By increasing lending capacity in education via new sovereign guarantees on the one hand, and reducing its cost via a grant mechanism funded by sovereign and non-sovereign contributors on the other hand. First, the Education Commission promotes the International Finance Facility for Education (IFFEd) that aims taking advantage of the multilateral development banks to leverage sovereign credit. In the meantime, the Education Commission, chaired by United Nations Special Envoy for Global Education Gordon Brown, is involved in two recent initiatives. These are marked by an increasing role of the private sector, either indirectly, through contributions to multilateral new initiatives such as GPE Multiplier, or Education Cannot Wait, or directly, via Impact investing instruments like private equity, private debt and real assets, applied specifically to the education sector. To fill the educational gap, numerous initiatives have been developed recently. These needs concern access (according to World Bank, some 260 million children are still out of primary and secondary school), school completion rate and learning. Though access to basic school has progressed rapidly in most low- and middle-income countries, important needs remain. From health to education: the momentum for innovative financing After all, achievements observed in health are the result of a clear intervention framework (objective/action/result) strong commitment of public and private partners to a short-term objective with a potential rapid return and the creation of innovative platforms that are clearly focused on performance criteria. While resources mobilized from innovative financing remain relatively modest compared to Official development assistance, the real innovation has been the establishment of new organizational forms as integrated financing mechanisms. For example, since its creation in 2000, Gavi has helped vaccinate more than 760 million children in the world’s poorest countries, preventing more than 13 million deaths.ĭevelopment news From Big Data to Big Brother: use of data for health ID4D They were used for programs for new and underused vaccines, HIV/AIDS, malaria, tuberculosis, and maternal and child health in low- and middle-income countries. Most of these funds were channeled through three main platforms: Gavi, Global Fund, and Unitaid. Since 2006, over US$8 billion have been mobilized by innovative financing mechanism such as IFFIm, AMC for pneumococcal disease, levy on airline tickets, or voluntary contribution. Innovative financing has been focused primarily on health. creating ad hoc mechanism to fund specific sectors like the International Finance Facility for Immunization (IFFIm) or the Advanced Market Commitments (in AMCs mechanism, a buyer – typically a government or international organization – agrees to a predetermined purchase price for a good or service with a provider – typically a private company, producing for example vaccine).
achieving specific development results via results-based financing mechanism or Development impact bonds (DIBs mechanism harnesses private capital for social services and encourages outcome achievement by making repayment contingent on success).levy on air tickets), voluntary contribution or blended finance raising additional resources for development through compulsory charges (e.g.To clarify what innovative financings mean, Boussichas and Nossek (2018), categorize them according to their primary objectives: Since its introduction at the international conference on financing for development in Monterrey (Mexico) in 2002, innovative financing is a term that has been used extensively to define a diverse range of practices and financial mechanisms aiming to collect additional financing for development oriented towards results. Innovative financing in the health sector It is good news, but important challenges remain. More recently, new initiatives attempt to develop innovative financing mechanisms towards education sector. In the health sector, the current effects of the COVID-19 pandemic on worldwide national health systems speak for themselves.Īgainst recurrent financing needs for human capital sectors in developing countries, innovative financing mechanisms have contributed to mobilise significant financial resources in the recent years, mainly for the health sector. In education, for instance, the chronic under-investment in primary school system of the Sahel countries is a key factor of the security deterioration in the region. Health and education are large public resources consumers: neglecting these human capital sectors might be harmful at every level.
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