It has long been recognised that poor households often pay disproportionally more for basic services. Since 2007 Australia and the World Bank have worked on innovative ways to deliver basic services in health, education, water and sanitation and infrastructure through the Global Partnership on Output-Based Aid (GPOBA).
GPOBA works with third parties (private companies, the public sector and Non-Government Organisations (NGOs)) to reach poor households which are excluded from accessing basic services because they cannot afford to pay user fees and where service providers cannot lower costs. Since 2007, Australia has invested $43 million in GPOBA and is one of the Partnership's largest donors. GPOBA's innovative approach to aid provision uses structured payments to provide incentives for the private sector to invest in infrastructure or services in areas which do not host such services. Such investments help poor households gain access to basic services, often at significantly lower prices. This not only results in better quality services to those who need it most, but also provides important financial savings for poor households.
Heathcare, specifically maternal healthcare, is vital to alleviating poverty. In Uganda, GPOBA has launched a successful project in maternal and sexual health. With the second highest fertility rate in the world, maternal health is a key sub-sector in Uganda's national approach to health. Maternal and perinatal health conditions account for over 20 per cent of total diseases in the country.
Partnering with Marie Stopes International Uganda, GPOBA developed a program through which women could buy vouchers for maternal health and sexual health services from private hospitals, clinics, nursing homes and midwives' facilities.
Each voucher costs much less than families would normally pay through private or public providers. Training and service provision resulted in 59,000 safe births as well as over 30,000 sexually transmitted disease treatments. Feedback from clients was overwhelmingly positive.
This project won the International Finance Corporation's competition Smart Lessons Private Sector Participation in Health. It recognised the impact that co-operative partnerships can have on achieving transformative development results.
This project is one success of output-based aid. Beneficiaries of GPOBA projects have increased from 800,000 in 2010 to over 1.9 million in 2011 in a range of sectors, from health and education, to infrastructure, water and sanitation.
Each project is designed to improve lives by providing the key elements to assist people to get out of poverty: good health, premised on a reliable water supply, sanitation and infrastructure, a good education provided in a way which stimulates innovation.
Output-based aid is one of a range of new financing options which Australia is working to mainstream, to ensure that aid is well invested and delivers results by working with all sections of the community, including the private sector, NGOs as partner governments.
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