During the last decade, domestic resources have been instrumental in the efforts against HIV. Low- and middle-income countries invested a total of US$ 43.5 billion from domestic public sources in the last decade, reaching US$ 6.6 billion in 2010, a three-fold increase in domestic funding from the US$ 2.15 billion recorded in 2000. The total amount from domestic sources and spent in the 125 countries analysed represents almost one half of the funding available for HIV in these countries during the last decade. In 2010 alone, low- and middle- income countries (LMIC) contributed more than US $ 7.6 billion from public (US$ 6.6 billion) and private sources (US$ 1.0 billion) to their domestic HIV responses, while international funding from bilateral and multilateral organizations and the philanthropic sector contributed a total of US$ 7.5 billion for a combined amount of US$ 15.1 billion in 2010 .
This analysis also found that GDP and HIV prevalence are positively associated with the level of domestic spending from public sources. A large body of evidence shows a strong and positive correlation between national income and national expenditures on health care and is a consistent finding of research [7, 8]. Many argue that developing countries’ ability to take on a greater share of the financial burden is critical to ensuring long-term sustainable financing and this may be possible with increased economic growth.
In most countries the domestic HIV response is still not commensurate with the magnitude of the epidemic . Approaches that contribute to greater financial sustainability of health programs have been extensively published [9–12]. Governments in low-income countries should mobilize domestic resources and analyse the convenience to implement innovative financing mechanisms such as special levies on currency and financial transactions, selling franchised products and services, mobile phone voluntary solidarity contribution, excise tax on tobacco, alcohol and unhealthy food. Still, some low-income countries cannot afford to fully support patients on treatment from domestic resources alone and will need external support.
There are several opportunities to increase public spending for the HIV response to reach the universal access targets for prevention, treatment and care. First, governments can create fiscal space through fiscal instruments such as external grants, domestic revenue mobilization, deficit financing, reprioritization and raising efficiency of current expenditures. There may be substantial opportunity for improving the efficiency of AIDS services, by providing more services with existing resources. A recent study evaluating efficiency of national HIV programs in 68 low- and middle-income countries found only a moderate efficiency of 49.8% in implementing AIDS programs . Countries would also explore improving their capacity to collect progressive and fair taxes from their citizens. Middle-income countries, especially, have more room to create a sustainable tax base. The World Bank estimates that at least 30 per cent of GDP is needed to sustain a well-functioning state, but some government budgets are below 20 percent of GDP .
Middle-income countries have the potential to increase their domestic spending sustainably, especially those less affected by the economic crisis, notably South Africa . A recently proposed HIV domestic priority index shows a country’s ability to fund its own HIV response . Middle-income countries would seem to have potential to increase their domestic spending sustainably. China and India, two countries with increasing epidemics, are spending at relatively low levels given their disease burden and ability to pay. Therefore, they could contribute more to the HIV response from domestic resources. Even one of the weakest economies in Africa, Zimbabwe, has shown unprecedented commitment and has been able to augment the government budgetary allocations to HIV programs by introducing a monthly income tax from employee salaries .
This study describes public expenditures from an international perspective and acknowledges that these should provide information on beneficiary populations. It has been shown that in spite of the fact that the HIV epidemic in Latin America is driven by MSM and sex workers, the majority of prevention spending is not targeted at these groups . At the country level, benefit-incidence analyses (BIA) have the potential to complement resource tracking activities by analyzing who benefits from using health services. While traditionally BIA has focused on pro-poor subsidies, the same methodology can be used to assess how well HIV programs are performing in terms of the distribution of service benefits .
The economic outlook for low and middle income countries is promising; even in Africa, GDP is expected to grow by nearly 6 percent in 2013. This economic growth is widespread across Africa and more than half of all countries have improved governance with a majority of countries improving in human development and a growing middle class; these shifts suggest a dynamic cycle of domestic growth [21–23].
Sustained increases in domestic funding for HIV were observed in all regions during the last decade. Sub-Saharan Africa has made a formidable effort characterized by higher domestic/public spending in spite of a lower GDP per-capita and higher prevalence than any other region. Despite huge income disparities, sub-Saharan Africa and Latin America devoted significant domestic resources to financing HIV-related activities, the former under the pressure of high demand and a high disease burden, the latter perhaps facilitated by their developed health systems. Lower amounts were spent in the Middle East, North Africa and Southeast Asia relative to their populations, income level and government revenue.
Africa, in particular sub-Saharan Africa, is home to 80 percent of people living with HIV globally and one million people living on less than a dollar a day. They spent 0.22 percent of their GDP, equivalent to US$ 2.5 billion or US$ 3.45 per capita in 2010, the highest per capita spending amongst low- and middle-income countries. This region requires coordinated investments from international donors as well as from national governments to curb the continuous and chronic effects of the HIV epidemic.
The 2011 Political Declaration on HIV recognizes that this worldwide commitment to the global HIV epidemic has been unprecedented and represents the largest amount dedicated to combating a single disease in history . However, international assistance from bilateral organizations declined 10 percent between 2009 and 2010, following years of steady increases in funding which increases the financial burden on low- and middle-income countries in the coming years . Assistance by international organizations such as GF, UNITAID and PEPFAR have been critical, accounting for most of the funding for HIV in many low income and high burden countries and US$ 7.5 billion in 2010 alone. HIV directed foreign aid has significantly positive effects on a country’s treatment coverage rates . In fact, the expansion of access to HIV antiretroviral treatment to 8 million people by the end of 2011 has resulted in the reduction of HIV-related deaths by more than 20 per cent in the past five years.
As in any study, there were several limitations. Domestic spending is reported using government sources of information, which in some countries lack comprehensive expenditure records and the accounting information systems do not contain specific budgetary and expenditure lines related to HIV. On balance, these data issues suggest that under-estimation is more likely than overestimation and our results represent lower bound estimates. Development partners and governments are increasing efforts to strengthen resource tracking over time. The estimation of missing data points may be vulnerable to any unobserved effects that we were not able to capture in the prediction model. In spite of the relatively robust methodology and the use of panel analysis based on a random effects model, there is always the possibility of unobserved variables that were omitted from the analysis. This analysis does not include out-of-pocket expenditures; although out-of-pocket spending has been found to vary from 23 to 68% of total health expenditures, the proportion that households divert to the purchase of condoms, HIV testing, clean syringes or other preventive interventions is unknown .
Sustainable domestic investments are needed to achieve a robust response to the HIV epidemic which will yield long-term dividends. The high level of dependence on international funding in low-income countries requires rethinking the global financial aid architecture to safeguard the sustainability of HIV funding . International donors should be aware that the political economy of global HIV finance influences domestic public finance and both domestic and international sources should explore ways to strategically increase their combined and complementary investments. It is important to recognize that HIV is a shared responsibility and ownership is instrumental. Countries should be able to access predictable and sustainable HIV resources aligned with national development strategies that maximize synergies and are implemented with transparency and accountability .