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T-shirts, condoms, grant proposals and 20,000 people. It must be the International Aids Conference in Toronto this week. This is the biennial jamboree for what now constitutes an “Aids industry” engaging everything from big pharma to “anthropologists for sex workers’ rights” groups. Nearly every participant makes a living in this industry.

In 2004, 21 per cent of all health aid was allocated to HIV, up from 8 per cent in 2000, according to the Organisation for Economic Co-operation and Development. It could now exceed a quarter of all health aid and is the only disease to have its own United Nations agency, UNAIDS.

Is this justified? In 2001, HIV/Aids represented 5 per cent of the burden of disease in low and middle-income countries as measured by disability-adjusted life years lost, a measure combining reduced life expectancy and quality of life. This compares with 3 per cent each for tuberculosis and malaria, and 6 per cent each for respiratory infections and perinatal conditions. Are HIV interventions so much more cost effective to justify this disproportionate spending? Probably not. Comparable costs per death prevented are lower for immunisations, malaria, traffic accidents, childhood illnesses and tuberculosis than for HIV. Moreover, HIV incidence (new infections per year) has peaked already in Africa, a fact not widely promoted by the industry.

Could this money be spent better? The bottleneck to improving health is that the services delivery systems of sub-Saharan Africa cannot turn funding into outputs. Public sector capacity is constrained by flawed organisational structures and lack of infrastructure and staff. Yet in 2004, while HIV received 21 per cent of health aid, only 2 per cent was directed at infrastructure and education, training and development of health workers – down from 3 per cent in 2000 – and virtually nothing at improving the private sector where most people now turn for care.

While much of the surge in HIV funding is attributable to a highly successful lobby including UNAIDS, some results from donor frustration at the lack of reform in government organisations. At least, donors say, we can save some lives through investing directly in prevention and treatment. Unfortunately, disease-specific funding such as that for HIV is making things worse by creating policy, programming and financing in parallel with those for basic health services. Funding for preventing mother-to-child transmission, for example, is not strengthening maternal and child health services including antenatal care, where the testing of pregnant women must become part of normal business if transmission is to be reduced. More­over, there are opportunity costs: high spending on HIV is attracting staff away from other programmes.

Two big changes are needed if the rich world’s recent concern with the health of Africa is to achieve results. First, there must be country mechanisms integrating all health funding and allocating it where it will do most good, whether to state or non-state service providers. There have been attempts at this with so-called sector-wide approaches in which all donor and government funding is pooled and spent according to an agreed strategy. They have had some success but have been weakened by lack of co-operation by some donors and by being managed by health ministries with vested interests. But they have potential. A small Caribbean island, Anguilla, is engaged in a bold programme in which healthcare is no longer provided directly by government. An independent national purchasing agency will receive all health funding, combining government revenues and social health insurance contributions, to procure care for the population by contracting the best value-for-money services available.

The second big change needed is in the structure of aid. Independent national purchasing agencies would impose some discipline on donors, many of whom over-fund HIV programmes because it is fashionable. But the roles of key players are unclear and their structures deficient. Some 75 global funds and partnerships target single communicable diseases, creating massive co-ordination challenges at country level. The UN remains rooted in public sector thinking, with the UN Development Programme promoting ever more funding for policies that have failed. Why is the UN running projects (using donor funds) when there are national and international private organisations that do it better? Vast swaths of the UN’s Aids-related bureaucracy could be abolished or privatised. However, there is no international agency capable of supporting health-sector restructuring. The World Bank could shift its focus but this would require changes in its skills base and a structural shift in its modus operandi from project funding to strategic support. Rationalisation of the UN and international agencies is needed and must be led by the donors, for the agencies have no incentive to reform themselves. After Toronto, donors could make a start by questioning why we have UNAIDS, the agency promoting HIV as exceptional instead of just another disease, resulting in distorted funding and weakening health systems.

The writer was founder and director of HLSP, a specialist healthcare consultancy, and is forming a new institute on health policy in developing countries

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