The $204 million grant agreement signed last month with the Global Fund to Fight AIDS, Tuberculosis and Malaria for the implementation of a five-year national strategic plan to curb HIV/AIDS in Rwanda has been hailed as an innovative financing mechanism that could create a funding trend aimed at delivering better value for money and more country ownership.
But how innovative is the plan?
According to its architects, the innovation lies in the introduction of several factors, including performance contracts based on outcomes and impact indicators, complete alignment with national systems, and flexible use of grant funds within pre-agreed parameters with significant supervisory control shifting to the Rwandan authorities.
“There’s no doubt that this approach will inspire other countries, because it is more efficient and aligned to countries development,” Rwandan Minister of Health Agnes Binagwaho told Devex.
Under the terms of the agreement, all future disbursements will be directly tied to performance under a results-based financing model.
This way, Binagwaho explained, “participating countries [have an incentive] to focus on high-impact interventions and any savings may be reinvested in the national response [so these are] value for money interventions.”
“Before, when we had savings and funds not utilized, we were sending them back to Geneva, and there were no incentives to innovate and do activities to reach or exceed the expected outcome with quality but by spending less," she said. "Now, we are going to use our skills to do more with quality using less money. The savings will allow us to provide more services for the fight against HIV/AIDS.”
Shifting oversight to Rwanda
According to the Global Fund, the model gives Rwanda greater flexibility to use grant funds as it sees fit.
“This is a different approach from our normal model. In most countries, we have to agree on where money will be spent, and then check carefully that the money was indeed spent as planned,” Global Fund chief spokesperson Seth Faison told Devex. “In this initiative, we allow Rwanda to supervise and to make changes and adjustments as needed, as long as the impact is achieved.”
Faison explained that transferring the responsibility for financial supervision to Rwanda lightens the administrative burden and red-tape for both parties, “removing a layer of bureaucracy” and allowing implementers to be more efficient, flexible and effective.
Rwanda’s performance in the coming years will be measured through the outcome of specific indicators that cover the key pillars of the country’s national strategic plan, which include the percentage of infants born HIV-free to HIV-infected mothers, the percentage of adults and children living without HIV, and the percentage of eligible adults and children receiving anti-retoviral therapy.
A risky business?
This is the first time the Global Fund has used a results-based financing model, and Rwanda has been selected to pioneer it due to the country’s track record of success in health programs and sound financial management.
“We are transferring the monitoring to Rwanda. You could describe it as a risk, but with the accountability track-record Rwanda has shown, we have full confidence that their risk is minimized,” Faison asserted, while Binagwaho argued that in fact there are now “fewer risks than with the previous funding mechanism.”
Rwanda has satisfactory and evidence-based national strategies for tackling HIV/AIDS, tuberculosis and malaria, and in recent years has demonstrated its capacity to use donor and domestic financing to bring the three diseases under control and attain Millennium Development Goals 4, 5 and 6.
Partner assessments also indicate that the country has adequate national financial management and assurance systems.
“The reason we are willing to try this in Rwanda is that Rwanda has a very strong track record of responsible and accountable administering of programs, a well-functioning ministry of finance, and a well-functioning audit authority,” Faison said.
Sustained treatment and care
However, some are still concerned about the risk of the scheme being derailed by corruption — a fear the Rwandan health minister was quick to dismiss.
“Rwanda has maintained a strong stance on zero tolerance for corruption. We are vigilant for good management in respect of the rules and laws, thus corruption is not a threat,” Binagwaho said.
In December 2002, only 870 Rwandans with advanced HIV were receiving anti-retroviral therapy. But by 2012, close to 110,000 people were receiving treatment and Rwanda had achieved universal coverage. Between 2000 and 2015, Rwanda also achieved a 50 percent reduction in HIV incidence among the country’s adult population.
In the next five years, Rwanda aims to sustain the universal access to treatment and care, reduce new infections by two-thirds, and halve the number of HIV/AIDS-related deaths. The first Global Fund results-based disbursement will be made in mid-2014, based on the results for fiscal year 2013/2014.
And Binagwaho and her ministry are keen to get started: “We will begin the implementation as soon as we receive the funds.”
Read more development aid news online, and subscribe to The Development Newswire to receive top international development headlines from the world’s leading donors, news sources and opinion leaders — emailed to you FREE every business day.