I’ve been told many times that South Africa has the finances to fix its own problems. But one of the challenges, which is well highlighted, is most of the money ends up in corrupt hands, rather than those that really need it. And while the battle against this cancer has begun, there’s a long way to go yet. Kate Fieldman offers an alternative method to alleviating one of the biggest challenges in South Africa, poverty. And she wants to use creative Innovative Financing for Development programmes to eradicate it, as no child should go to bed hungry. She lays out some previous successful examples of IFD, as a base for future projects. – Stuart Lowman
By Kate Fieldman*
The vast majority of the world’s hungry people live in developing countries where 12.9 percent of the population is undernourished. Sub-Saharan Africa is the region with the highest prevalence of hunger. One person in four there is undernourished.
Though South Africa does produce sufficient food for its population, skyrocketing prices prevent the poor from obtaining adequate nutrition. People are simply too poor to buy adequate nutritious food. The key micronutrient deficiencies are Vitamin A, iron and zinc.
Despite the expansion of social grants and the introduction of school feeding schemes, millions of children in South Africa still go hungry. Poverty, deprivation and inequality will have a major effect on the country’s next generation unless programmes are put in place to ensure young children have access to better nutrition and health and grow up in stimulating environments. Some key facts are:
- 3 million children in South Africa live with household hunger
- Malnutrition is associated with more than half of all childhood deaths
- Stunted mental and physical growth due to malnourishment in the first 1000 days of life is mostly irreversible
- Large numbers of children die annually from infections that would not have been fatal had they been properly nourished
- The lives and vision of thousands of children would be saved merely by increasing access to vitamin A and zinc
- Hunger kills more people every year than AIDS, malaria and tuberculosis combined
The South African government has already identified food security as a “critical challenge” and the country’s health authorities are making efforts to fight malnutrition. A number of nutrition interventions by various government departments aimed at improving nutrition interventions for children from conception up to the age of five was approved by the South African government.
Innovative Financing for Development can help the government ensure that nobody goes hungry
Innovative Financing for Development (IFD) has become increasingly important viewed against the bleak background of the global economic crisis, weakening financial systems, development assistance falling far short of internationally agreed targets and continuing hunger, poverty, and disease in emerging and developing countries. The United Nations Secretary-General, Ban Ki-Moon, has urged developing countries to find alternative sources of financing to Official Development Assistance (ODA).
One of the first IFD initiatives was the international solidarity levy on air tickets (or airline ticket tax). Launched in 2006 by the governments of Brazil, Chile, France, Norway and the United Kingdom, most of the resources raised through the airline ticket tax are channelled into UNITAID, an agency founded specifically to channel these resources into the treatment and care of those affected by HIV/AIDS, tuberculosis and malaria. UNITAID plays an important part in the global effort to fight and defeat these diseases by facilitating and speeding up the availability of improved health tools, including medicines and diagnostics.
Read also: United Nations: Drought sees 14m face hunger in Southern Africa.
Through the airline ticket initiative, UNITAID raised $1.8 billion in 7 years to support projects related to drug resistant tuberculosis, HIV/AIDS, anti-malarial treatments and preventative measures
The above is just one example of the power of IFD and what a game-changer it can be for sustainable development. IFD can be applied to any development priority and through the IFD approach, governments can be assisted to achieve their development goals in line with their own national priorities and needs. The process consists of identifying new sources of revenue and then managing, leveraging, unlocking and protecting these revenues through appropriate ICT systems
Revenues are generated through the comprehensive collection of micro-contributions in key sectors offering the best opportunities in terms of volumes and growth. One example is telecommunications but there are many others.
A micro-contribution makes a mega difference
A micro-contribution applied to globalised sectors some of which are: telecommunications, travel and tourism, financial transactions, minerals and mining—creates a new revenue stream as a funding boost for the government—using local resources which do not depend on foreign aid or debt mechanisms. There are many potential sources of revenue that could be exploited. This approach creates a funding boost for the government—using local resources which do not depend on foreign aid or debt mechanisms. It is advocated by the United Nations Special Advisor for Innovative Financing for Development, Philippe Douste-Blazy and in keeping with the stance of the International Monetary Fund (IMF) and the World Bank.
Read also: Hunger strikes Southern Africa. El Nino decimates crops, livestock.
Collecting micro-contributions from enormous volumes of transactions involves complex data collection and processing systems. It also involves cost-effective fraud management systems to keep cost collection as low as possible, ensure optimal profitability and prevent fraudsters from evading the new micro-taxes or taking advantage of them through grey markets to line their own pockets.
The South African government can be powered up to face its poverty alleviation challenge by harnessing the power of telecommunications and other globalised activities and protecting the revenues gained from these activities. The revenues from the IFD model, which has been successfully applied in many other countries, have been used inter alia, to finance infrastructure, to improve security, to improve the lot of the very poor, to improve communication and to combat the diseases which are prevalent in developing/emerging countries.
Providing a comprehensive poverty alleviation programme to eradicate poverty in South Africa will require a huge injection of funds to meet the significant challenges. IFD can help address the ever-present funding issue, by generating significant new revenue streams that can be used to finance some specific, well implemented and coordinated poverty alleviation initiatives.
Some examples of poverty alleviation initiatives are:
- a quality well-coordinated, universal school feeding scheme
- education and extension programmes to assist the poor to cultivate nutritious crops
- well-organised and regulated community vegetable gardens
- extended initiatives to encourage vegetable gardens at schools
- a programme to provide agricultural inputs (seed, fertiliser, seedlings) to the poor
- any other innovative ideas for poverty alleviation (a country like Brazil has implemented some creative examples)
Through creative IFD programmes and by implementing the appropriate revenue assurance systems, the government of South Africa can face the challenges of poverty alleviation with confidence in a tried and proven process and in a sustainable way. Poverty could become a thing of the past. No child should have to face the day hungry.
- Kate Fieldman is an independent corporate writer. She is an expert in innovative financing, and writes about companies at the forefront of innovation.
