African Countries Divert Revenue To Financing Scheme | Independent Newspapers Limited
Newsletter subscribe


African Countries Divert Revenue To Financing Scheme

Posted: Sep 30, 2015 at 12:00 am   /   by   /   comments (0)

Four African countries have agreed to divert a portion of revenue from oil, gold and other resources to an innovative financing scheme that will tackle childhood hunger, the United Nations official behind the program said.

Mali, the Republic of Congo, Guinea and Niger will each year contribute a portion of sales from gold, oil, phosphate and uranium from their state companies. The countries will pay 10 cents for every barrel of oil and 60 cents for every gram of gold into a fund managed by the U.N. children’s agency UNICEF to buy nutritional supplements at a reduced price.

United Nations taps African oil, mineral wealth to fight hunger

“These extracted resources don’t just belong to the heads of state and the rich people,” Philippe Douste-Blazy, the U.N. under-secretary general for innovative finance for development said in an interview. “It is an investment for the African continent.”

An announcement will be made on Monday on the sidelines of the annual gathering of world leaders at the United Nations General Assembly in New York.

The scheme, called UNITLIFE, is expected to generate $100 million per year starting in 2017, said Douste-Blazy, a former foreign minister of France. He hopes to gradually add more countries, and said he was hopeful sub-Saharan Africa’s top oil producers, Nigeria and Angola, will soon sign on.

Douste-Blazy points to his success with a similar program that he helped launch, UNITAID, which provides long-term funding for the treatment of HIV/AIDS, malaria, and tuberculosis in developing nations and is managed by the World Health Organisation.

Most of UNITAID’s $300-million funding comes from a 1 Euro ($1.12) levy on air tickets from participants.

UNITLIFE will use the extractive industry levy to target undernourishment in early childhood that causes stunted growth, can lower a child’s IQ and is associated with a lifetime of increased health risks.

One in four people in sub-Saharan Africa is undernourished, while about 40 percent suffer from stunted growth, United Nations data showed. For the poorest countries, the economic cost is about 6 percent of their gross domestic product.

A 20 percent reduction in incidents of stunted growth could lead to an 11 percent rise in per capita income, according to UNITLIFE estimates.

Douste-Blazy sees innovative financing schemes such as UNITLIFE as a viable alternative to sovereign wealth funds for resource-rich countries that struggle to provide basic services, and is already at work on the next idea.

“The next big thing is education,” he said.