs supported by the Global Fund; and
• Verifiable.

The required amount of investments is based on existing commitments, past spending trends, country income, and fiscal space. It is agreed upon during the country dialogue process between the Global Fund and implementing countries.

Friends: What do you see in the short and long term with respect to domestic financing for AIDS, tuberculosis and malaria?

Shu-Shu: Global priorities are changing. I do not see disaggregated health targets featuring as prominently in the post-2015 agenda. Donor assistance remained level in 2013; we do not expect to see the rapid growth in donor assistance for health that we have seen in the past. The reduced level of bilateral assistance from key donors is balanced only by growth in the multilateral sector.[14]

To defeat the three diseases, we need to be more ambitious. Only through shared responsibility and mutual accountability will we be able to take advantage of the historic opportunity before us to defeat AIDS, tuberculosis and malaria as epidemics.

I do not want to underestimate the challenges. Commitment to global health by all stakeholders, including the Global Fund, bilateral donors and implementing countries, should be viewed as a marathon rather than a sprint. And it is important to remember that efforts toward sustainability are not synonymous with domestic financial takeover of programs — I think everyone realizes that that will not be possible in low-income countries, where capacity is low, for many years. Instead, we are looking at changes such as innovative financing and incremental increases to domestic investments.

What is important to note, though, is that great progress is being made. And that is very exciting.

This post was originally published in September 2014.

Footnotes