Keynote Address Delivered by Dr. Ngozi Okonjo-Iweala, Chair of the Board of Gavi, the Vaccine Alliance at The First Universal Health Coverage Financing Forum Organised by the World Bank Group, and USAID Attended by Health and Finance Ministers and Health Experts.

1. Mobilizing Domestic Resources for
Universal Health Coverage
By Dr. Ngozi Okonjo-Iweala

2. Keynote Address Delivered by Dr. Ngozi Okonjo-Iweala,
Chair of the Board of Gavi, the Vaccine Alliance at The
First Universal Health Coverage Financing Forum
Organised by the World Bank Group, and USAID Attended
by Health and Finance Ministers and Health Experts.

3. 1. Greetings and Protocols
Observed

4. Distinguished ladies and gentlemen, it is a great
honour to be here today. As a former World Bank
colleague, a former Minister of Finance and now
as Chair of the Gavi Board I have reflected on
financing for Universal Health Coverage from
many sides of the coin. So let’s put this issue of
resources for health in context.

5. In September 2015 the entire world committed to 17
goals and 169 targets. In addition to eradicating
poverty, this sustainable development agenda will
cover economic, social and environmental issues..
Economists have estimated that the cost of
implementing the SDG’s will run to the trillions of
dollars. So countries, donors, foundations and… the
private sector are being asked to fund interventions
that will improve our skies to our oceans, our health,
education, wellbeing etc and everything in between..
all of which are, of course, crucial for sustainable
development.

6. Because of the tightening aid environment given the global
downturn, migration and refugees issues, domestic
resource mobilization for development has become the
subject of many international meetings and key note
addresses on health, education, sanitation, infrastructure,
climate change etc. I am a proponent of DRM- one of the
first finance ministers to warn LDCs that we need to do
better on this front because the resources to achieve the
SDGs would not be forthcoming in the quantum needed.
But I must confess some concern that DRM has become
the new rallying cry of the development community in an
era of scarce resources yet even with increased DRM each
sector must focus hard on the justification for their
prioritization.

7. Given the new expanded development agenda outlined by
the SDG’s, the competition for resources will become
increasingly fierce. As a Finance Minister I was inundated
with very laudable proposals for funding from various
sectors and ministries and deciding what to prioritize was
often a very tough decision, as I am sure is the case for
many Finance Ministers. To increase the priority given to
health care from increased domestic resources, the health
community, both globally and nationally, would need to
make a better and more holistic case for health that includes
the economic benefits of investing in health. To secure the
funding needed for Universal Health Coverage, the Ministers
of Health and the health community in general really need to
learn to speak the language of Finance Ministers.

8. 2. So what is Universal
Health Coverage?

9. At its core is the basic principle that all people should
receive quality health services that meet their essential
needs (to be defined) without exposing them to financial
hardship in paying for them. While it is likely that all of us
here already have some affordable access to healthcare,
it is a basic human right that has not been met and
remains beyond the reach of many people particularly in
developing countries. At the core of UHC is ensuring
equity in access to health care where there is currently
none. Therefore it is important to design UHC with the
poor and difficult to reach accorded foremost priority- to
first guarantee a minimum package of essential health
care to those who would otherwise be unable to afford it.

10. Despite the encouraging progress in recent years in areas
like reproductive health and family planning, the world is
very far from universal coverage, even as regards priority
services. For example, every year 46 million births are
unattended by skilled personnel and 23 million infants still
do not receive basic vaccines. Every year 100 million people
are pushed into poverty and a further 150 million suffer
financial catastrophe because of out-of-pocket expenditure
on health services. Countries that are closest to UHC in
terms of attainment of WB-WHO indicators are mostly OECD
countries. This inequity gets to the heart of the MDG’s
unfinished agenda. Unless we make UHC our focus now as
we transition to the SDGs then we will continue to have
preventable human suffering, especially of women and
children, and this can act as a significant barrier to many if
not all of our global development goals.

11. 3. Why should we care about
UHC?

12. Many health ministers are already well aware of
this. But it is important to understand that this issue
goes well beyond health, and as such is a matter
for every part of government, and every
government. Not just because of the moral
argument that all people should have access to
health as a human right, but also because it’s
simply sound economics. There is now compelling
evidence to suggest that investing in health yields
remarkable returns.

13. A 2014 Chatham House report estimates that for LICs and
MICs, health contributed to annual growth in income to the
tune of about 1.8 per cent annually and for sub-Saharan
Africa, the annual contribution was as large as 5.7 per cent.
A recent study, published in the journal Health Affairs, gives
further sense of these returns. Looking at 94 low and
middle income countries, the researchers found that for
every dollar invested in childhood immunization we can
expect to save US$ 16 in healthcare costs, lost wages and
productivity due to illness. If you take into account the full
value people place on living longer, healthier lives, then that
return on investment increases even further to US$ 44. This
is evidence that expenditure in healthcare is a considerable
investment with significant returns.

14. So where do these gains come from? These come from
investing in ‘prevention’ so that you avert illness and the huge
societal and economic burden that sickness entails. As we say
“Prevention is better than cure”. A child when vaccinated
remains healthy and doesn’t require healthcare or treatment,
both of which come at a cost to governments and families, and
can prevent parents from going to work. A healthy infant is also
more likely to attend and do better at school. So rather than
pushing families into poverty through medical bills, through a
simple preventive intervention such as vaccination, you’re not
only boosting the earning and spending capacity of parents, but
also helping to create a more productive ‘next generation’ in the
process. Put simply, keeping a child healthy, such as through
childhood immunization, helps boost a country’s economy.
Ultimately it’s not just about preventing disease; it’s about
keeping people healthy so they can live to their full potential.

15. A review of historical studies provides further
evidence of the economic impact of improving
health outcomes. According to a Chatham House
report, from 1970-2000 around 11 per cent of the
growth in LICs and MICs can be attributed to
reductions in adult mortality during this period.
Further proof that a healthier population can help
lead to a healthier economy. UHC provides a
platform to make that possible and is a very good
investment.

16. 4. How much is needed to
finance UHC in LIC/LMIC

17. The big question is what will it cost? For low
income and low-to-middle income countries
affordability is critical. It doesn’t matter what the
return on investment is if a country can’t afford it in
the first place. According to the Lancet
Commission for Investing in Health, between US$
70-90 billion in additional health spending annually
is needed in order to ensure that a set of key health
services identified in the SDGs as important
stepping stones towards UHC were universally
available. That means that at current levels of
health spending LICs and LMICs will need to
increase health expenditures by a third.

18. These are significant amount of resources but
there has been some progress towards increasing
resources for health. Between 1995 and 2013
global health spending increased, driven by
economic growth. Indeed, total health expenditure
grew more rapidly than GDP, with median
spending as a share of GDP increasing from 4.9 to
6.4 per cent over the same period.

19. However, although very positive this does not
paint the full picture. A closer look reveals that
although General Government Health Expenditure
(GGHE) increased during this period, the majority
of this increase was from high income countries.

20. Countries would also need to ensure that catastrophic
and impoverishing out-of-pocket payments (OOPPs) are
kept to a minimum. OOPPs can be large and
unpredictable, and can often be triggers that push a
family into poverty. Because of this they act as a very real
barrier to health services and economic success for the
poorest members of society. To remove these barriers, it
is recommended that governments commit to ensure
that OOPPs represent at least less than 20 per cent of
the total health expenditure and there are no OOPPs for
priority health services or for the poorest families.
Currently however LICs and LMICs are only halfway
towards this target on average at 43 per cent and 34 per
cent respectively of total health expenditures.

21. 5. What can countries do to
ensure financing of UHC?

22. Of course, reaching these targets will require
financing. But how exactly? Even within the poorest
countries there are opportunities to increase
domestic resources and improve the efficient use of
resources dedicated to health. The tax base in
many of these countries has been increasing over
recent years due to economic growth, with the
African continent being one of the fastest growing
prior to the present downturn. The recent slow-
down in global and regional growth means that
countries cannot solely rely on this going forward.

23. Improving efficiency in health expenditure can also yield
more. The 2010 World Health Report suggested that
around 20–40 per cent of total health spending – which
would represent around $1.4–$2.9 trillion in 2012 – might
be lost through waste, corruption and other forms of
inefficiency. Some of the leading causes of inefficiencies
include higher-than-necessary prices for medicines; use
of substandard and counterfeit medicines; overuse or
oversupply of equipment and technologies;
inappropriate or costly staff mix; inappropriate hospital
size; etc. By making the necessary changes, we can
ensure that resources allocated to healthcare are used
most efficiently to achieve the highest results.

24. Most LICs and LMICs, even with the economic
downturn, have considerable scope to raise revenue
through increases in tax collection efforts and
government charges. For example the IMF estimates
a potential of up to 4 percentage of GDP in additional
tax revenues for LICs. Developing countries can
improve tax collection through more efficient tax
administration, and broadening the tax base. This is
not easy and can take time but is doable. In addition,
there is scope within developing countries to increase
tax revenues by reforming tax policy. For example,
indirect taxes like VAT are still low in some countries-
and this offers an opportunity for increase.

25. Similarly, tackling tax avoidance and evasion, and tax
incentives for companies, such as those related to natural
resources can raise additional revenues in LICs and LMICs.
Governments could also greatly benefit from plugging
leakages in revenues resulting from corruption and the illicit
flow of funds. According to Global Financial Integrity (GFI),
a Washington DC-based anticorruption think tank, the
global proceeds flowing from cross-border criminal
activities, corruption and tax evasion is estimated at
between US$ 1 trillion and US$ 1.6 trillion. In Africa alone,
the High Level Panel on Illicit Financial Flows, chaired by
former South African President Thabo Mbeki, estimates
that as much as US$ 50 billion in illicit funds is being
illegally diverted per year. That is double the amount of
ODA the continent received in 2014.

26. Tax innovation is another potential revenue source-
Sin taxes, telecoms taxes, additional corporate and
social responsible tax etc. These taxes are sometimes
earmarked to specific expenditures like health care or
education. But earmarking can introduce rigidity and
sometimes be counterproductive. At this point in time
I must tell you that your colleagues on the education
side are having the exact same conversation on how
to use additional domestic resources for education.
And I know those in infrastructure are doing the same.
I therefore think that there is room for a more cross-
sectoral or multi sectoral approach bringing together
at the minimum, health and education to argue for
increased prioritization as resources increase.

27. This highlights the imperative need to improve the
dialogue between cabinet Ministers, in particular in
making the case for health and education as a
strong investment.

28. 6. Existing external aid resources
must be used more efficiently

29. As a final consideration I would like to discuss
how better use of external aid can help bring us
closer to UHC too. Under the MDGs we saw
increases in development assistance for health
(DAH). In LICs, Development Assistance for Health
increased six-fold between 1990 and 2014 and
now accounts for up to 30 per cent of health
expenditure. Despite increased domestic
expenditure, most LICs especially fragile states
still need considerable DAH when it comes to
improving the health of their populations. Without
this assistance these countries would not have
seen the progress that we have made so far.

30. However, in recent years we have witnessed how
donor assistance priorities have shifted at a global
level. Health is now just one of many competing
issues on the donor agenda, along with climate
change, security, humanitarian crises and refugees,
among others. Therefore, we cannot expect DAH to
continue to increase at the same pace and donors
are increasingly looking for value for money. In this
context, it is even more important that we ensure
aid is put to the most efficient and effective use,
allocated towards the areas of greatest need and
that countries prepare for an eventual reduction in
support as they grow wealthier.

31. Gavi, the organization which I Chair, is one example of
how this might be achieved. Gavi supports countries to
introduce new vaccines and strengthen their
immunization programs – one of the best buys in health.
It has a systematic approach to evaluating which
vaccines it funds based on where it can achieve greatest
value for money. And it puts sustainability at the centre
of its business model with every country, no matter how
poor, contributing to Gavi-supported programmers.
Countries’ contributions increase as they get richer until
they eventually transition out of Gavi’s support
altogether. This model ensures country ownership,
builds fiscal and budgetary space for immunization and
puts countries on the path to sustainability.

32. In this regard, it is important that countries, and
developing partners too, focus on DAH being used
to help leverage domestic and even private
resources to improve health financing as a means
of funding improvement to our health systems.

33. 7. Concluding Remarks

34. To conclude, I believe we have a strong investment
case in UHC especially some of the essential elements
on prevention such as immunization. We also have the
potential to improve the efficiency with which present
resources are used in health and to raise additional
resources. But we must remember we have to argue
the case. We need to put finance and health together.
We need partners and allies in education. We need to
leverage the external assistance we have wisely, using
it to produce measurable results. Above all, we must
not take anything for granted.
Thank you.
~Dr. Ngozi Okonjo-Iweala

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