Tick tax: How the Global Financing Facility can become a game-changer for children’s futures
In a week’s time, governments and development finance experts will descend on Oslo for the Global Financing Facility’s (GFF) replenishment summit. It is an important moment. The GFF proposes a new model in development financing, offering relatively small grants, which are used by recipient governments to generate their own domestic resources for critical health and nutrition services.
Two things are on my mind. First, whether to buy a new arctic coat to survive the perishing Norwegian winter. And second, how can we drive donors to fund the GFF, and better support its development?
The GFF isn’t perfect. But it’s full of potential. Beyond its method of using small amounts of donor money to mobilise larger quantities of financing, it also offers coordination across often-fragmented existing programmes in countries. And it’s unwavering in its determination to give recipient countries ownership of critical funding decisions. The GFF has also already demonstrated significant progress, notably through improved integration of nutrition into the its activity; increased budgetary allocations – Cameroon has undertaken to increase its health sector budget for women’s and children’s health from 6% to 22%; and freeing up more money for essential services, by encouraging more efficient spending of existing health budgets.
However, the health and nutrition funding gap remains enormous. These measures alone will not bridge it. To enable the full funding of their health and nutrition systems, countries need to raise genuinely new – and genuinely sustainable – domestic financing for health and nutrition. To become the game-changing mechanism that the GFF has the potential to be, it must increase government revenue for spending on essential services.
This week we are launching Tick Tax, our new GFF briefing paper, which asserts that increasing government revenue for essential services can only be done by incorporating substantive tax reform into the GFF’s operations across recipient countries. The GFF has developed good relationships across ministries of finance and of health, which have enabled its successful introduction of ‘sin taxes’ in various countries. But while welcome, these do not go far enough – wider ranging tax reform is a logical, and essential, next step.
Now, time to invest in that coat!