Could Global Voice Group's Innovative Financing solutions help rebuild Central African Republic's health system?

December 5, 2015 - The Central African Republic (CAR) has been unstable since its independence from France in 1960 and is one of the least-developed countries in the world. Protests, clashes, reprisal attacks and armed conflicts are endemic and sectarian brutality has continued in a seemingly uncontrollable spiral of violence despite the presence of United Nations (UN) peacekeepers and French troops.

Recurring cycles of violence remain unaddressed
For many years, the CAR has not received meaningful attention from the international community. That is not to say that it has not been the recipient of significant numbers of peace-building, peace-keeping and humanitarian responses, but over the course of the past few decades, these interventions -whether focused on providing humanitarian assistance or trying to address various crises-have not meaningfully addressed the recurring cycles of violence in the CAR, nor the factors that drive them.

President Catherine Samba-Panza faces the monumental task of attempting to address a crisis that has not only outpaced the ability of her own authorities (the interim government), but also the ability of the international community to respond. She will require the ongoing, sustained and enhanced support of the international community to meet the benchmarks, not only of elections, but also of reconciliation, of ensuring a level of justice and accountability, and of addressing the security situation. The tasks ahead are truly immense.

World Bank assistance to rebuild the health care delivery system
In May 2015, the World Bank Group's Board of Executive Directors approved a total of US$ 12 million in new financing to rebuild and strengthen the delivery of health services in war-torn Central African Republic. The project is expected to reach over 1 million direct beneficiaries in 2019 and will target the most vulnerable groups like women and children.

Prior to the current crisis, CAR was in dire need of improvements in health care, especially in maternal, child and reproductive health. In 2011, there was only 1 doctor for every 15 000 people and 1 health facility for every 8 000 people. Hopefully, as stability is slowly returning to the country, the government will begin to shift health sector interventions away from emergency relief towards actions that will rebuild the collapsed health system.

The state of the health care delivery system is of great concern. Tumult in this landlocked country was so extensive in the spring of 2014 that officials of the World Health Organisation (WHO) were not sure how much of the country's health system was actually functioning. "The entire health-care delivery structure in Central African Republic, has been heavily disrupted, and basic services are completely absent in many locations. […] Most of the services are being provided from outside, making it difficult to scale up, reach people in need, and provide them with medical assistance. One key problem is that so many health workers have fled their posts due to the insecurity," says Dr Michel Yao[1]. In the midst of conflict and the mass displacement of some 425 000 people, the WHO undertook a nationwide assessment of the Central African Republic's health system. All aspects of each health facility, from its supplies of medicines and source of energy to the availability of health care workers, hospital beds, and equipment were assessed. This has provided a baseline for the government to plan the strengthening of its health care services in a more sustainable way.

A Grade 3 Health Crisis
In December 2013, the WHO categorised the CAR's health crisis as a "Grade 3", its highest level, or a humanitarian emergency. By March 2014, armed conflict had uprooted half a million people, disrupted the lives of 2.5 million more, and injured about 7 000. It has hindered immunisation and other preventative health programmes, greatly increased malnutrition and damaged or destroyed hospitals and health clinics. Buildings have been demolished, medical equipment looted, and health care staff attacked. The country's most pressing health problems are malaria, respiratory infections, watery diarrhoea, physical trauma and malnutrition.

The WHO survey highlights the needs. But intensified fund-raising is required to fill the gaps. Less than a third of the US$ 64 million requested for total health sector funding in CAR has been received. The WHO has received two-thirds of the US$ 16 million it requested for its own activities, through support from the World Bank, the United States Agency for International Development, Finland, the United Nations Development Programme, the UN Central Emergency Response Fund and the African Public Health Emergency Fund. International support and funding is urgently required to meet these dire humanitarian needs. However, with the traditional forms of financing for development under pressure and development assistance falling far short of internationally agreed targets, it is clear that this dependence on external aid is untenable under the current bleak global economic circumstances.

A rich endowment of mineral resources
The CAR possesses considerable agricultural, water and mineral resources. It has a rich endowment of mineral resources including copper, diamonds, gold, graphite, ilmenite, iron ore, kaolin, kyanite, lignite, limestone, manganese, monazite, quartz, rutile, salt, tin and uranium.

Diamonds worth approximately US$ 24 million have been smuggled out of the Republic since the suspension of the Kimberley Process last year. With the traditional government deprived of diamond revenue, the transition towards an election in addition to UN peacekeeping is seen to be in urgent need of support[2]. Other countries are able to offset their mineral resources into development finance but this will never be feasible unless the government regains control of the mining areas.

Philippe Douste-Blazy, the UN Special Advisor for Innovative Finance for Development has reminded us: "These extracted resources don't just belong to the heads of state and the rich people. It is an investment for the African continent."

Under these difficult circumstances, it is imperative to create new and innovative sources of funding like innovative financing for development, to address the socio-economic development needs of the population, of which health is clearly an urgent priority. New revenue streams such as innovative financing for development will have to be identified to implement or scale up already-existing programmes to address the current health challenges. According to McKinsey& Company, "innovative" refers to finance mechanisms that might mobilise, govern, or distribute funds beyond traditional donor-country official development assistance (ODA)[3].

The Global Voice Group contribution
Revenues generated with the assistance of the Global Voice Group through international calls have generated approximately €100,000 per month or €1.2 million per year. Globally this has brought € 8 million to the Central African Republic or approximately US$ 9 million over the years. An interesting comparison is that this represents 75% of the World Bank's US$ 12 million health programme and covers 50% of the expenses for emergency relief health services per year. Currently these expenses are being paid by transfer of US$ 2 million by UNICEF to address the shortage of anti-malarial drugs for the entire country.

Alternatively, through contracting of UN Agencies and NGOs this covers at least 100% of the expenses to continue providing support for the provision of emergency health services to the population affected by the crisis, including Internally Displaced Persons (IDPs) and vulnerable groups (mothers and children). These expenses have been calculated as US$ 0.5 million in equivalent IDA Additional Financing. Total revenue generated by GVG assistance contribution amounts to €1.2 When one considers the four-year UNESCO-financed primary school to the tune of US$ 1 127 000 (or €1 010 187), the revenue generated through GVG's assistance was about the same amount but in one year only[4].

Innovative Financing – a game changer for sustainable development
From the above examples, it is clear that innovative financing for development has the capability of generating significant amounts of revenue that could either take the place of or support existing traditional methods of funding. It is no exaggeration, then, to say that innovative financing for development is a real game changer for sustainable development.

Several developing or emerging countries are already capitalising on innovative financing for development. For instance, in Haiti, education is being funded through micro-charges on international telephone calls. By June 2015, more than US$ 16 million had been generated, allowing the government to provide free quality education to 1.4 million of Haitian children.

Global Voice Group S.A (GVG) has made it its mission to help African countries harness the financial potential of a crucial sector of their economy: telecommunications. The leveraging of international incoming calls as an innovative funding mechanism has become an important part of the economies of many African countries. There are other opportunities such as surcharges on top-ups which could also be exploited in the telecommunications area.

To make this funding mechanism effective, however, international incoming traffic must be accurately measured and a revenue-assurance solution put in place to prevent the fraudulent diversion of the telecoms traffic. GVG's cutting-edge telecommunications governance solutions have assisted countries like Ghana, Guinea-Conakry, Tanzania, Rwanda, Liberia, Togo, and Congo-Brazzaville to optimise the revenue generated by international incoming telephone traffic so as to ensure that both the local operators and the government collect their fair share of the revenue.

The public revenues the governments of these countries have been accruing from incoming international calls are a very good example of the benefits of "innovative financing mechanisms." In this way, African governments are empowered to take charge of their own socio-economic future through the smart integration of ICTs. However, this is not the only revenue-generating opportunity. Many others are available to the CAR. There is a whole range of revenue generating opportunities. These do not rely on foreign aid, nor do they entail any debt for the government. These revenues can be used to finance social projects like health and education and meet the respective countries' specific development goals. This paves the way to more sustainable models of society on the African continent.

[1] Dr Michel Yao, WHO's representative to the Central African Republic
[2] http://www.minigweekly.com/topic/central-african-republic. Accessed on 20 November, 2015.
[3] McKinsey & Company, 2013
[4] Plan d'action du secteur de l'éducation 2013-2015, République Centreafricaine, décembre, 2012 p. 82