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Africa: Stalled Growth at Global Fund
AfricaFocus Bulletin
Nov 9, 2005 (051109)
(Reposted from sources cited below)
Editor's Note
"I have spent the last four years watching people die." With these
wrenching words, diplomat and humanitarian Stephen Lewis opens his
2005 Massey Lectures. Lewis, who is the special envoy of the UN
Secretary-General for HIV/AIDS in Africa, has been outspoken in his
criticism of African governments and international and bilateral
donors alike for their slow response to AIDS and their neglect of
women in particular.
An excerpt from the lectures, just published in a new book Race
against Time, is available at http://www.pambazuka.org/index.php?id=30193.
The book is available from the publisher House of Anansi Press (http://www.anansi.ca) and
at many on-line bookstores. For an earlier speech by Stephen Lewis,
see http://www.africafocus.org/docs04/hiv0402a.php
The most ambitious multinational venture established to confront
the global health crisis has been the UN-initiated Global Fund to
Fight AIDS, Tuberculosis, and Malaria. But while this and other
parallel efforts have gathered significantly increased resources in
recent years, they have not come close to meeting the need. Press
coverage and political attention have been intermittent, and the
Fund's growth rate is, according to the Global Fund Observer, now
stalling.
This AfricaFocus Bulletin contains an article from the Global Fund
Observer with a summary and analysis of the current status of the
Global Fund after three years of operation. Additional information,
including a formatted version of the article with graphs and
tables, can be found on the site of Aidspan
(http://www.aidspan.org).
For previous AfricaFocus Bulletin on health issues, visit
http://www.africafocus.org/healthexp.php
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Stalled Growth: The Global Fund in Year Four
by Bernard Rivers
Global Fund Observer (GFO) Newsletter, a service of Aidspan.
Issue 52 7 November 2005.
(For formatted web, Word and PDF versions of this and other issues,
see http://www.aidspan.org/gfo)
In April 2001, UN Secretary General Kofi Annan declared that there
should be a "war chest" of $7 billion to $10 billion per year to
finance the fight against AIDS, and proposed that much of this
should be raised, and then disbursed, by a "Global Fund."
Within less than a year, the Global Fund to Fight AIDS,
Tuberculosis and Malaria went from concept to reality. The Fund
opened its doors in January 2002, and over the following three
years raised billions of dollars, approved hundreds of grants, and
enabled millions of people to benefit.
However, the growth has now stalled. The next two years will be
particularly tough, with a real possibility that the Fund will be
unable to increase its income much beyond the $1.5 billion per year
required to sustain existing grants. This means that the next
round, Round 6, may not be approved before late 2007, which would
represent a dramatic slowing down in the Fund's approval of new
grants.
The determining factor will be whether the more conservative donors
can be convinced that troubled grants will be fixed or terminated
and that the money spent is actually saving the number of lives
that was anticipated. Right now, the donor jury is out.
The Global Fund has had, from the beginning, an astonishing range
of supporters, from AIDS activists to Republican Senators. This is
largely because the Fund operates differently from traditional
forms of foreign assistance, using a model that emphasizes control
over grants by recipients, and a business-like approach. The
Fund's board includes not just donor governments, but also
developing country governments and various components of civil
society. The programs to be funded are designed and run by the
recipient countries, without the Fund telling them what is in their
best interest. Grant approvals are based purely on feasibility and
technical merit, with no consideration given to ideological
factors. With some grants, significant portions of the money are
passed through to grass-roots NGOs.
Overhead is kept to an absolute minimum, with the whole operation
being run by a staff of 150 in Geneva. And the grants are
"results-based," meaning that if the results promised by recipients
are not delivered, the grant may be terminated and the money
diverted to more effective projects.
This no-nonsense, no-frills approach has been aptly summarized by
Richard Feachem, the Fund's Executive Director, in six words:
"Raise it, Spend it, Prove it." However, once the start-up
funding had been provided, the sequence in reality became "Spend
it, Prove it, Raise it." The Fund must spend its start-up money
efficiently. It must then prove that the expenditure led to good
results. And it must finally point to those results to persuade
donors to give more. It's a classic chicken-and-egg situation, and
the problem is that the time taken to "Spend it" and "Prove it" is
several years, which means the Fund is now encountering
difficulties with "Raise it."
Spending it
The Fund has approved 322 grants to 128 countries, at a cost of
$3.4 billion for the first two years of these grants. And it has
actually disbursed $1.6 billion, with regular further disbursements
to come as results are delivered. The Fund's Secretariat has of
necessity become an enormous meat-grinder, approving project plans,
signing grant agreements, requesting and approving progress
reports, and making disbursements. The pace is relentless, leading
to a certain amount of burnout among staff.
The Global Fund says that thus far, its financing has helped to
provide 220,000 people with antiretroviral treatment for HIV;
600,000 patients with tuberculosis treatment under DOTS (Directly
Observed Treatment, Short Course); more than 1.1 million people
with treatment for malaria; and more than 3.1 million
insecticide-treated mosquito nets. By the end of the fifth year of
all currently approved grants, these substantial achievements will
be scaled up at least eight-fold, if grants perform as planned.
The Fund's rules say that proposals must normally come from a
Country Coordinating Mechanism (CCM), a national-level committee
made up of government, NGOs, the private sector, and more. For
each grant, the CCM then chooses, subject to Fund approval, one or
more organizations to serve as the Principal Recipients (PRs) that
will administer the grant. Most grants have just one PR -- usually
a government ministry; but the Fund is increasingly encouraging
CCMs to consider choosing two PRs per grant, one from the
government and one from the NGO sector. NGOs can also benefit from
the Fund if they are chosen by the PR as sub-recipients. By
enabling small community-based organizations to become
sub-recipients, the Fund can partially offset the constant lament
of some donors that there is insufficient absorptive capacity to
handle significant increases in funding.
Proving it
At this point in time, it's hard to know whether the promised
results are being fully delivered by grant recipients, and whether
adequate corrective action is being taken when grants run into
trouble. It's known that money is sent from the Fund to Principal
Recipients in each country, and is then passed on as needed to
sub-recipients. It's known that clinics are being built, doctors
trained, and drugs purchased. But what about that last mile? To
what extent are pills being put in people's mouths in an
appropriate and sustainable way? And to what extent are prevention
programs actually averting potential infections? The bottom line
is: How many lives are being saved that would not have been saved
if the Fund did not exist? It's just too early in the life of the
grants to know.
On the other hand, the challenge of computing "lives saved per
million dollars spent" has proven just as difficult in all other
AIDS programs. PEPFAR (the enormous U.S. bilateral program), for
instance, has quietly shifted from President Bush's statement that
it "will treat at least 2 million people with life-extending drugs"
to simply saying it will "support" treatment for that many people.
If a program is only "supporting" treatment, how can one determine
how many lives it is saving?
Unlike PEPFAR, the World Bank, and most other funding agencies, the
Global Fund is remarkably willing to make its data publicly
available. But the data is so abundant that the Fund is in danger
of drowning in it. The Fund spent a year developing a system
designed to automatically trigger alerts when grants were running
into trouble, which it then abandoned. It then developed a new
system that is only now producing results, not yet public, though
most of the raw data is available at the Fund's website.
To compound the challenge, the availability of data does not
guarantee its reliability. The Fund uses local fund agents (LFAs)
- usually local branches of global accounting firms - to serve as
its eyes and ears in-country. The LFAs are responsible for
checking not just whether the money is being spent as claimed, but
whether the claimed results are indeed being delivered. However,
conducting programmatic audits of health programs in rural areas is
hardly a primary strength of these companies; and they have also,
on occasion, failed at detecting financial mismanagement. It took
a message from a Ugandan whistleblower to trigger an investigation
that found all sorts of financial problems among government and
non-government sub-recipients in that country, leading to the
temporary suspension of those grants.
And even when the Fund has unambiguous evidence that a grant is not
working, it has been extraordinarily reluctant to terminate the
grant. The Secretariat has tried to live up to the Fund's founding
principle of being "results-based," but the board has over-ruled
almost every attempt by the Secretariat to close down a grant This
means either that the Secretariat is not doing a good job, or that
the board is meddling or has a different definition of success.
There is irony in the fact that the board originally insisted on
the right to second-guess the Secretariat because of its fears that
the Secretariat would be too lenient - not that it would be too
strict. The main explanation for what has happened is that board
members have been the recipients of excessive lobbying when the
Secretariat has proposed terminating grants.
Raising it
The Global Fund currently receives a little over $1.5 billion per
year from governmental donors - considerably short of what the
circumstances require. At the Fund's September replenishment
meeting, donors who had been asked for $7.1 billion to cover
anticipated needs through the end of 2007 only pledged $3.7
billion. This means that for now, there is no money to pay for
Round 6 grants (which the Fund had hoped to approve in 2006) or
Round 7 or 8 grants (which the Fund wanted to approve in 2007).
What is happening is that some donor governments are hesitant to
escalate their contributions beyond current levels without clear
proof that the current grants are achieving their planned results.
But that proof cannot come for another year or two. Despite the
fact that this problem was predictable, even inevitable, the board
has unfortunately developed no clear plan for how best to get
through that time period.
Another factor is that Western governments have disagreed for
years, even internally, on which of three approaches to fighting
the three diseases they prefer. The most common approach is the
traditional "bilateral plus vertical" approach, whereby each donor
supports specific health projects. The second is the "multilateral
plus horizontal" approach, whereby donors collectively pool money
to strengthen a country's entire health sector through SWAps
(Sector-Wide Approaches), "basket funding" (in which donors pool
their resources into a health fund), or direct support to the
government's budget.
The third, of which the Global Fund is a prime example, is a hybrid
- it's "multilateral plus vertical." When donors prefer bilateral
and/or horizontal interventions, the Fund loses out. Furthermore,
some donors may claim that their reason for not yet giving more to
the Fund is that they are waiting to see increased proof of the
Fund's success, when the real reason is that they are leaning
towards a more horizontal and/or a more bilateral approach, or that
they not yet have made up their minds and wish to keep their
options open.
The Fund seeks to obtain its governmental funding through a
"voluntary replenishment mechanism." The problem with voluntary
and relatively ad hoc donations to the Fund is that recipient
countries that wish to scale up health programs, particularly
programs involving antiretroviral treatment, need secure and
long-term financing. For the Fund to provide this, it must have
financing of its own that is equally secure and long-term. Relying
on voluntary contributions makes the Fund - and its recipients -
vulnerable to changing donor priorities, economic uncertainties or
donor fatigue. The Fund was left to its own devices to develop a
replenishment mechanism, yet the mid-level officials who serve on
the board have always been deeply reluctant to discuss the funding
challenges, and there have been few precedents to follow.
One proposal for raising the money needed by the Fund was suggested
over three years ago by this author and others. Called the
Equitable Contributions Framework, this was a formula whereby donor
governments would accept a moral obligation to finance the Fund's
declared needs and would contribute in proportion to their ability
to pay - that is, in proportion to their share of the global
economy.
The Fund's secretariat, after regarding this concept as something
of a hot potato, has now adopted and indeed enhanced it as an
analytical framework that it offers to donor governments for their
consideration. It's hard to know to what extent this influenced
the donors' thinking; but it is gratifying to note that Japan,
which until recently gave far less to the Fund than was recommended
by the Equitable Contributions Framework, has now taken a major
step towards giving its "fair share."
The U.S. currently finds itself in an awkward position regarding
the Fund. For the last couple of years the U.S. has had
legislation in place saying that it will give no more than
one-third of the total contributions received by the Fund
(one-third being the U.S. share of the world economy). Taken
literally, just one dollar would have met that commitment. But
fortunately, the U.S. has thus far treated this one-third not as a
cap, but as a goal for which there is some kind of moral
commitment; and through fiscal year 2005, the U.S. has indeed given
one-third.
However, the increased amounts pledged to the Fund for 2006+7 by
non-U.S. donors mean that for the U.S. to continue contributing
one-third, it will have to give at least $1.5 billion over 2006 +
2007. President Bush proposed giving the Fund $300 million for
fiscal 2006, the House of Representatives has called for $400
million and the Senate, for $600 million. At present, it looks as
if the outcome will be between $450 and $550 million. Unless this
amount is dramatically increased in fiscal 2007, the U.S. will for
the first time be providing significantly less than one-third of
the Fund's total contributions.
Another major disappointment has been that despite the Global Fund
being a "public-private partnership," nobody has found a way to
persuade the private sector, or foundations other than the Gates
Foundation, to contribute substantial amounts of money. These
donors, like most, prefer to point to the specific impact that
their own donations have made; but that is not easy when all
donations have to be placed, without "earmarking," into a
multi-billion-dollar pool before being disbursed. Accordingly, the
private sector prefers to provide in-kind gifts, but rather than
confront the tricky challenge of determining which gifts would be
acceptable and which would not, the board has declined all such
gifts.
The Fund was intended from the beginning to be innovative, and
innovators always face unanticipated challenges. What separates
successful from unsuccessful innovators is how quickly they
recognize, candidly discuss, and then find ways of surmounting
these challenges.
Where the Fund goes from here depends very much on the board.
However, board members representing donor governments are
understandably hesitant to discuss why their governments are not
giving more money; and board members representing
developing-country governments are equally hesitant to discuss why
some grants are in trouble. Furthermore, each of these two groups
is diplomatically hesitant to push the other. As a result, the
core factors that inhibit the Fund's growth are rarely discussed in
any detail at board meetings.
The best option for achieving a breakthrough at the board level may
lie, therefore, with the five civil society board members,
representing NGOs from developed and developing countries, people
living with AIDS, foundations, and the private sector. If they can
proactively and collectively propose solutions that acknowledge and
offer ways round the challenges that the Fund currently faces, the
Fund might have a chance to resume growing towards the scale of
operations that Kofi Annan originally envisaged.
[Bernard Rivers ([email protected]) is Executive Director of
Aidspan (http://www.aidspan.org), an NGO watchdog of the Global
Fund, and Editor of Aidspan's Global Fund Observer. He has had
observer status at all board meetings since June 2004.Note: The
above article is an extended version of the author's "'Raise it,
Spend it, Prove it': The Global Fund's Approach to Financing the
Fight Against AIDS," published in the November/December issue of
Global AIDSLink, a newsletter of the Global Health Council. GHC
members can access all issues of AIDSLink at
http://www.globalhealth.org/publications. The November/December issue,
which focuses on the funding of AIDS programs, is also posted, with
permission, at http://www.aidspan.org/gfo/docs/aidslink94.pdf.
GFO is an independent source of news, analysis and commentary about
the Global Fund to Fight AIDS, TB and Malaria (http://www.theglobalfund.org). GFO is emailed to 9,000 subscribers
in 170 countries once to twice a month.
Aidspan and the Global Fund have no formal connection, and Aidspan
accepts no grants or fees from the Global Fund. The board and staff
of the Fund have no influence on and bear no responsibility for the
content of GFO or of any other Aidspan publication.]
AfricaFocus Bulletin is an independent electronic publication
providing reposted commentary and analysis on African issues, with
a particular focus on U.S. and international policies. AfricaFocus
Bulletin is edited by William Minter.
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