Bience Gawanas, Vice-Chair of the Global Fund Board, opened the final session of the GLN’s Domestic Resource Mobilisation Webinar Series with a strong message: investing in women, children, and adolescents isn’t just important—it’s essential for Africa’s future. She emphasized that when we delay these investments, the consequences can be felt across health systems, societies, and economies for decades.
This discussion brought together health financing experts, government officials, and civil society leaders during a hybrid session at the World Health Summit in Nairobi. The focus was on how debt swaps can be a smart way to shift funds into health investment, particularly for women, children, and adolescents.
The Case for Debt Swaps
Debt levels in developing countries have skyrocketed since 2009. In many cases, debt repayments now exceed spending on crucial health and social services. With official development assistance shrinking, health systems are feeling the squeeze.
Gawanas pointed out that debt swaps are not a fix-all for debt issues but a method to direct resources where they are most needed. When structured properly, these swaps can quickly translate limited funding into impactful health programs.
Vlassis Tigkarakis, from the Global Fund’s Debt2Health initiative, shared how debt swaps operate. The Global Fund has created a pathway to convert approximately half a billion dollars in bilateral debt into about $330 million in health funding across 11 countries. By negotiating with creditor nations, such as Germany, Spain, and Italy, they cancel portions of sovereign debt in exchange for investments in health projects.
However, Tigkarakis highlighted that negotiations can take one to three years, and the process needs strong political will and collaboration between various government ministries.
Girmaye D. Dinsa, a Health Financing Advisor from Ethiopia, shared the challenges Ethiopia faced while implementing the Debt2Health mechanism. The country started engaging in 2007 but hit roadblocks. It wasn’t until the Global Fund became involved that the deal moved forward. Dinsa showed the importance of a robust collaboration between the Ministry of Finance and the Ministry of Health for these swaps to be effective.
The Role of Civil Society
Dr. Rose Oronje, from the African Institute for Development Policy, stressed that civil society organizations (CSOs) are vital in monitoring debt swap processes. They must ensure transparency and public involvement in these agreements. For instance, many countries have laws requiring public participation, but these laws aren’t always enforced.
Insights from the Gates Foundation
Adil Ababou from the Gates Foundation discussed the key factors that can make debt swaps successful:
Know Your Creditors: Not every country or health priority fits the debt swap model. It’s important to identify which creditors are amenable to these swaps.
Plan for the Long Term: Establish a vision for health improvements over decades, and focus on consistent funding for vital programs.
Boost Coordination: Countries likely to succeed in debt swaps are those that have solid teamwork between finance and health ministries.
Christoph Penn from Africa CDC clarified that debt swaps are different from debt cancellation. While cancellation means unconditional debt relief, swaps require the debtor to reinvest an equivalent amount in health.
The Path Forward
As the session wrapped up, moderator Rajat Khosla emphasized that successful debt swaps depend on political will and a well-structured approach. The future of health financing could shift dramatically if stakeholders align on these strategies.
“We’re at a pivotal moment,” Khosla noted, highlighting the need for thoughtful action on innovative financing to ensure everyone’s health needs are met.
Investing in the health of women and children is not just a policy goal—it’s a necessity for building resilient societies in Africa.
For more insights and detailed information, you can check out the Global Fund’s initiatives here.
