Low absorption rates for C19RM implementation

Author:

Aidspan

Article Type:

Article Number: 3

Why is the Global Fund requesting a Pandemic Fund grant when countries struggle to use existing funds?

As countries develop their funding requests under GC7, many are also undergoing a portfolio optimization of their COVID-19 grants. At the same time, countries have to decide their requirements for resilient and sustainable systems for health and ensure these are compatible with health system needs under C19RM as well as across the three diseases. This has not been an easy task and countries have had problems in reconciling the two. This article provides a brief update on C19RM implementation and questions the advisability of applying for yet more financial resources from the Pandemic Fund when current C19RM absorption rates are so poor.

Since our GFO on May’s Board meeting covered much on the COVID-19 Response Mechanism (C19RM), we thought it would be timely to provide you with an update. This is especially pertinent given that many countries are undergoing portfolio optimization for their C19RM grants as part of preparations for their funding requests under Global Cycle 7 (GC7); moreover C19RM absorption rates are low yet at the same time the Global Fund is applying for additional C19 resources from the Pandemic Fund.

On 19 October 2022, the Secretariat presented an update to the Audit and Finance Committee (AFC) and Strategy Committee (SC) on C19RM implementation, including the forthcoming C19RM portfolio optimization (PO) to progress with prioritizing investments in resilient and sustainable systems for health (RSSH) and pandemic preparedness. The need for reprogramming has arisen because, as the COVID-19 pandemic has evolved, countries’ needs have shifted towards strengthening health systems and pandemic preparedness. The Secretariat outlined its proposal, at that time still under development, to extend C19RM to the end of 2025. On 16 November 2022, the Board discussed and approved the proposed Extension of COVID-19 Response Mechanism Timeline and COVID-19 Operational Flexibility to 31 December 2025. We reported on this in our article in GFO 423, Countries should seize the opportunity to use the extended COVID-19 Resource Mechanism funds.

This extension has provided a unique opportunity for countries to reprioritize interventions that are in line with the systems strengthening and pandemic preparedness mandate of C19RM, complement investments in the next funding cycle and deliver on the objectives of the new 2023-2028 Global Fund Strategy.

So: what’s happened since then?

 

Secretariat update to the Board on C19RM

The Secretariat produces a regular update for the Board. In the last monthly update for February-March, published on 14 April, the Secretariat reported on the issues below.

Figure 1 reminds us of the initial total amount available for C19RM and how it was invested over the four-year period before the extension approval.

Figure 1. C19RM: $5 billion invested across three modalities

C19RM Portfolio Optimization Wave 1 Awards: Following the Board decision on the extension of C19RM, the Secretariat reviewed and awarded C19RM Portfolio Optimization (PO) Wave 1 with $547 million awarded to 40 countries and one multicountry grant. Applicants are being notified of awards on a rolling basis.

Figure 2. C19RM 2020 & 2021 Awards Pipeline (as of 28 February 2023)

Figure 3. C19RM PO Wave 1: $547 million awarded by region (as of 28 February 2023)

In terms of the Global Fund’s “strategic priorities”: C19RM PO Wave 1 investments support the strategic shift towards longer term investments and respond to countries’ needs. Awards prioritize resilient and sustainable systems for health (RSSH) interventions that simultaneously contribute to health system strengthening and pandemic preparedness – including laboratory systems and diagnostic networks, surveillance, oxygen and respiratory care, and community health workers (CHW).

Figure 4. $547 million Investment in Portfolio Optimization Wave 1: Reflects shift in funding needs

Figure 5. C19RM Portfolio Optimization Wave 1

1. Finance Update: The Global Fund has made cumulative disbursements of $1,825 million (63% of the cumulative budget to 31 March 2023). However, proximal financial data (31 December 2022) show that in-country absorption (ICA) remains very low at 37%, in part due to the decrease in demand for health products in the context of pandemic evolution. To align investments with the strategic shift to longer-term systems strengthening and pandemic preparedness, maximize implementation time and optimize fund utilization through 31 December 2025, an accelerated budget revision and reprogramming is underway. To date:

• 80% of the cumulative budget to 28 February 2023 has been committed, including orders placed in wambo.org, the Global Funds’ online procurement platform.
• Total cumulative disbursements of $1,825 million as of 28 February 2023, representing 78% of commitments and 63% of the cumulative budget to 31 March 2023.
• In-country absorption rate (based on December 2022 proximal financial data ) remains low at 37% due to lower-than-expected demand.
• Budget revisions and reprogramming are ongoing in 2023 to meet new ambitions for implementation through 31 December 2023.
• Reinvestment and portfolio optimization are expected to unlock the ability of implementers to gear investments towards emerging needs with higher impact and absorption potential.

Figure 6. C19RM extension reinvestment, PO and budget revisions

 Important Note: Proximal expenditure. is only available for High-Impact/Core countries representing 92% of awards. The pulse check compliance rate for Q4 is 94%. Consequently, the proximal expenditure is a representative execution rate triggering the action plan on reprogramming and optimization.

1. Health Products Pipeline: The Health Products Pipeline represents 63% of C19RM 2021 awards. $489 million ($476 million as of January 2023) of COVID-19-related health products have been delivered through the pooled procurement mechanism (PPM) with C19RM 2021 funds. The total non-PPM purchase orders reported through February 2023 were $242 million ($233 million as of January 2023).

Orders for $926 million ($913 million as of January 2023) of COVID-19-related health products have been placed through PPM/wambo.org since 2020, with $748 million delivered.

• $3 billion awarded since 2020 for the procurement of COVID-19 related health products (including C19RM 2020): Diagnostics: $1,017 million; personal protective equipment (PPE): $769 million; oxygen: $605 million.
• $259 million products delivered through PPM with C19RM 2020 funds; and $489 million ($476 million in January) products delivered through PPM with C19RM 2021 funds.
• Purchase Orders of $178 million for products remaining to be delivered ($734 million as of January 2023).

Figure 7. Cumulative health products update