Summary *
1. The Challenge *
2. How much money is needed? *
3. How much money is currently going to AIDS in Africa - and how large is the gap? *
4. How can the billions be raised for AIDS in Africa? *
4.1 Guiding principles *
4.2 A funding plan *
4.3 A basis for optimism *
5. What are the key mechanisms, existing or new, that are needed to mobilize billions for AIDS in Africa? *
6. Proposed next steps in resource mobilization – what can African leaders do? *
7. Conclusion *
Annex: Scenarios for Domestic Financing of HIV/AIDS Programs in Africa *

SUMMARY

A vastly expanded and well-funded multi-billion dollar response is needed to change the course of the HIV/AIDS pandemic in Africa, through effective prevention, care and impact mitigation. The growing awareness of AIDS’s devastating impact and increasing political commitment provide a new opportunity for huge increases in funding and in the scale of the programmatic response to the pandemic. African leadership and financial commitment are required to meet this challenge, notwithstanding the weak fiscal situations in many of the worst affected countries in Africa. In this context, a major share of the required funds will have to come from external sources.

There remains today a huge gap between the estimated annual needs of $3-4 billion for HIV/AIDS and current annual expenditures of $0.3-0.4 billion.

Based on a preliminary examination of available data, it is proposed that the needs of Africa be met through a combination of increases in domestic and external financing.

On the domestic side, it is suggested that an amount of $0.8 to $1.6 billion could be mobilized, equivalent to 0.25-0.5 percent of GDP or 1-2 percent of what governments in Africa are currently spending.

The balance of $1.4 to $3.2 billion would be met through a combination of external grants (preferably) and concessional lending.

In this paper, indicative financial targets are proposed for the main institutions providing external support to HIV/AIDS in Africa – bilateral governments, multilateral banks, charitable foundations, and private companies – that together add up to about $2.5 billion annually.

Achieving these targets for increased financing from African governments and from external sources over the next three years is feasible, if all partners act simultaneously and cooperatively to mobilize the ten-fold increase in resources required.

There remains the need to develop rapidly the capacity of African institutions to use expanded financing for HIV/AIDS effectively. In this paper it is suggested that capacity building would be undertaken as part of the significant increase in funding, not as a precondition for it.

With explicit political commitment, backed by the allocation of domestic financial resources and major increases in external funding, Africa can make rapid progress to reverse the course of HIV/AIDS on the continent.

1. The Challenge

The challenge of HIV/AIDS in Africa is clear: reversing the course of the pandemic is central to sustained development, the future of millions of children and the security of societies. Underlying the human disaster are the grim statistics. In Africa, the impact of the HIV pandemic has been enormous: since HIV was first detected in the continent in the early 1980s, more than 17 million persons have died from AIDS. In the year 2000 alone, about 2.4 million Africans succumbed to AIDS, and another 3.8 million became infected with the HIV virus. AIDS is now the leading cause of death in Africa. The pandemic is cutting down nations’ economic growth rates, hurting the performance of public services and private companies, and impoverishing millions of families. It is rolling back hard-won social gains in human development, including life expectancy, income and education.

A sustained campaign on a vast scale, building on pockets of success, is needed to reverse the destructive tide of HIV/AIDS in Africa. Such a campaign would include a broad range of actions to prevent new infections, care for the infected, and mitigate the negative impacts of the pandemic – all underpinned by expressions of the highest political will and by the commitment of substantial sums of money.

• Such a campaign to stop AIDS in Africa will cost literally billions of dollars every year for the next decade or more, as compared to a few hundred millions currently being spent to combat the pandemic.

• Where will such an increased level of funding come from? How will it be organized? What can African leaders do now to secure this vastly higher flow of financial resources for AIDS? And what can the rest of the international community do to help?

This short paper outlines the case for billions of dollars for AIDS in Africa, puts forward a bold but achievable financing plan for mobilizing resources on such a scale, and points to a number of the actions that need to be taken today to implement large-scale resource mobilization for the fight against AIDS.

2. How much money is needed?

Recent analysis suggests that $3-4 billion are needed annually to finance a large-scale assault on HIV/AIDS in Africa, every year from now and for a decade or more to come.

With this level of funding, African countries could implement a range of activities that have been proven to be effective in AIDS prevention, care, and support, including the provision of anti-retroviral therapies to a substantial part of the HIV-infected population who can be reached in the coming years (see below for a listing of activities included in these estimates).

Because of the uncertainties about both exact unit costs and levels of achievable coverage, funding requirements are expressed as ranges of numbers rather than as a single figure.

The amount of $3-4 billion a year would include:

• $1-1.6 billion for AIDS prevention activities: interventions focused on young people, sex workers and their clients (e.g., peer counseling, information, access to condoms); condom social marketing and public provision; better treatment of sexually-transmitted infections; voluntary HIV testing and counseling; prevention in places of work, including for the military and for transport workers; measures to protect the national blood supply; prevention of infection from mothers to their newborn; and mass media campaigns.

• $1-1.3 billion for AIDS care and support, excluding anti-retroviral therapy: palliative care; treatment in hospitals and clinics of so-called "opportunistic" infections of HIV-positive persons (e.g., tuberculosis, diarrhea, skin rashes); home and community-based care; education and nutrition support for children orphaned by AIDS; and psychosocial support and counseling for infected persons and their families.

• $0.8 to $1.2 billion for anti-retrovirals (ARV), using the substantially lower prices for triple therapy recently announced by a number of the leading pharmaceutical manufacturers, including patent-holders and generics manufacturers.

• $100-200 million for strengthening national AIDS coordinating bodies and African centers of excellence in AIDS research, training, and surveillance.

The experience of the few countries that have already scored important nationwide successes in fighting HIV/AIDS shows that the benefits of such a multi-billion dollar investment in a large-scale response to the pandemic in Africa would be huge. Millions of infections would be avoided and lives saved. Additional millions already infected with HIV would have a chance to live longer and healthier lives – currently, over 25 million Africans are living with the HIV virus. Millions of children who would otherwise be unable to attend school or would not receive strong parental support and guidance because of AIDS, would have their chances for a good education and a stable and nurturing home environment restored to them. Annual economic growth rates would be up to 2 percent higher, and African countries’ capacity to fight poverty would be greatly enhanced.

3. How much money is currently going to AIDS in Africa - and how large is the gap?

Unfortunately, the gap between the $3-4 billion needed annually for AIDS in Africa, and current funding going to AIDS programs, is very large. While the numbers on actual AIDS funding are imprecise, it appears that African countries are today spending $300 to $400 million a year for AIDS. This is less than 10 percent of what is required.

These numbers are discouraging. In 1996-97, a total of $165 million was spent on AIDS programs in Africa. Of this, $150 million came from external sources (donor agencies, multilateral banks, and United Nations organizations), and $15 million was from African governments.

Estimates from a survey of donor countries last year suggest that external funding for AIDS in Africa may have risen to around $210 million in 1998. Further increases over the past two years have brought total expenditures on AIDS to $300-400 million a year in 2000, and recent new financial commitments (see below) suggest that actual disbursements will also rise in the coming years. But a much larger "quantum leap" in funding will be needed to close the gap, which was allowed to widen in the 1990s.

In order to make the very large jump in funding for HIV/AIDS in Africa, a series of broad principles of shared responsibility is essential for cooperation between African governments and all the other parties involved. These principles include the following:

• Billions can only be mobilized if a broad coalition of partners is formed, comprising African governments, bilateral agencies, multilateral development bank, foundations, private corporations, NGOs, and other civil society groups. All of these institutions must make a major financial contribution. The International Partnership Against HIV/AIDS in Africa (IPAA) provides a framework for joint action by such a coalition of groups.

• African governments would take the lead in allocating some of their own public funds to AIDS, to demonstrate their commitment to the fight against AIDS. In other words, the first commitment, no matter how small, would come from African public budgets.

• It is suggested that, as a rule of thumb, African countries consider devoting a target percentage of national wealth or budgetary resources to AIDS. These percentages, which would have to be determined by African policy experts and endorsed by African leaders themselves, could relate to Gross National Product, public spending, or other similar indicators. The percentages might also vary with factors such as the level of HIV infection in the country and the level of national income per capita. A realistic but meaningful target would be to have African countries allocate 1-2 percent of their central government budgets to HIV/AIDS (see below).

• The external contribution to the AIDS financial resources pool should reflect the principles of equity and burden sharing among donor countries, with the richer countries contributing more. Similarly, the proportion of external funding for AIDS in various African countries should vary with the level of economic development. In this regard, the share of external funds to poorer AIDS-afflicted recipient countries would increase, thus reducing the need for greater domestic resources, which are very scarce. In the same vein, the share of external resources going to middle income countries, which are in a stronger position to raise domestic funds, would be proportionately lower. Implementation of such principle would, of course, need to appropriately reflect national differences in the incidence of the epidemic and therefore the magnitude of the task at hand.

• Given political will, all these needs for significant external support from the wealthier countries are clearly affordable, as evidenced by the massive commitments of the rich nations to reconstruction and stabilization in Southeastern Europe, to cite only one example. Yet, the human tragedy of the Balkan wars is, in relative terms, a minor one I comparison with the deaths of millions from AIDS in Africa.

If these principles of shared responsibility are observed, a bold, ambitious and realistic plan for funding the response to HIV/AIDS in Africa can be put together. It is crucial for African leaders to come together and set targets for their own financial contribution to such a $3-4 billion dollar effort, while encouraging the other partners to commit to quantified targets. In this way, a realistic financing plan can be established and monitored, with joint responsibility and accountability.

4.2 A funding plan

Based on a preliminary examination of available data, it is proposed that the needs of Africa be met through a combination of increases in domestic and external financing.

On the domestic side, it is suggested that an amount of $0.8 to $1.6 billion could be mobilized, equivalent to 0.25-0.5 percent of GDP or 1-2 percent of what governments in Africa are currently spending.

The balance of $1.4 to $3.2 billion would be met through a combination of external grants (preferably) and concessional lending.

Taking into account the financing capacity of the different parties, it is suggested that these objectives could realistically be reached over the next three years.

African governments could contribute their share by allocating just one to two percent of current central government revenues (see Annex 1 for details). For HIPC debt relief countries that are striving to expand their spending on poverty-reduction activities including HIV/AIDS, a related target would be to set aside at least 20 percent of budgetary savings from debt relief for AIDS. For the 18 African countries that have already concluded HIPC agreements, this amounts to about $260 million a year. An additional 14 African countries could reach HIPC agreements in the near future.

To match the external funding requirements proposed above, a range of public and private institutions already actively involved in HIV/AIDS would be called upon to boost their support. Possible targets to be considered include:

• $1.1 billion a year in grants from bilateral governments, or about 4 percent of Overseas Development Assistance (ODA) available for sectoral purposes, as defined by the Development Assistance Committee of the OECD. The DAC reports that this share of ODA amounted to $27 billion in 1999, the latest year for which figures are available, of which about one percent of this total (or $270 million) allocated to HIV/AIDS globally including Africa. In other words, ODA for AIDS in Africa would increase by more than fourfold under this scenario.

• $600 million a year from multilateral banks in grants (preferably) and low-interest loans. As a point of reference, total concessional loans of the World Bank’s International Development Association (IDA) amounted to $4.4 billion last year, while loans and grants from the African Development Bank stood at $1.2 billion in 1999.

• $250 million a year in grants from charitable foundations and international NGOs. A broad grouping of US-based foundations reportedly made $2.5 billion in grants in 1999. Only about 1 percent of this was for HIV/AIDS. A number of these foundations have indicated that they wish to increase their funding for AIDS in Africa substantially over the next few years.

• $500 million annually from corporations in in-kind contributions and grants. While complete worldwide information on business contributions for social purposes is not available, it is clear that such corporate "giving" is a multi-billion dollar activity. A recent survey revealed that the 50 U.S.-based publicly traded corporations giving the most to charity in 1999 made over $2.7 billion in cash and in-kind contributions.

If each of the above financial targets was achieved, a total of $2.5 billion could be generated from external sources for HIV/AIDS in Africa, thus meeting the overall proposed objective for external financing.

4.3 A basis for optimism

There are a number of recent encouraging signs that suggest that substantially more funds can be raised for AIDS in Africa.

• Among African governments themselves, there is a growing willingness to allocate budgetary resources to the national AIDS program. Information from a sample of eight low income countries that have recently concluded debt relief agreements under HIPC suggest that they are together budgeting $30 million for AIDS activities from their HIPC savings this year. Another four countries operating outside of HIPC have allocated over $80 million of budgeted domestic funds for AIDS this year, compared to less than $20 million in 2000. More complete data on funds budgeted and spent by African governments on HIV/AIDS is urgently needed.

• Bilateral aid agencies as a whole are also boosting their grant financing for AIDS in Africa. There have been notable increases in funds available for commitment over the past two years from a number of countries including the United States (from $160 million in 1998 to $460 million), Canada ($15 million to $22 million), the United Kingdom ($26 million to $41 million), and others. Further increases are expected this year.

• Multilateral banks, including the World Bank and the African Development Bank, have launched initiatives to expand their financial assistance for AIDS in Africa. The World Bank is in the process of committing $500 million to more than a dozen African countries under the MultiCountry AIDS Program (MAP) in less than 12 months, between September 2000 and July of this year. The Bank is using highly expedited procedures to approve MAP projects and transfer funds to African countries. The African Development Bank has recently approved an AIDS project for Zambia and others are in the pipeline.

• The charitable foundations and international NGOs are showing a renewed interest in supporting AIDS activities in Africa. Concrete examples: the UN Foundation, using resources bequeathed by Ted Turner, has recently approved nearly $30 million for AIDS prevention among adolescent girls in eight countries in Southern Africa. The Bill and Melinda Gates Foundation has approved more than $100 million for vaccine research, capacity building, and AIDS prevention activities in Botswana, Nigeria, and other African countries.

• The potential of private corporations in Africa, including both national firms and multinationals, is just beginning to be tapped in the fight against AIDS. A few companies have put in place excellent AIDS education, prevention, and care programs for their own workers. In countries like Zambia, major private employers have come together under "national business councils against AIDS". And a few major firms are actively seeking ways to use their other non-financial strengths – for example, their marketing and communications infrastructure and skills – to assist national AIDS efforts in Africa.

5. What are the key mechanisms, existing or new, that are needed to mobilize billions for AIDS in Africa?

To mobilize a high level of funding on a sustained basis for AIDS in Africa, a series of mechanisms must be put in place:

• On the political plane, continuation of strong high level political advocacy and consensus building is needed, demonstrating strong resolve by African political leaders and equally strong commitment from external partners to join them in fashioning a multi-billion dollar financing plan. A set of important high level meetings during 1999-2000 and this year, beginning with the ECA-hosted meeting of Ministers of Finance and Planning in Addis Ababa in May 1999, the International Conference on AIDS in Africa (ICASA) in Lusaka in October 1999, the global Durban AIDS Conference in June 2000, the African Development Forum in December 2000, and culminating in the Abuja African Heads of State Summit on AIDS in April 2001 and the UNGASS in June of this year, provide a series of forums for building overarching political support.

• On a more technical front, African national strategic AIDS plans must remain the fundamental documents for mobilizing increased financial support for countries. These plans can be improved, including a more complete and accurate costing of the strategies and actions proposed in them. Donor roundtable meetings of the kind held in a number of African countries last year offer one way of selling a common financial plan for AIDS to a wide range of partner organizations.

• At the same time, resource mobilization at national level can be enhanced through the establishment of a global AIDS fund. Such a fund is currently under active discussion. It could have several special features that contribute hundreds of millions of dollars in additional financing for national AIDS activities, thus helping to close the funding gap. The scope, governance, and operating modalities of a global AIDS fund will have to be refined and agreed by all the major parties involved. A global AIDS fund would back actions at country level as proposed in national AIDS plans, and would add to financing flowing from donor agencies to African countries, avoiding any conflict with priorities set by individual governments.

• Finally, a successful and sustained resource mobilization effort for HIV/AIDS will depend on having a strong monitoring and evaluation system in place. This is important for ensuring that individual countries can track with accuracy and speed the flows of committed and disbursed funds. Beyond this, honest and transparent evaluation of the uses of funds and their impact in curbing the HIV pandemic is also crucial in maintaining the credibility of the entire effort.

Creating a strong financial monitoring and evaluation system for AIDS in Africa will mean bringing together a number of current systems, such as the OECD’s donor reporting system, the public expenditure tracking systems of the IMF, and others for the private sector including businesses and charitable organizations (foundations). Such a system will need cooperation and technical support from a number of institutions with monitoring capacity in this area, including the World Bank, the Economic Commission for Africa, and UNAIDS, under the auspices of the IPAA.

6. Proposed next steps in resource mobilization – what can African leaders do?

Mobilization of $3-4 billion a year for AIDS in Africa will require exceptional leadership from many quarters, starting with Africa’s own national leaders. Vital steps for African leaders include:

• Ensuring the timely completion of high quality AIDS strategic plans that spell out the main lines of proposed action for the country and estimate the financial resource needs over a 3-5 year period. Over the past two years, more than 25 African countries have finalized comprehensive AIDS plans, using a standard methodology developed by UNAIDS. Some of these plans, but not all, contain detailed cost estimates. Where the costing is insufficient, this should be urgently addressed. At the same time, the other African countries need to complete their own national strategic AIDS plans this year and next, as a compelling basis for resource mobilization. This work will normally be the responsibility of the head of the national AIDS council or program.

• Integrating HIV/AIDS fully in national Poverty Reduction Strategy Papers (PRSP) and debt relief agreements under the Heavily Indebted Poor Country (HIPC) initiative. The close links between AIDS and poverty are increasingly being analyzed and understood (footnote AIDS, Poverty Reduction, and Debt Relief, 2000). Thus, the main lines of action in the national AIDS plan and the key performance indicators need to be viewed as central poverty-fighting strategies and indicators for each country, to be inserted prominently in the PRSP. Similarly, the HIPC debt relief agreements in countries seriously affected by HIV/AIDS should contain important milestones in the implementation of the national AIDS program, as well as commitments to allocate part of the debt relief savings to overall AIDS program costs. In most countries, making HIV/AIDS a prominent part of PRSPs and HIPC will depend on leadership from the ministry of finance, with strong input from the national AIDS council or similar body.

• Committing significant national funding to the national AIDS plan from domestic budget resources, along the lines proposed above. This will include both regular budget funds and earmarked savings from debt relief and other special levies, where these exist. Beyond the budget proposals on AIDS currently being put forward by ministries of finance in a number of African countries, real actions to combat HIV/AIDS with public funds will depend on legislatures approving these budget submissions and on finance authorities then releasing the monies to be spent by government and NGO agencies.

• Carrying out a fund-raising campaign at national level, targeting internal private (corporations) and external partner organizations, using roundtable meetings and other devices, to mobilize the resources required for the national AIDS plan. Resource mobilization campaigns, led by the ministry of finance, have recently been conducted in several countries in Southern Africa. More can be done in this area.

• Strengthening capacity at national and local level to absorb and utilize the additional financial resources effectively to fight HIV/AIDS. This will involve improving the AIDS-related planning and implementation skills of a range of government ministries, including health, education, transport, agriculture, and defense, as part of a multi-sectoral approach. At the same time, the national AIDS coordination bodies, some of which have only recently been established in Africa, will have to gear up rapidly to take on the tasks of fundraising and catalyzing implementation on a scale many times greater than in the past. Experience from countries that have been relatively more successful in fighting the pandemic suggests that capacity to use increased resources effectively also depends on actively enlisting NGOs and community groups, and building funding mechanisms that channel monies as directly as possible to local initiatives. Given the urgency of the HIV/AIDS crisis in Africa, it is proposed that capacity building would take place simultaneously with a significant increase in funding, and not as a precondition for such financial mobilization.

• Putting in place in each country a strong national AIDS financial monitoring and reporting system, with good transparency and accountability. A number of African countries are in the process of setting up quasi-independent oversight boards to monitor the use of government and donor funds under the Heavily Indebted Poor Country (HIPC) debt relief initiative. A similar oversight mechanism might be appropriate for funds flowing into AIDS activities, as these funds can be expected to increase substantially in the coming years. Again, leadership from both the ministry of finance and from the national AIDS body, as well as close collaboration among the two parties, will be required to successfully implement an AIDS financial monitoring system.

At the same time, African leaders retain the responsibility as prime advocates for a larger effort to mobilize $3-4 billion for AIDS for the continent as a whole. This means participating actively in the UNGASS on HIV/AIDS in June of this year, shaping the main declaration and speaking out on the resource issue at the Special Session itself, in plenaries and in round-tables. African leaders must also be at the forefront in shaping global initiatives aimed at expanding the financial resource envelope for AIDS, including a possible global AIDS fund and a private sector campaign for expanded involvement in fighting AIDS in developing countries.

The external funding institutions, for their part, also have a major obligation to search for ways to simplify their financial approvals, disbursement, and reporting procedures so that they do not end up creating additional bottlenecks to the efficient use of expanded resources against HIV/AIDS.

7. Conclusion

There is no doubt that $3-4 billion a year for AIDS programs in Africa will not solve the HIV/AIDS problem. There are a number of other non-financial obstacles that must also be overcome – continued denial; stigmatization of those infected with HIV; limited capacity of education, health, and information systems to reach people; and important gaps in technical and managerial capacity to plan, implement, and evaluate AIDS activities. These non-financial obstacles must be tackled with strong resolve and imagination.

On the other hand, there is little doubt either that a large scale and sustained assault on the HIV pandemic in Africa cannot be mounted without major increases in financial resources. The target of $3-4 billion is ambitious in relation to current levels of spending, which amount to just a modest fraction of the desired multi-billion dollar figure.

But then again, $3-4 billion a year is a small investment to make if it can help to save millions of lives and potentially safeguard a continent’s future. It is an investment that African governments and the world community must make, and make with special urgency.