The increase in set-aside pledges
Article Number: 5
Transparency in the planned and actual use of set-asides is essential
Abstract: The Strategy Committee requested the Secretariat to provide an update on the issue of set-asides at the March Committee meeting. Under the Seventh Replenishment, pledges to date of total bilateral set-asides grew to about $700 million, which represents an increase of approximately 40% more than set-asides for Sixth Replenishment pledges. As Grant Cycle 7 gets underway, the Global Fund wants to ensure that these set-asides are aligned with the Global Fund Strategy and national strategies supported by Global Fund grants. This will require transparency and effective country-level coordination.
Under the Seventh Replenishment, pledges to date of total bilateral set-asides amount to around $700 million, which represents an increase of about 40% over set-asides for the Sixth Replenishment pledges. As Grant Cycle 7 (GC7) gets underway, the Global Fund wants to ensure that these set-asides are aligned with the Global Fund Strategy and national strategies supported by Global Fund grants. This is particularly important given constraints on other resources and ongoing challenges faced by countries.
The Strategy Committee (SC) requested that the Secretariat provide an update on the set-asides at the March SC meeting. This article summarizes the Secretariat’s update and reactions from stakeholders.
As the Global Fund’s Head of Donor Relations, Dianne Stewart, explained, the donors’ objective in making the set-aside pledges is to have the financial resources available to readily provide direct technical assistance support for disease programs, thereby facilitating more efficient and effective country level implementation. That said, the way in which set-asides are applied varies. Donor governments tend to channel the funds through their bilateral programs aimed at interventions that the donors want the Global Fund to work on. A good example is the United States Agency for International Development (USAID): a portion of the US set-aside is channelled through the US President’s Emergency Fund for AIDS Relief (PEPFAR) to support the Joint UN Programme on HIV/AIDS (UNAIDS) activities/implementation of Global Fund programs in selected countries.
The first issue is: should all of the pledged amounts that are announced (every cent) go through the Global Fund allocation process? From the Global Fund’s perspective, the choice is not about the percentage that should be given to it but rather that there is the risk that some of the set-aside amounts that will go through the bilateral programs may not be applied to support Global Fund interventions., even if that is the donor’s intention.
Another issue is that the use of set-asides alongside Global Fund supported programs makes country-level coordination all the more important; and coordination is already a challenge in many countries.
With the significant increase in the total amount of set-asides, the SC wants to ensure that the set-asides are applied in ways that are helpful to the Global Fund Strategy and the SC therefore wants to define parameters for the use of set-asides in the future.
There has always been and will continue to be a robust dialogue between the set-aside donors and the Secretariat. A roundtable is held with donors for them to present their intentions for the use of those funds. The donors discuss, advise on priorities, implementation gaps and weaknesses, and where they consider they can best provide support; and they discuss how to complement each other geographically.
If countries do not fully utilise the set-aside amounts, more than one of the donors has in the past given the remaining money to the Global Fund before the end of the allocation cycle; and it is hoped that this practice will continue.
Key to all this is: transparency in the way in which the set-aside amounts are being applied.
Status of pledges
While there was only a modest increase in allocations, there was a sharp increase in set-asides in the Seventh Replenishment, as the figures below show. Here you can see the difference in pledges under the two replenishments (Figure 1), and the comparison of the set-asides under the replenishments (Figure 2).
Figure 1: Comparison between Sixth and Seventh Replenishments’ Pledges
Source: Global Fund Secretariat
Figure 2: Sixth and Seventh Replenishment Set-asides
Source: Treasury data, External Relations; showing final set-aside figures as of 22 Nov 2022
Summary of GC7 set-aside landscape
While the details are still being finalized, there are significant differences across set-asides (Table 1).
Table 1: Overview of GC7 Set-asides