From commitment to action:acting now to improve living
standards, health and education forall

Department for International Development
HM Treasury
September 2005

SUMMARY: THE POSITION NOW AND OUR PLAN OF ACTION
1.
In September 2000, the world community adopted the Millennium
Declaration and committed itself to the Millennium Development Goals(MDGs). If we are to achieve the MDGs by 2015, we must accelerate
progress dramatically in the coming decade.
2.
This year the European Union (EU) and G8 have committed to greatly
increase their support to the MDGs, particularly in Africa. Agreements
reached in the EU, and by other major donors at Gleneagles, will increase
annual official development assistance (ODA) by $50 billion by 2010. Half of
this extra money will go to Africa, thus doubling aid flows to the continent
where help is most needed. The G8 has committed to write off immediately
the debts of 18 of the world’s poorest countries, 14 of them in Africa. This isworth $40 billion now, rising to as much as $55 billion over 40 years as morecountries qualify.
3. We believe that by 2015 all children should have access to quality primaryeducation and should receive basic health care. These services should befree in countries that choose to make them free. The international community
has also committed to making substantial progress towards universal accessto HIV/AIDS treatments by 2010, and to give more support to implementing
the G8 water plan agreed at Evian. Economic growth in poor countries andmaking sure that all citizens benefit from growth is key to making thesehuman development gains fiscally sustainable. This in turn requires effective
infrastructure and a better investment climate.
4. Within developing countries, the political commitment to accelerating
progress is shared at the highest levels. However, to achieve results,
developing countries will have to make their national plans and policies more
ambitious. Major investments will be required across the board to deliver
improvements in health, education and growth. Higher spending on salaries
and other recurrent costs will be necessary, as will implementation of complex
policy and institutional reforms to improve governance and public service
performance.
5. None of these changes will take place unless developing countries areconvinced that donor commitments will be realised and sustained over thelong term. Many countries have already prepared ambitious plans but thoseplans are not fully funded. The credibility of donors’ commitments is being put
to the test – we need to ensure we deliver. This paper focuses on what we as
donors need to do now to enable developing countries to make more
ambitious plans, based on their own needs and priorities, to reach the MDGs.
The case for more aid has been accepted. What matters now is to save lives,protect people's health, get more children into school and teach them well,and eliminate poverty.

1Plan of action(1) Publish our commitments of aid by type and country over the next
three years and provide long-term indications of funding. Although wecannot budget more than a few years ahead, we can give clear long-term
indications of the funding we will give countries between now and 2010,
based on our stated plans and timetables to reach the UN target of giving aid
equivalent to 0.7% of GDP. The Development Assistance Committee (DAC)
should address this task when it meets in September. Financing plans shouldbe agreed in time for the Senior Level Meeting of the DAC in December 2005.
These plans must reflect country-level needs and include under-aided fragile
states.
(2) Fill financing gaps in existing poverty reduction strategies andsector plans, and finance more ambitious future strategies and plans.
The increased aid must be delivered flexibly so it can contribute to priorities
determined at the country level and build effective health and education
systems over the longer term. Where countries choose to promote universal
access to health and education by removing fees and charges, we should
provide finance to support this. We must also provide more effective support
to build state capacity to deliver improved services.
Education
Total aid for education may need to rise by $15 billion per year by 2010. At
least $10 billion may be needed to help all children to access a good-quality
primary education. These extra funds include the cost of supporting theelimination of school fees that are a barrier to education and providing
targeted financial support to increase demand for education, particularly forgirls. We must ensure an extra $3 billion is available by 2006-7 to fund theplans of the 60 countries identified by the Education for All Fast-Track
Initiative (FTI) as ready to scale up their primary education provision throughrealistic and practical plans.
This extra funding for education could deliver real improvements in outcomes,
including••••an additional 200 million children in primary schools, including atleast 110 million girls;
moves to eliminate the gender gap in primary enrolments in 50
countries;
expanded and better quality secondary and higher education in
30 countries, most of them in Africa; andimproved literacy skills for 550 million adults.

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HealthAn additional $20-25 billion per year of investment in health in low-income
countries would permit a massive expansion in the access to, quality of andresponsiveness of services. The extra funds would allow countries toeliminate fees, where they act as a barrier to access.
Improved outcomes could include:
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antenatal care for more than 14 million more women;
33 million more births attended by skilled health-care providers;
130 million more children treated for acute respiratory infections;a million more cases of tuberculosis diagnosed and treated; andcoverage rates for immunisation against measles and otherchildhood diseases reaching 73% and 81% respectively.

Infrastructure and economic growth
The World Bank’s Africa Action Plan says a further $6-9 billion per year
invested in infrastructure would assist in promoting higher levels of economic
growth and build capacity to trade effectively. This was also highlighted by
the Commission for Africa. We should ensure the Investment Climate Facility
and Infrastructure Consortium for Africa are operational by the end of this year.
There is a positive relationship between economic growth and increased
support for health and education . Economic growth is needed in all lowincome countries to sustain expanded services and to reduce poverty. Higher
spending on health and education in turn contributes to economic growth anddevelopment.
(3) Deliver long-term predictable aid in support of country-led plans.
Finance Ministers in developing countries will not be prepared to increasespending on the basis of short-term or unpredictable donor commitments.
Specific actions are required.
•••

Increase frontloading of assistance through theInternational Finance Facility or similar innovative financing
mechanisms. We should ensure additional finance is allocatedto countries where needs are greatest. Delivery of this aid must
support plans and priorities identified at the country level.
Secure agreement on 100% multilateral debt relief which will
release long-term, predictable funding which developing
countries can invest in poverty-focused measures.
Increase the proportion of aid provided in the form of cash
financing so countries can increase spending in key areas witha high poverty impact. Large increases in financing are required
to hire an additional 1 million health workers and 4 million
teachers in Africa alone. Yet, less than half of development
assistance in these sectors is typically spent on strengthening
human resources.

3•

Improve predictability of aid through long-term financing
instruments. We should build on work being done by theEuropean Commission (EC) and the World Bank on instruments
to support long-term financing of core recurrent expenditures.
Concrete proposals should be discussed and agreed at the HighLevel Forum on Health in Paris and the Senior Level Meeting of
the DAC in December 2005.

(4) Ensure the international system works effectively to support scalingup.
Specific actions are required.
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•

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Discuss how different agencies (such as the UN, international
financial institutions and bilaterals) will support a country-led
approach to scaling up and improve overall aid allocation.
Take action to ensure global funds and partnerships are moreclosely aligned with country-led processes.
Implement the commitments on aid effectiveness made in Parisin March 2005.
Agree a system by December 2005 for monitoring
implementation of the Paris Declaration on Aid EffectivenessThis monitoring must cover levels of aid as well as indicators of
aid effectiveness. Regional and country-level approaches tomonitoring donor performance should be strengthened.
Independent and country-led reviews of donor performance
should be instigated, building on existing best practice (such asthat used in Vietnam, Tanzania, and Mozambique).
Strengthen donor accountability for results and delivery of more
and better aid, as proposed by the Development Committee
paper on Aid Financing and Aid Effectiveness.
Agree ways to strengthen the Africa Partnership Forum in
October to drive forward delivery of commitments on Africa.
Ministers should make this meeting a top priority and should
ensure the Joint Africa Action Plan is agreed and progress
monitored regularly.

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INTRODUCTION
6.
In September 2000, the world community adopted the Millennium
Declaration. Today, we have just ten years in which to take the actions
needed for all developing countries to meet the goals agreed at theMillennium Summit. We have already missed one goal – equal access to
education for boys and girls by 2005 – but important progress has been madein health, education, and poverty reduction. If we are to achieve our sharedgoals by 2015, we must scale up results dramatically in the coming decade.
7.
Fortunately, the political commitment to achieving these goals, througha closer partnership between developing and richer countries, has never beenstronger. The agreements reached in the EU, and by other major donors in
the run-up to Gleneagles, will lead to annual official development assistance(ODA) increasing by about $50 billion by 2010 compared with 2004. Half of
this increase is to be allocated to Africa, thus doubling aid flows to thecontinent where help is most needed to accelerate progress towards the
MDGs.
8.
Discussions also continue on innovative financing mechanisms which
could generate further increases in the volume of development financing andaccelerate the impact of the commitments we have already made. The
International Finance Facility for Immunisation will raise money on thefinancial markets on the strength of donor pledges. The G8 has agreed to set
up a working group to consider implementation of a wider International
Finance Facility and a solidarity contribution on plane tickets. The G8 hascommitted to ambitious goals in the areas of health, education, andinfrastructure, and help for developing countries to adapt to climate change
and improve the sustainability of investments in development. And for the firsttime, the G8 has spelled out actions in HIV prevention, treatment and care,with the aim of an AIDS-free generation across the world.
9.
The political commitment to do better is shared at the highest levels inthe developing world. Leaders of the developing world clearly recognise thatthey are responsible, first and foremost, for putting in place long-term
strategies to deliver accelerated economic growth and real improvements inpoverty outcomes, including in health and education. They are committed toaddress problems of governance and to strengthen the accountability ofdevelopment programmes to their citizens, including poor people.
10.
With the political commitments made, this paper focuses on the actionneeded to translate these commitments into results on the ground. The focus
is on action because we now have, together with the commitment to extra
resources, a large and strong body of analysis and evidence showing that
faster progress can be made, and what needs to be done to achieve it. The
Millennium Project of the UN, reports from the New Partnership for Africa’s
Development (NEPAD), the report of the Commission for Africa, the World
Bank's Africa Action Plan, and many other documents produced over the past
year provide practical and coherent recommendations on how countries anddonors can accelerate economic growth and improve human development in5

our shared pursuit of the MDGs. The reports emphasise the role of economic
growth in generating and sustaining human development and poverty
reduction, and the contributions of human development to economic growth.
They also highlight the fact that investing in water supply and sanitation andenvironmental sustainability can accelerate progress towards the MDGs.
11.
While keeping the focus on the need to rapidly scale up results inhealth and education, this paper recognises the cross-sectoral nature ofpoverty reduction. It emphasises the connections between economic growthand human development, and the importance of aid effectiveness. Much has
been learned about the importance of policy, governance and institutions, aid
allocation and aid quality, and we should use this knowledge to makeprogress towards the MDGs.

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MAKING AID MORE EFFECTIVE
We have a good idea of the resources needed
12.
The World Bank, in its Africa Action Plan, has estimated the projecteddemand for financing, constrained by estimates of the ability of Africancountries to absorb additional resources. Actual needs will depend on
countries’ own national strategies and priorities. However, the Africa Action
Plan suggests that education sectors can absorb an additional $3-5 billion
annually, health sectors can absorb $7-9 billion annually, and infrastructure$6-9 billion. We suspect these figures may turn out to be on the low side,
especially for education. Agriculture, environmental sustainability, social
protection and other investments can also make effective use of substantial
aid increases.
13.
The Commission on Macroeconomics and Health estimated the cost of
expanding a ‘package’ of health services at $35 per head in 2001. Recent
UNAIDS estimates are that achieving universal coverage of AIDS services
alone by 2010 would cost in the region of $10 billion. In the poorest countries,
health spending currently averages $8-10 per head each year. The financing
gap is significant, but an additional $25 billion invested in health in low-income
countries would significantly expand access to health services.
14.
Most recent assessments on education suggest that additional annual
external funding required to reach universal primary education (UPE) would
amount to $10 billion (in 2005 prices). The FTI has estimated that over the
next two to three years up to 60 countries – in which 65% of the world’s outof-school children live – will be ready with scaled-up education plans. An
estimated minimum of $3-4 billion will be needed from 2006-7 to support
these plans. Demand for investment in post-primary, higher education andadult skills programmes will bring the annual additional external financing
requirement to approximately $15-16 billion by 2010 (of which half will go to
Africa). (Further details on the financing calculations can be found in the
background paper on education.)
15.
There is increasing evidence that infrastructure investments are critical,
both for accelerating economic growth and for meeting the MDGs. For
example, better feeder-road links can reduce income poverty (MDG 1) and
improve access to schooling (MDG 2), a dependable and good-quality water
source reduces under-five mortality (MDG 4), and better sanitation improves
girls’ participation in schools (MDG 3). Despite these evident benefits, theshare of resources allocated to infrastructure fell in many poor countries
during the 1990s. In Africa, infrastructure spending fell from more than 4% of
GDP around 1980 to less than 2% around 2000. This has led the World Bank
to estimate that additional infrastructure investment of $20 billion per year to2015 is required to support an economic growth rate of 7%.
16.
Action is required to ensure that the chronically poor in all poor
countries benefit from progress. Hunger and malnutrition persist in all
countries and contribute directly to poor health and education outcomes and7lower worker productivity. Agriculture is recognised as improving poor
people's nutrition and incomes as well as economic growth. Land rights,
irrigation and micro-credit are all effective interventions, and have added
value in the context of the extraordinary pace of urbanisation in Africa andAsia, where slums are growing fast.
17.
The scaling up of aid provides an opportunity to find fiscal mechanismsthat will also have an impact on this hard-to-reach group, including the use ofsocial cash transfers directly delivered to poor households. Social transfers
can help poor people with the cost of transport to clinics or paying for
medicines after a consultation. They also contribute to nutrition and education
outcomes. Many countries use conditional cash transfers to encourage thepoorest children to go to school, or remove gender imbalances in school
enrolment. There are indications that injections of cash into communities
through social transfers stimulate local markets and economic activity.
18.
The economic benefits of investing in environmental sustainability(MDG 7) are also significant. For example, estimates by WHO of the rate of
return to investments in water and sanitation suggest a benefit-to-cost ratio of
7.5:1, with substantial regional variation about this average (Africa 11:1,
America (Central and Latin) 10:1, Eastern Mediterranean 35:1, and South
East Asia 3:1). Estimates of the rate of return for comprehensive coverage,
inclusive of water treatment and storage, are as high as 14:1. Similarly,
measures to control air pollution, manage forests and fisheries, wildlife,
wetlands and mangroves can all show high returns on investments. The
economic costs of not investing in MDG 7 are also high. For example, thecholera outbreak in Peru in 1991 (caused by poor water and sanitation) costthe economy an estimated $1 billion in lost tourism and agricultural exports inthree months.
19.
We know that the long-term fiscal sustainability of these plans depends
on economic growth. While higher aid flows allow low-income countries toincrease expenditure quickly, in the long term such costs will need to be
funded from domestic revenues. Economic growth expands a country’s tax
base and provides governments with the necessary additional resources tofinance health, education and infrastructure investments. Economic growth
also raises the incomes of poor people and improves their ability to pay for
activities and goods that improve their health and education. This growth will
be driven by the private sector, with the family farm the most important of theprivate-sector firms. Governments must be supported to create thegovernance and infrastructure and investment climate that will allow rural
enterprise to flourish.

8Much work has been done to assess the absorptive capacity indeveloping countries, which depends on policies, institutions andgovernance, and the quality of aid.
20.
Financing gaps in existing expenditure plans (such as poverty
reduction strategies (PRSs) and sector plans) provides the most obvious
opportunity for scaling up support and achieving results.
21. High-performing, relatively under-aided countries (such as Vietnam,
Tanzania and Ghana) can absorb significant extra aid. There are also
opportunities for significant increases in support to countries – such as Nigeria
and Ethiopia – that make a big difference to achieving the MDGs globally,
and where selected investments can be scaled up. Around 40% of the world's
poor people are in South Asia and there are major opportunities in this region
to support strong progress towards the MDGs.
22.
Although ambitions for scaling up aid flows will be more modest in
fragile states (such as the Democratic Republic of Congo, Chad andCambodia), targeted programmes in, for example, education, HIV, security
sector reform and infrastructure can offer scope for effective scaling up. Many
fragile states and countries emerging from conflict are relatively under-aided –the DAC Watch List on aid flows to fragile states is monitoring this. Fragile
states are the countries least likely to achieve the MDGs. People in thesecountries are less likely to go to school or to receive essential health care.
DFID research shows that nearly half of the children who die before the age offive are born in fragile states. Action is needed to make sure that thesecountries and the poor people in them are not left behind.
23.
Overcoming constrained absorptive capacity. Most countries willneed to overcome some constraints in scaling up aid. In some cases, they
may need to manage the potential negative macroeconomic impacts of higher
aid flows on the private sector (the so-called 'Dutch disease' effect). A
combination of trade and productivity policies can be effective in doing this.
At the sector and administrative level, lack of trained health and education
workers and weak government systems may constrain the pace of change.
National development strategies should identify and address these constraints,
and sequence reforms appropriately. Donors can help by providing long-term
support to build state capacity, and overcome key constraints on economic
growth and public service effectiveness.

9How we deliver additional aid will determine whether the MDGs areachieved or not
24.
Real cash for extra national spending. Scaled-up results in healthand education require increased spending on salaries and recurrent costs.
Recent World Bank papers on aid financing and aid effectiveness suggestthat disbursements of ODA have not translated into significant increases incash financing for the poorest countries. Much of the increase in ODA has
been for special-purpose grants, emergency relief, technical cooperation andadministration. This does not provide an effective financing base for scaling
up public expenditure or results.
25.
Predictable and longer-term commitments. Once developing
countries have increased spending on recurrent costs, it is extremely difficultand inefficient to ‘scale down’ expenditure if aid doesn’t materialise. This
would involve reducing the salaries of civil servants and laying off teachersand health workers. Therefore, for aid to be more effective it must be morepredictable, and commitments must be made for the longer term. It does notmake sense to ask developing country Finance Ministers to take on long-term
spending commitments based on short-term aid flows. These are decisions
that governments cannot take lightly. OECD Finance Ministers and donors
must find ways to support long-term planning and to deliver long-term finance.
26.
Backing country priorities and systems. The World Bank’s Africa
Action Plan flags the importance of keeping countries at the centre ofadditional resource delivery. Vertical funding mechanisms and parallel donor
projects can distort national planning processes and often undermine scarce
capacity of governments. Donors must scale up aid in ways that put
developing countries in charge of their own futures. Experience shows that
this increases aid effectiveness. It is also essential for addressing the crosssectoral challenges of reaching the MDGs.
27.
Delivering better aid. Donors must implement the commitments wemade in the Paris Declaration on Aid Effectiveness in March 2005, including
on providing more predictable, multi-year, untied, harmonised, aligned, andprogrammatic aid through developing countries' own systems and in supportof the priorities they have set out. We should monitor progress against
the Paris targets jointly with developing countries to strengthen mutual
accountability especially at country level. We should also continue to work in
the DAC and the multilateral agencies towards a more balanced result on aid
allocations.

10Box 1 – Policies and choices to scale up health outcomes(i)

Taking a multisectoral approach to improving healthoutcomes. Results depend on making progress in many areas
including economic growth, education, water, social protection,social exclusion and gender equality – any sector strategy mustassess these linkages and health must be mainstreamed incountry-led plans(ii)

Real progress depends on strengthening systems to deliver
universal access to basic health systems. In many developing
countries diseases can be prevented using known and affordable
technologies. A major challenge is to increase access to these
services through provision of basic preventive health services inremote areas. In many countries a binding constraint is shortagesof trained health workers. For sub-Saharan Africa to rise from its
current ratio of 1 health worker per 1000 people to a minimum
required target of 2.5 the region will need to add the equivalent of
1 million health workers between now and 2015. Investing inhuman resources for health is a high priority – this requires acomprehensive approach to improving pay, incentives and working
conditions as well as a long-term investment in post-primaryeducation and specialised training.

(iii)

Policies should consider options for improving access andequity in health care systems. No-one should be denied accessto essential health services because they are unable to pay forthem. Policies should consider how to remove barriers to people
accessing services, including financial barriers.

(iv)

Closing the financing gap. Financing of more ambitious policies
should consider the role of increasing domestic financing and thescope for efficiency savings as well as reliance on external donor
support. Different financing modalities can potentially be used toincreasing financing for health. A number of global funds andprogrammes exist that are focused on major diseases (such as the
Global Fund to Fight AIDS, Tuberculosis and Malaria). These
have had major achievements (such as raising awareness andstimulating development of new diagnostics) but have the potential
to distort priorities and undermine the capacity of ministries ofhealth for planning and financing. A key challenge is to overcome
the volatility and unpredictability of aid for the health sector. Only
when donor finance can be used to scale up recurrent
expenditure, particularly on personnel, and to provide financing forlong-term treatment such as AIDS treatment, will more aid really
begin to deliver results.

11Box 2 – Policies and choices to scale up education provision(i)

A multisectoral approach to achieving education goals isnecessary. Education outcomes are not achieved by investment in
the education sector alone. Improvements in rural roads, better
access to water and sanitation and child health programmes(including AIDS programmes) all have a positive impact on
education achievements.

(ii)

The priority for policies should continue to be to provide a quality
primary education for all children – but sustainable expansion
and long-term social and economic benefits will be achieved only
by taking a sector-wide approach to support for education.
Increasing investment in secondary, higher and adult education(including literacy programmes) is a growing imperative for many
low-income countries.

(iii)

Extra effort will be needed to reduce the disparity between thenumbers of girls and boys at primary and secondary levels –and their achievements. Successful policy measures haveincluded setting specific targets to reduce gender gaps; review ofcurricula and assessment systems to reduce gender bias; andsupport for ‘girl-friendly’ school programmes, including theprovision of separate sanitation facilities.

(iv)

The introduction of free primary education and targeted schemes
to reduce the indirect costs of education have a significant impact
on increasing the demand for education, as do social transfers.
Removal of user fees is best done in a rapid but planned approach
including measures to compensate schools for lost income.

(v)

Closing the financing gap. Detailed country-level analysis has
been completed of the additional financing required to enable theleast-developed countries to achieve the education goals. Many
countries have good plans that are ready to be put into action assoon as the finance is available. It is important for donors to
respond quickly to the demand, and not to create disillusion andchaos in partner countries. To avoid this, the extra funding should
be provided in the form of long-term, predictable financing(including for recurrent costs), channelled through government
systems wherever possible and deployed in support of country-led
education-sector development plans. The Education for All FastTrack Initiative has demonstrated that it is possible to deliver
finance quickly and effectively to support scaled-up country-led
plans.

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Box 3 – Policies and choices to accelerate progress on economic growthand infrastructure development(i)

Economic growth and poverty reduction are linked. Higher rates of
economic growth will improve health and education outcomesand vice versa. We must support action to foster economic
growth in individual countries. We also need action to support theparticipation of poor people in economic growth.

(ii)

Sustainable economic growth depends on a dynamic private
sector, stronger infrastructure, finance and security, and a goodinvestment climate, which avoids onerous and unnecessary
bureaucracy. According to the World Bank, 73% of investment isdomestic, producing local returns. The World Bank’s Africa Action
Plan also proposes creating an export push, to support regional
integration and to build the skills necessary for economic growth,particularly through expanding post-primary education.

(iii)

Countries differ greatly in the extent to which economic growth
reduces poverty. This points to the need for policies that facilitate
the participation of poor people in economic growth. The Africa
Action Plan highlights the importance of better humandevelopment outcomes in this context. It also stresses the need forpoor people to enjoy better connections to markets. In
particular, this calls for greater investment in rural roads. Tacklingsocial exclusion and providing better social protection will also be
important, along with stronger property rights for poor people andaccess to micro-credit.

(iv)

To achieve the 7% economic growth rates needed to halve income
poverty, Africa will need infrastructure investment of around $20
billion (extra?) per year, twice as much as the region has
historically been investing. The Africa Action Plan proposes
scaling up financing for infrastructure in sub-Saharan Africa toabout $2.4 billion by 2008.

(v)

Trade and regional integration are also important for economic
growth. The Africa Action Plan proposes increasing support for 23
sub-Saharan countries under the Trade Facilitation Initiative to$530 million (from $80 million). Rich country barriers to trade
should be lifted through the Doha and Hong Kong process.

(vi)

Progress in agriculture is another critical consideration in relation
to economic growth. This includes improved science andtechnology, investment in critical infrastructure (such as irrigation,water resource management and rural roads) and better
agricultural practices to improve productivity.

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Managing the risks of scaling up aid
28.
The action outlined above provides a credible way forward for scaling
up results in health and education and making progress towards all the MDGs
through economic growth and environmental management. However, there
are many risks involved in this process. There is the risk that expectations will
be raised and aid doesn’t arrive. There is the risk that aid will arrive in waysthat do not enable developing countries to scale up spending in critical areas.
There is the risk that increases in aid dependency will undermine adeveloping country’s sovereignty and independence. There is the risk that
dramatic increases in spending may lead to adverse macroeconomic
outcomes or undermine private-sector development. There is the risk that aid
will be misused by weak or corrupt governments.
29.
There is scope to manage all these risks through international andcountry-level processes. However this requires donors to deliver the right kindof aid on time. They must also create an environment in which developing
country governments are empowered to make decisions and given time tobuild delivery capacity. There needs to be a strong sense of mutual
accountability for results and for reaching the poor. Taking on and managing
these risks give us a chance of reaching the MDGs. Failing to rise to thechallenges of our goals and commitments gives us the certainty of failure.

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ANNEX 1: BACKGROUND ON USER FEES IN PRIMARY EDUCATION
There is a significant body of evidence which shows that the tuition fees andother compulsory charges are a very significant barrier to access to primaryeducation for poor children in low-income countries. Therefore, DFID
strongly supports the removal of official tuition fees and compulsory
charges in primary schools and encourages governments to do this.
The removal of fees can often boost primary school enrolment significantly but
substantial investment in service provision is normally required if a reasonable
minimum quality of education is to be maintained. Very poor quality primaryeducation jeopardizes the achievement of MDGs, for example by causing
drop-outs.
In most low-income countries, better off parents will pay more for better
quality education even at the primary level. Even the poorest parents facesome costs in sending their children to school when compulsory charges havebeen removed.
•

Tuition fees and compulsory charges are a significant barrier to poor
children’s access to primary school. Removing these fees and charges
will boost access.

•

It is estimated that $500 million per annum could pay for the removalof fees and charges plus a limited programme of subsidies targeted atpoor households across low-income countries.

•

Expanding service delivery in low-income countries so that reasonable
quality primary education is available to all is much more expensive. This
“universal access” is estimated to require an additional $10 billion
per annum in foreign aid, in addition to expected normal increases indomestic spending.

Therefore DFID supports “free primary education for all” meaning theremoval of tuition fees and other compulsory charges and costs, andinvestment in the expansion of service delivery to maintain or attain adequate
quality.

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ANNEX 2: BACKGROUND ON USER FEES FOR BASIC HEALTHCARE
Charging poor people fees for service can be a significant barrier to access tobasic healthcare. In most low-income countries, there has been little success
implementing fee exemptions and waivers for poor people. Therefore, DFID
strongly supports the removal of official health user fees and encourages
governments to do this.
Removal or reductions in charges increase the equity of access to services
but major improvements in coverage and access also require an expansion inservice delivery and improvements in quality. DFID will assist governments
which wish to implement a policy of removing user fees and expanding
services by helping to identify alternative sources of finance – including
taxation, aid which substitutes for taxation, and various forms of social or
private insurance, prepayment and risk-pooling.
In almost all low-income countries, healthcare is financed by some mixture of
public and private resources, and delivered by a mixture of public and private
providers. Patients pay for 60% of healthcare costs in Africa and 70% in Asia,
mostly when they access a service, either public or private. Irrespective ofwhether or not there are official user fees, there are other fees and charges
incurred by patients that serve as significant barriers to access to some, butalso amount to a significant source of revenue for service provision. DFID
encourages the governments of low-income countries to remove other fees
and charges incurred by poor people that prevent their access to basic healthservices.
•

Official user fees are a significant barrier to poor people’s access to basic
health services. There has been little success implementing fee
exemptions and waivers targeted on poor people. Removing theseofficial fees will boost access.

•

It is estimated that in DFID’s PSA countries (excluding China), removal of
official consultation fees would cost less than $100 million per annum
in lost revenue – a small sum compared to overall health financing.

•

Removal of official consultation fees, at a cost of $100 million per annum,
should not be equated with provision of “free Services for all”.
Progress towards universal access or coverage of basic services requiresa much more expensive expansion of service provision – The Commission
on Macroeconomics and Health (CMH) suggested that to provide a
package of basic services in low-income countries, an additional $40-52
billion would be required in addition to the substantial public andprivate financing that is already put into health.

16This means DFID supports “free services for all” meaning the removal of
official fees and other significant financial barriers to access for poor people,
together with investment in service delivery. DFID does not expect all lowincome countries to establish health systems in which all services are entirely
financed from taxation.

17