Is the Global Fund Really Worth $5 Billion?

Donors and health advocates may have struck Global Fund gold last week. The UK announced $1.6 billion for the Global Fund’s Fourth Replenishment, which will cover the 2014-2016 period. This followed a $750 million pledge earlier in September from Nordic countries. All of these actions are intertwined to leverage $5 billion from the United States (and vice versa) over the next three years. Secretary Kerry is then supposed to deliver the final step of the highly choreographed plan this December – the Global Fund’s ultimate $15 billion financing target.

While other donor governments continue stepping forward, US politicians must decide whether the Global Fund deserves such generosity. Honestly, it’s been making a pretty compelling case, such as:

• Providing over 5 million people with receiving antiretroviral (ARV) therapy to treat HIV as of July 2013.
   
• Detecting and treating nearly 11 million tuberculosis cases since its inception in 2002.
   
• Distributing 340 million insecticide treated nets to protect families from malaria and treating over 330 million cases of malaria since 2002.

To increase the drumbeat, the Global Fund has enlisted strong support from African leaders, UN Secretary General Ban Ki-moon, and celebrities like Charlize Theron and Annie Lennox. Plus, it’s implemented a long list of changes over the last two years – like overhauling its allocation model and reorganizing its staffing structure. All in all, Mark Dybul and his team have done a really impressive job. Particularly when you think about where the Global Fund was only 20 months ago.  

So case closed, right? Well, maybe not. There are still a few critical issues that should be addressed before the US and other donors formally sign on the dotted line: 

• The Global Fund Takes Credit Where It’s Probably Not Due: Amanda Glassman, Victoria Fan, and many others have raised concerns for some time about how the Global Fund tracks results (see here and here). But, there’s a more fundamental problem. The go-to numbers cited above are based on intellectually indefensible assumptions. Based on my reading of their results methodology, if Global Fund disbursements account for 15% of total HIV/AIDS spending in a given country, then it can claim credit for 100% of the ARVs distributed there. Yes, you read that right. And yes, that’s a very difficult claim to swallow. And unfortunately, this means that the really impressive numbers being used to justify a massive Global Fund replenishment are likely wild overestimates. [Note – this isn’t just a Global Fund problem. PEPFAR and other programs have the same reporting deficiencies.]
   
• Global Fund Contributions Are Eating Other Priorities’ Lunch: The Global Fund is now the largest multilateral recipient of US funding – larger than IDA and nearly 9 times larger than the African Development Fund (AfDF). In the current flat or declining budgetary environment, the US Congress has cut other programs to make this happen. Granted, some might deserve to lose out in a zero-sum game. But, others – like IDA and the AfDF – have scored better on institutional effectiveness measures (like QuODA). So, why are they being cut to make room for a relatively less effective vertical fund?
   
• Many Developing Countries Aren’t Putting Enough Skin in the Game: Nearly everyone recognizes the need to transfer health entitlements (like ARVs) to developing country governments over the near- to medium-term. And a few countries seem to be stepping up – such as South Africa, Rwanda, and Namibia. People are also waking up to the reality that the really serious health spending capacity resides with developing country governments themselves. By illustration, if the Nigerian government met its own health spending commitment, then it would have roughly $22 billion extra for life-saving programs between now and 2015. That’s enough to pay for ARVs for every Nigerian that needs them, to buy a bed net for all 160 million Nigerians, and to vaccinate every Nigerian child. Plus, still have roughly $15 billion left over for other priorities. So, if the Global Fund is going to give hundreds of millions of dollars for Nigerian health programs, then it needs to do a much better job incentivizing and/or unlocking the exponentially larger domestic resources for health.   

Where does this leave us? In a slightly uncomfortable position, that’s where. From my vantage point, US negotiators seem caught up in the popular and big-hearted wave of activism. Or maybe they’re simply floored by what the Global Fund has done to date (compared to where it was two years ago). But instead of being satisfied by a now normalized institution, they should continue insisting on a hard-headed set of minimum policy reforms as part of any replenishment deal. That means collecting and reporting defendable results and significantly beefing up counterpart financing requirements. That’s how these negotiations work. If you want big ball money, then you’ve gotta deliver big ball reforms. Just ask any Treasury Department official that’s done a MDB replenishment. Absent that, it’s tough to convincingly argue why US politicians should cut other high-performing programs to make the grand Global Fund replenishment calculus work.