Africa requires at least $12 billion for its HIV/Aids response in the next three years to stem the scourge, although this financial injection is threatened as donors hold back due to mismanagement of funds.

The continent faces an uphill task to bridge the current gap of $4 billion, according to the United Nations Programme on HIV/Aids (UNAids), a shortfall that could cause more deaths.

The UNaids is proposing in a new report that African countries need to come up with new ways of mobilising for funds.

“Revenue could be obtained by taxing alcohol and tobacco consumption or the use of mobile telephones and public-private partnerships,” says the report adding countries could also tap into loans by the African Development Bank.

Misuse of funds

The 2011 Audit Report on The Global Fund to Fight Aids, Tuberculosis and Malaria shows Rwanda’s significant amounts of grant funds have been tied up to pay value added taxes (VAT) even as grant agreements provided for tax exemption on goods and services paid with grant funds.

Besides, there is slow recovery of VAT paid from the tax authorities. By December 31, 2009, the report estimated that $870,000 is pending to be recovered by the Program Management Unit rom the Rwanda Revenue Authority.

This figure does not include VAT paid by sub-recipients implying it would up to greater figures. The audit noted several cases of missing or inadequate supporting documentation for some grant expenditures in many countries including Rwanda, Kenya and Uganda. The Global Fund in 2005 suspended its grants to Uganda because of “serious mismanagement” of funds.

Uganda had promised to recover the outstanding funds that were misused since 2005 but $780,000 (61 per cent) as at June 2009 was still to be recovered and accountabilities amounting to $2.3 million still outstanding.

Three former Health ministers are currently facing charges of mismanagement of funds from the Global Fund.