Where is the Money? Challenges and opportunities in mobilizing increased domestic financing The role of domestic resource mobilization Peter van Rooijen Satellite Session, Wednesday 23 July 2014

Where is the Money? Domestic financing always was and still is the biggest source of funding of health! -Implementing countries spend on average (!) 20 times more from their own resources than what is received in assistance – US$613 vs US$31 (2011) -Implementing governments investments in health grew faster than assistance in the last 10 years (6.4% vs 9.8% over the last 6 years) (Note: large differences between countries) INSTITUTE FOR HEALTH METRICS AND EVALUATION UNIVERSITY OF WASHINGTON

Development Assistance For Health Allocation And Disease Burden, Dieleman J L et al. Health Aff doi: /hlthaff ©2014 by Project HOPE - The People-to-People Health Foundation, Inc. Competition

Acknowledgement Responding to Health Challenges: the role of domestic resource mobilisation. Professor Alan Whiteside and Gavin Surgey (Researcher, HEARD) with input from Robert Greener (OPM), Samantha Bradshaw (Research Assistant, BSIA) and Collins Mucheuki (Research Intern, HEARD)

What we need for a successful Replenishment -Demonstrate impact -Demonstrate increased domestic investments “The burden needs to be shared and there must be evidence of this co-ownership.” (Alan Whiteside, 2013)

GF Needs Assessment

The challenge “While there may be scope for 12 countries to increase its domestic financial contribution to the national AIDS effort, the political and fiscal challenges of doing so should not be underestimated.” -Rigid budgeting practices that make it hard to reallocate revenues toward AIDS; -Limited analytical and advocacy capacity of AIDS and health officials to make the case to their counterparts in finance ministries; -Deeply ingrained perceptions by finance and other senior government officials that “donors will take care” of the AIDS program; -Tracking health expenditure, both donor and domestic, is problematic. Results for Development Institute (2013) Financing National AIDS Responses for Impact, Fairness, and Sustainability A Review of 12 PEPFAR Countries in Africa, Washington October 2013

Options for increased domestic funding -Fulfilling the commitment of African governments to reaching the agreed Abuja target, allocating 15% of their total government expenditure to health. -Including similar political health investment targets for other regions in the Post 2015 Sustainable Development Framework

Options for increased domestic funding Innovative financing options have been identified that could generate $15.5 billion annually: US$ billions 75% of an alcohol levy3.9 Contributions from high-revenue enterprises2.4 Airline levy by all African countries1.7 2% of public sector budgets earmarked for AIDS2.4 Mobile phone levy2.0 1% income tax levy earmarked for AIDS3.1

Options for increased domestic funding Other initiatives to diversify funding sources include:  Health Insurance schemes  AIDS bond, attracting private-sector purchasers wishing to raise their corporate social responsibility (CSR) profile.  A ‘dormant’ fund, using unclaimed property commercial accounts.  An AIDS lottery.  Remittances from the diaspora.  Boosting private sector contributions.  ETC.

CS & increased domestic funding The role of civil society needs to be recognized and improved: Ensuring that health is a priority Ensure CS/KP’s remain a priority (+ harmreduction, etc) Advocate for the importance of funding domestically Inclusion of CS in the development of new financing mechanisms Shaping health laws.

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