Innovative financing for HIV response in sub–Saharan Africa

By 2015, around 15 million individuals were accessing life–saving antiretroviral treatment (ART) [1]. Yet, the “AIDS transition” [2] is not in sight–in 2014, there were 36.9 million people living with HIV, 2 million new HIV infections and 1.2 million AIDS–related deaths [3]. The continuing HIV epidemic requires sustained investment to prevent new infections and to provide treatment to those who need ART now and in the future. However, as more individuals access ART, domestic obligations for financing HIV will increase, reaching an estimated US$ 190 billion between 2015 and 2050 and account for as high as 47% of the GDP in high prevalence sub–Saharan African countries such as Malawi [4], creating long term commitments that have to be met. The financial obligations have major implications for the affected countries and donors–not just in economic terms, but also in the way they manage financing of the HIVresponse, which requires empowering countries to take greater responsibility for managing funds from all sources. The return of investment in HIV response as measured by benefit to cost ratio has been estimated at 280% [5], with substantial economic, social and health benefits reported by other studies [6], comparable to benefit to cost ratios reported for maternal and child health investments [7]. However, donor financing, which accounts for a large share of the HIV/AIDS funding in sub–Saharan Africa, is constrained due to the global economic crisis [8]. Domestic financing remains equally challenging, especially in high–prevalence low–income countries that are fiscally constrained. Compounding the financing challenges are inefficiencies in channeling and use of available funds, and the harmful asymmetry between the long–term financing needs for HIV and short–term replenishment cycles of donor institutions [9]. There are opportunities for increasing HIV financing, however. African economies are enjoying economic growth [10]. There are also untapped natural resources that could generate upwards of US$ 4 billion each year [11]. Additional fiscal space could be created in domestic budgets by improving efficiency in allocation both to and within HIV programmes and by co–financing HIV services with funding other economic sectors [12]. Innovative financing could offer new sources of funding. Conceived as a funding source to meet the Millennium Development Goals (MDGs), innovative financing, which provided around US$ 6 billion in total in 2002–2012 [13], is increasingly an important source of funding for global health [14]. We explore how innovative financing could be used to co–finance the long–term HIV obligations by augmenting domestic contributions in sub–Saharan Africa. We analyze how different innovative financing instruments can be operationalised and the institutional arrangements needed for their effective use.