1. Global Fund Strategy for increased domestic financing Satellite Session: Where is the Money?? Challenges & opportunities in mobilizing Increased Domestic Financing Melbourne, 23 July 2014 Dr Christoph Benn Director, External Relations Division Global Fund

2. Context of the 5th Replenishment Is the period of sustained rapid DAH growth over? 2 DAH including resources channeled through GF from 1990-2012 in 2010 US$ Billion Financing Global Health 2012: The End of the Golden Age? Seattle, WA: IHME, 2013 July 2014Melbourne ? Need significant progress in other areas of financing for health: domestic financing, private sector partnerships & innovative finance mechanisms

3. Context of the 5th Replenishment ODA projected to increase in 2014 & then stabilize 3 July 2014Melbourne Net official development assistance 2004-13 & projections for 2014-16 (in current US$ billions) OECD: http://www.oecd.org/newsroom/aid-to-developing-countries-rebounds-in-2013-to-reach-an-all-time-high.htm ODA in 2013 rebounded & reached $ 134.8 B despite economic pressure on donors but likely to stabilize after 2014  critical to ensure appropriate share for health

4. Setting global targets for health financing in line with UHC 4 No single roadmap to achieve targets, this is a country-by- country process Primary role of external financing is to fill the gap in the short and medium term for some low- and middle-income countries. Governments encouraged to: spend at least 5% of GDP on health, ensure government health expenditures (GHE) of minimum $86 per capita Røttingen JA et al, Shared responsibilities for health A new global framework for sustainable health financing, Chatam House WG 2 on Health Financing, May 2014 July 2014Melbourne

5. Key challenges & opportunities Value for Money: As the resource landscape is changing, focus is now more on improving health program efficiency and effectiveness which calls for both “more money for health and more health for money” Domestic Advocacy: a large part of any increase in public funding for health will need to come from governments, therefore need to develop a convincing business and advocacy case for increased / sustainable public commitment to programs Sustainability: Domestic public spending should continue as economic growth continues, however it will not be sufficient to address all the health needs. Therefore, still a need for external resources in the short to medium term as well as to explore PS partnerships & other innovative mechanisms. 5 July 2014Melbourne

6. GF domestic financing strategy 6 July 2014Melbourne 6 GF strategy for increased domestic financing for health 1. Implement NFM policies linked to domestic financing (Counterpart financing & willingness-to- pay) 3. Advocate for political leadership & for realization of Government commitments 2. Support domestic resource mobilization efforts (priority countries) with help of partners 1. Implement NFM policies linked to domestic financing (CF & WTP) Country needs assessment/ target- setting & support the buy-in process Options of tools/mecha- nisms for innovative financing Documentation & dissemination of Best practices Advocacy plan with key messages by GF, Donors, partners, private sector and CSOs Revive co-champion- ships and identify other champions Leverage key national/ international events & platforms Support countries on CF/WTP (guidance & tools, country dialogue) Review country compliance with CF & monitor WTP commitments Track at grant & portfolio levels

7. 7 New funding model: Counterpart financing aims to mobilize domestic resources Mandatory minimum requirements of counterpart financing Minimum threshold contribution (LI- 5%, Lower LMI-20%, Upper LMI- 40%, UMI-60%) Increasing government contribution to disease programs and health sector Reliable disease and health expenditure data ‘Willingness-to-pay’ commitment to further incentivize Additional co-investments by government in disease programs in accordance with ability to pay Realization of planned government commitments 15% of allocation is contingent upon meeting WTP commitments Core Global Fund principles: Sustainability, Additionality, Country Ownership

8. Africa has made commitments & countries are demonstrating progress Abuja Declaration on HIV/AIDS, TB and Other Related Infectious Diseases, 2001: Heads of State commit to spend at least 15 % of budgets on Health Addis Ababa, African Union roadmap on shared responsibility and global solidarity for AIDS, TB and malaria response, 2012. AU endorsed Roadmap on Shared Responsibility and Global Solidarity for HIV, TB and Malaria and the Pharmaceutical Manufacturing Plan Tunis Declaration on value for money, sustainability and accountability in the health sector, 2012. Governments commit to enhance value for money, increase accountability, improve sustainability of health resources and fight corruption. Abuja AU Special Summit Declaration on HIV/AIDS, TB and malaria, 2013. Calls for countries to honor the 2001 Abuja Declaration and other health commitments. 8 Health as % of total government expenditure, 2011 Rwanda23.7% Malawi18.5% Zambia16.0% Togo15.4% Tanzania11.1% South Africa10.0% Botswana8.7% Nigeria7.5% Kenya5.9% Source: UNAIDS, Oxford Policy Management, Et al. July 2014Melbourne

9. In sum, the Global Fund is working with countries and partners to: Leverage GF resources to encourage increased Government commitment to disease programs & related health systems strengthening Improve data quality and accessibility for both domestic and international health funding Identify and address rigid budgeting practices, allocative inefficiencies that are obstacles to the reallocation of revenues towards health Nurture political leadership --► ongoing work on multi-dimensional advocacy and messaging to ensure health is given top priority at national and international levels 9 July 2014Melbourne

10. Conclusions Health expenditures should keep pace with economic growth There is no single blueprint for increasing domestic funding for health Lessons learned and best practices should THANK YOU 10 July 2014Melbourne

11. Overview of CF & WTP in new funding model 11 July 2014Melbourne

12. Domestic resource mobilization support to 5 priority countries in 2014-16 12 July 2014Melbourne

13. Innovative ways of raising domestic resources and potential gains March 2014Johannesburg 13 SourceUS$ 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 But how to 1) sell these ideas and 2) ring-fence the funds?