GFO Issue 466, Article Number: 3
ABSTRACT
Faced with a sudden financial crisis after the recent international aid was drastically reduced, the Global Fund swiftly and strategically downsized to protect its core mission. Although the vital heart of its programmes continues to beat, the cuts emphasise a crucial need for countries to move away from aid and invest in their own healthcare futures.
The beginning of this year was marked by Donald Trump's return to the presidency of the USA. The re-election was accompanied by the US withdrawal from international aid and the dismantling of USAID, which affected countries, critical activities, and forced organizations supported by US funds to revise their plans and adjust their programs; in an era of doing more with less, tough decisions had to be made.
That’s how, through correspondence with countries in April, we've found out that in exceptional circumstances due to financial constraints, the Global Fund has decided to implement temporary adjustments to its grants to protect essential services. To preserve funds for a broader reprioritization exercise later in 2025, the organization is pausing certain non-critical investments. This decision applies to capital expenditures, new vehicle and equipment purchases, various trainings and conferences, as well as surveys and studies. It is important to note that these measures do not apply to any ongoing COVID-19 Response Mechanism (C19RM) activities.
Furthermore, two additional financial controls will be implemented with immediate effect. The reinvestment of any foreign exchange gains is now paused, and prior approval from the Global Fund is mandatory for all types of budget revisions. The Local Fund Agent and country team will provide specific guidance on which activities to pause, and upcoming disbursements will be adjusted to reflect these changes. The overall goal is to work collaboratively with the National TB & Leprosy Control Programme to adapt to the evolving financial context while safeguarding core, life-saving programs against HIV, TB, and malaria.
These exceptional measures were appreciated despite their suddenness and collateral damage to some activities.
The OIG Rapid Assurance Review Report
Recently, the Office of the Inspector General has released a Rapid Assurance Review Report whose objective is to “provide assurance in a fast-moving setting, facilitate early identification and resolution of governance, risk, and control issues and support the development of an appropriate, fit-for-purpose process.”
The OIG analysed the formula that led to the reduction, the qualitative adjustments and the communication to countries as well
1. Formulaic Reduction : Applying a standard, proportional reduction across all unspent GC7 grant budgets was the first step in adjusting country allocations. This approach involved using a pre-defined formula to reduce budgets based on estimated funds not yet executed as of 30 June 2025. The method aimed to be fair and transparent by making proportional reductions based on data considered reliable and accurate. The Global Fund Secretariat initially proposed a reduction of around US$1.6 billion, or approximately 12% of the original budget. After further adjustments, the net reduction applied was US$1.43 billion, or around 11% on average across countries. This initial reduction formed the basis for further, tailored adjustments and ensured that the initial reductions were fair and proportionate.
2. Qualitative Adjustments (QA): After initial reductions, the Secretariat implemented a QA process to tailor adjustments to country-specific needs. This multi-stage process involved Country Teams proposing adjustments based on portfolio dynamics, bilateral funding, Challenging Operating Environments, and programming gaps. The Grant Management Division reviewed and consolidated these proposals, checking for consistency and robustness. A Central QA panel, supported by Senior Leadership, then assessed and approved adjustments. The process enabled upward adjustments of US$166 million, partially offsetting initial cuts and protecting key programs. While generally well-executed, data limitations on bilateral funding were identified as an area for future improvement.
3. Communications: The process involved sharing updated GC7 funding envelopes and grant budgets with PRs, CCMs, and governance bodies. The Secretariat informed stakeholders of these reductions by June 30, 2025, with a detailed review planned for later. Governance bodies, especially the Global Fund Strategy Committee, received timely and detailed reports that highlighted the macro and portfolio-specific impacts of funding reductions, including fund movements across classifications such as Challenging Operating Environments, disease burden, and regions. This transparent communication supported oversight and guided programme prioritisation and grant revisions. The countries we approached for this article have found communication clear, efficient, and reinforced in the field by the presence and assistance of the country teams.
According to the OIG, the process of reducing country allocations in GC7 was implemented reasonably, equitably, and proportionally based on accurate data and sound assumptions. The qualitative adjustments process was also well-designed and implemented, with multiple Secretariat reviews, including consistency checks, stress tests, and a central QA panel. This provided robust safeguards and maintained the integrity of the final reductions. Communication with governance bodies was timely and detailed, effectively conveying the aggregate and portfolio-level impacts across key dimensions, including operating environments, income levels, and disease burden. However, communication with in-country stakeholders was not reviewed and remains subject to future assessment.
More concretely in the field
In one West African country, the Global Fund's communication was good, from information on adjustment measures to the reduction or (re)prioritization of activities. The assistance provided by the country team, whose approach was deemed professional and educational, enabled stakeholders to understand the issues that led to this decision, which they considered understandable and necessary in these uncertain times: “We must adapt!” However, even if this is justified, it is regrettable that the performance framework has not been revised in line with the 10% reduction in the country envelope.
This reduction, estimated at around 10% off the grant, has had an impact on the three components (malaria, HIV, and tuberculosis), as well as the strengthening of the health system and the community system. To manage the reduction of 10%, activities had to be reassessed, and decisions had to be made on whether to proceed with them. We have therefore learned that level 1 (priority) activities, such as access to antiretroviral drugs for people living with HIV, treatment of resistant tuberculosis and mass distribution of mosquito nets, have been maintained without compromise due to their “vital and essential” nature. The continuation of level 2 activities, which are important but flexible, such as motivating peer educators, community tuberculosis screening, and digitising patient follow-up, was subject to arbitration; however, most of them were retained. The Level 3 interventions, considered complementary, were cancelled or postponed; these include: large-scale media campaigns, mobilisation events, and the extension of innovative pilot projects. Advocacy and citizen monitoring activities were also impacted and scaled back.
This exercise was led by the principal recipients, who worked to develop a roadmap that was validated at an extraordinary general meeting whose objective was to ensure the preservation of essential services and high-impact activities, all under the coordination of the CCM.
This situation raises significant concerns regarding the sustainability of achievements and dependence on development aid. Indeed, on the recurring issue of co-financing, we learn that this country is behind on its commitments and has not yet injected funds to cushion the impact of the grant reduction. However, internally, this raises the urgent need for dialogue on the necessity of mobilizing domestics resources.
In another country in the same region, with an almost 10% reduction in envelope, the priority was left to purchasing and stock management, strengthening the health community system, and activities funded by donors other than the Global Fund, as well as co-financing activities. Activities like trainings and workshops are postponed or reevaluated in terms of size, venue, distance, and other factors. As in the country above, in this country, PRs led the process in collaboration with the CCM and were responsible for budget and activity optimisation, adjustments, and prioritising the integration and transversality of activities. The new “work plan” was approved in the general assembly by a large range of stakeholders. Here also, the communication of the Global Fund on the reprioritisation was rated well, with the support of the country team. The performance framework was also not touched.
These exceptional mitigation measures, although challenging, were important as they aimed to adjust and secure the efficiency of the Global Fund's portfolio worldwide. However, in the course of performance, it’s alarming to see that the initial performance framework has not been reviewed. How could we expect countries to do more with less? With a 10% grant reduction, is it realistic to keep the same indicators when they were drawn on an entire and uncut envelope? Aren’t we asking countries to overstretch their capacity in a context of money scarcity?
At this point, we cannot ignore that African leaders must also take the ball and own domestic health financing. The ultimate takeaway is clear: to ensure the resilience of health systems against future shocks, the urgent dialogue on mobilising endogenous resources must now turn into decisive action.
The beginning of this year was marked by Donald Trump's return to the presidency of the USA. The re-election was accompanied by the US withdrawal from international aid and the dismantling of USAID, which affected countries, critical activities, and forced organizations supported by US funds to revise their plans and adjust their programs; in an era of doing more with less, tough decisions had to be made.
That’s how, through correspondence with countries in April, we've found out that in exceptional circumstances due to financial constraints, the Global Fund has decided to implement temporary adjustments to its grants to protect essential services. To preserve funds for a broader reprioritization exercise later in 2025, the organization is pausing certain non-critical investments. This decision applies to capital expenditures, new vehicle and equipment purchases, various trainings and conferences, as well as surveys and studies. It is important to note that these measures do not apply to any ongoing COVID-19 Response Mechanism (C19RM) activities.
Furthermore, two additional financial controls will be implemented with immediate effect. The reinvestment of any foreign exchange gains is now paused, and prior approval from the Global Fund is mandatory for all types of budget revisions. The Local Fund Agent and country team will provide specific guidance on which activities to pause, and upcoming disbursements will be adjusted to reflect these changes. The overall goal is to work collaboratively with the National TB & Leprosy Control Programme to adapt to the evolving financial context while safeguarding core, life-saving programs against HIV, TB, and malaria.
These exceptional measures were appreciated despite their suddenness and collateral damage to some activities.
The OIG Rapid Assurance Review Report
Recently, the Office of the Inspector General has released a Rapid Assurance Review Report whose objective is to “provide assurance in a fast-moving setting, facilitate early identification and resolution of governance, risk, and control issues and support the development of an appropriate, fit-for-purpose process.”
The OIG analysed the formula that led to the reduction, the qualitative adjustments and the communication to countries as well
1. Formulaic Reduction : Applying a standard, proportional reduction across all unspent GC7 grant budgets was the first step in adjusting country allocations. This approach involved using a pre-defined formula to reduce budgets based on estimated funds not yet executed as of 30 June 2025. The method aimed to be fair and transparent by making proportional reductions based on data considered reliable and accurate. The Global Fund Secretariat initially proposed a reduction of around US$1.6 billion, or approximately 12% of the original budget. After further adjustments, the net reduction applied was US$1.43 billion, or around 11% on average across countries. This initial reduction formed the basis for further, tailored adjustments and ensured that the initial reductions were fair and proportionate.
2. Qualitative Adjustments (QA): After initial reductions, the Secretariat implemented a QA process to tailor adjustments to country-specific needs. This multi-stage process involved Country Teams proposing adjustments based on portfolio dynamics, bilateral funding, Challenging Operating Environments, and programming gaps. The Grant Management Division reviewed and consolidated these proposals, checking for consistency and robustness. A Central QA panel, supported by Senior Leadership, then assessed and approved adjustments. The process enabled upward adjustments of US$166 million, partially offsetting initial cuts and protecting key programs. While generally well-executed, data limitations on bilateral funding were identified as an area for future improvement.
3. Communications: The process involved sharing updated GC7 funding envelopes and grant budgets with PRs, CCMs, and governance bodies. The Secretariat informed stakeholders of these reductions by June 30, 2025, with a detailed review planned for later. Governance bodies, especially the Global Fund Strategy Committee, received timely and detailed reports that highlighted the macro and portfolio-specific impacts of funding reductions, including fund movements across classifications such as Challenging Operating Environments, disease burden, and regions. This transparent communication supported oversight and guided programme prioritisation and grant revisions. The countries we approached for this article have found communication clear, efficient, and reinforced in the field by the presence and assistance of the country teams.
According to the OIG, the process of reducing country allocations in GC7 was implemented reasonably, equitably, and proportionally based on accurate data and sound assumptions. The qualitative adjustments process was also well-designed and implemented, with multiple Secretariat reviews, including consistency checks, stress tests, and a central QA panel. This provided robust safeguards and maintained the integrity of the final reductions. Communication with governance bodies was timely and detailed, effectively conveying the aggregate and portfolio-level impacts across key dimensions, including operating environments, income levels, and disease burden. However, communication with in-country stakeholders was not reviewed and remains subject to future assessment.
More concretely in the field
In one West African country, the Global Fund's communication was good, from information on adjustment measures to the reduction or (re)prioritization of activities. The assistance provided by the country team, whose approach was deemed professional and educational, enabled stakeholders to understand the issues that led to this decision, which they considered understandable and necessary in these uncertain times: “We must adapt!” However, even if this is justified, it is regrettable that the performance framework has not been revised in line with the 10% reduction in the country envelope.
This reduction, estimated at around 10% off the grant, has had an impact on the three components (malaria, HIV, and tuberculosis), as well as the strengthening of the health system and the community system. To manage the reduction of 10%, activities had to be reassessed, and decisions had to be made on whether to proceed with them. We have therefore learned that level 1 (priority) activities, such as access to antiretroviral drugs for people living with HIV, treatment of resistant tuberculosis and mass distribution of mosquito nets, have been maintained without compromise due to their “vital and essential” nature. The continuation of level 2 activities, which are important but flexible, such as motivating peer educators, community tuberculosis screening, and digitising patient follow-up, was subject to arbitration; however, most of them were retained. The Level 3 interventions, considered complementary, were cancelled or postponed; these include: large-scale media campaigns, mobilisation events, and the extension of innovative pilot projects. Advocacy and citizen monitoring activities were also impacted and scaled back.
This exercise was led by the principal recipients, who worked to develop a roadmap that was validated at an extraordinary general meeting whose objective was to ensure the preservation of essential services and high-impact activities, all under the coordination of the CCM.
This situation raises significant concerns regarding the sustainability of achievements and dependence on development aid. Indeed, on the recurring issue of co-financing, we learn that this country is behind on its commitments and has not yet injected funds to cushion the impact of the grant reduction. However, internally, this raises the urgent need for dialogue on the necessity of mobilizing domestics resources.
In another country in the same region, with an almost 10% reduction in envelope, the priority was left to purchasing and stock management, strengthening the health community system, and activities funded by donors other than the Global Fund, as well as co-financing activities. Activities like trainings and workshops are postponed or reevaluated in terms of size, venue, distance, and other factors. As in the country above, in this country, PRs led the process in collaboration with the CCM and were responsible for budget and activity optimisation, adjustments, and prioritising the integration and transversality of activities. The new “work plan” was approved in the general assembly by a large range of stakeholders. Here also, the communication of the Global Fund on the reprioritisation was rated well, with the support of the country team. The performance framework was also not touched.
These exceptional mitigation measures, although challenging, were important as they aimed to adjust and secure the efficiency of the Global Fund's portfolio worldwide. However, in the course of performance, it’s alarming to see that the initial performance framework has not been reviewed. How could we expect countries to do more with less? With a 10% grant reduction, is it realistic to keep the same indicators when they were drawn on an entire and uncut envelope? Aren’t we asking countries to overstretch their capacity in a context of money scarcity?
At this point, we cannot ignore that African leaders must also take the ball and own domestic health financing. The ultimate takeaway is clear: to ensure the resilience of health systems against future shocks, the urgent dialogue on mobilising endogenous resources must now turn into decisive action.
