How innovative financing can support national health policies in Africa

* This article is brought to you by Global Voice Group

By Joseph Narcisse, economic journalist

According to the World Health Organization (WHO), HIV/Aids, diarrheal diseases, malaria and tuberculosis are among the infectious illnesses that cause the most deaths in low-revenue countries, especially in Africa. They are responsible for almost a third of deaths in these countries.

At the end of April 2001, the African heads of state met in Abuja to find ways of fighting HIV/Aids, tuberculosis and other related infectious diseases. At the end of this extraordinary summit, the heads of state agreed to allocate at least 15% of their total budget to the health sector each year. Since, the WHO said it had noticed progress in some African countries, as the latter increased their internal financing to reach Abuja’s objective.

World_Health_Organization_Flag
World Health Organization Flag

Despite the fact that the donor countries have not honored their commitment to dedicate 0.7% of their gross national product (GNP) to official development aid, the WHO pointed out that Rwanda and South Africa had nevertheless managed to exceed 15%. However, a number of analysts fear that the dwindling funds from international donors and the allocation of limited internal resources to the most urgent needs may compromise this progress and prevent other countries among the poorest of the continent to follow the example of those that have managed to achieve Abuja’s objective, like Rwanda and South Africa.

Stimulating innovative financing

Many recommendations have been made as regards the way in which the internal financing of the health sector could be enhanced. The experts of Addis Ababa’s “Third International Conference on Financing for Development” called upon the African countries that depend on donor funding to carry out their health development programs to identify sustainable alternatives, preferably based on their own resources, without any further delay.

According to the WHO’s estimations, African countries should dedicate a minimum amount of 86 dollars US per year to the provision of essential healthcare. Participants in the colloquium on “National health financing in Africa” provided examples of tools and explained how to use these efficiently to support the governments’ health expenditure.

A report jointly published by the WHO and UNICEF revealed that it would be necessary to triple the sums allocated each year to the fight against malaria, from 2.7 billion dollars US currently to 8.7 billion, for this fight to be successful. In 2015, according to the same report, 89% of malaria cases and 91% of malaria-related deaths were recorded in Sub-Saharan Africa.

In order to stimulate the internal financing of healthcare in Africa, the stakeholders recommended, among other measures, that the national health budgets should be increased in order to achieve the objective of the 15% that was agreed upon in Abuja, and that the innovative mechanisms for the financing of healthcare should be enhanced. 

The model facilitated by Global Voice Group

Essentially, the innovative financing model for development facilitated by Global Voice Group (GVG) allows for the diversification of the state’s tax collection system, and for the widening of the tax base. It can therefore lead the way in the quest to stimulate the domestic revenue of developing countries. This model has been successfully used in about 10 African countries for more than a decade.

Guido Schmidt-Traub, Executive Director of the UN’s “Sustainable Development Solutions Network”, pointed out that the African countries that wished to respect the Declaration of Abuja – which requires them to dedicate 15% of their annual budget to health – could only mobilize 30 of the 86 dollars US per capita required to cover health expenditure.

Concerning the mobilization of tax resources, the African continent still has a long way to go. From 70 to 80% of the African populations live in rural economies and only 20% of those who are officially employed pay taxes, says Dr Mustapha Sidiki Kaloko, the African Union’s Commissioner for Social Affairs.

Far from replacing the State’s domestic revenue, or the Official Development Aid, GVG’s unique expertise in the governmental control of telecom-related data for regulation and revenue-optimizing purposes clearly shows how these additional revenue streams can be used as a complement in the quest to increase internal healthcare financing in Africa.

A micro-surcharge equivalent to a few dollar cents applied to the telephone traffic volume generated by more than one billion subscribers on the continent as at end 2014 (Source: The Ericsson Mobility Report, Mobile World Congress edition, February 2015) would greatly help the countries involved in the Declaration of Abuja to honor their commitment to allocate, each year, at least 15% of their total budget to the health sector.

 

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