What should you be asking your governments for in July 2015?

As the Financing for Development conference draws near (13 July), think tanks are releasing their latest evidence about what we should be asking our governments to sign up to. Budget Bites has laid out the key facts you should know about health financing needs and how to meet them.The Overseas Development Institute launched an exciting report in April, Financing the Future. They have estimated that Universal Health Coverage will cost $74 billion to deliver in low income countries (i.e. $86 per person or 5% of GDP, whichever is the highest).The report also shows that delivering a basic package of social protection, education, and health services to all citizens will cost $148 billion per year. Assuming that countries increase their domestic revenues to maximum tax capacity and spend half of their domestic revenues and aid on these sectors, the annual financing gap for social services is of $84 billion per year, of which $73 billion in low-income countries.Want to find out more? We also recommend checking out ONE’s 2015 Data Report which tracks donor and domestic spending, as well as revenue mobilisation, in aggregate as well as through helpful country profiles (e.g. Nigeria and Tanzania).

• Recommendation: Richer countries must agree to scale up their aid contributions, and spend this aid equitably and efficiently. A commitment from poorer countries to increase tax revenues in an equitable way, and spend a fair share of these on social sectors, is also required.

However, implementing fair taxation is not just the responsibility of African governments. Oxfam has released a briefing in advance of the G7 meetings in June, saying that in 2010, G7-based companies cheated African governments out of an estimated $6 billion through a form of tax avoidance called trade mispricing – the practice of artificially allocating assets or transactions to subsidiaries located in tax havens instead of where the transaction actually took place.This practice means they avoid paying taxes in the countries where the transactions actually took place. $6 billion is equivalent to three times the amount required by Sierra Leone, Guinea, Guinea-Bissau and Liberia to plug primary health care gaps.For more information about tax scams and the impact on health in African countries, we strongly recommend Save the Children’s latest report, “Making a Killing”. This report estimates that Africa loses $15 billion a year from trade mis-invoicing, which could buy 1.8 million more health workers. The report also contains country-specific estimates on Ghana, Kenya, Mozambique, Tanzania and Uganda.The continent also suffers from giving voluntary tax breaks to these companies, which threaten to take their business elsewhere if challenged. In Sierra Leone, tax breaks in 2012 amounted to 59% of the entire government budget and more than eight times the health budget. As a result, government revenue is helplessly low: Sierra Leone and Nigeria are among nine out of 188 countries with government revenues totally less than 15% of GDP (source).Recommendation: Create an intergovernmental body for tax cooperation that includes all countries, broaden tax negotiations to ensure African countries receive a fair share of the value produced using their resources, and invest aid resources in strengthening taxation systems.As advocates, we don’t just care about revenues, but also what these resources are spent on. The newly released Government Spending Watch report analyses planned expenditure in 2014, finding that:

1. No Sub-Saharan African country met the Abuja target of allocating at least 15% of the government budget on health in 2014

1. The average lower-income country allocated less than $20 out of government funds for each person’s health, with the lowest spenders being Haiti ($6), Madagascar ($4), and Zimbabwe (less than $1).
2. Only 7 out of the 36 African countries included spent the minimum recommended amount of $86: Angola, Cape Verde, Congo, Lesotho, Sao Tome and Principe, South Africa, and Swaziland.
3. On average, there has been no increase in health allocations as a proportion of GDP since 2009. The average allocation to health is 2.7% of GDP, against a 5% target.
4. On average, health allocations as a proportion of government budgets have fallen over time, from 9% to 8.6% - substantially below the 15% Abuja target.

All data used in the report is freely available for anyone to access, a fantastic resource. You can also find a briefing on health sector spending in Africa using the most recent data here.

• Recommendation: Spend at least 15% of government revenues on health; spend at least $86 per person and 5% of GDP on health services