At a Crossroads: Prospects for Government Health Financing Amidst Declining Aid

At a Crossroads: Prospects for Government Health Financing Amidst Declining Aid

Government Resources and Projections for Health (GPRH) Series

Report Data | Press Release

Investing in health is one of the most powerful drivers of human capital, growth, and job creation. However, low- and lower-middle-income countries are at a crossroads with growing economic uncertainty and sharp cuts to external aid. It puts further pressure on governments already struggling to finance and deliver universal health coverage (UHC). This report - part of an annual series - monitors the latest trends and provides an outlook on government and donor health spending in these countries.

Progress through 2024: Health spending remains far below the minimum benchmark needed to achieve Universal Health Coverage (UHC) and has stagnated since 2018.

• Government and donor spending remains far below the minimum needed to deliver a package of essential health services in 2024-less than one-third of the $60 required in low-income countries (LICs) and around half the $90 benchmark in lower-middle income countries (LMICs).
• Spending has stagnated while LICs and LMICs continue to face large UHC gaps, and with progress on UHC slowing since 2015.

Projections for 2024-2030: Most LICs and many LMICs are projected to face a decline in combined government and donor health spending by 2030.

• Government health expenditure is projected to grow by 14% in LICs and 17% in LMICs between 2024 and 2030, but this will be insufficient to significantly dent the UHC financing gap.
• However, combined government and donor health spending is expected to fall in 80% of LICs and 40% percent of LMICs by 2030, as sharp cuts to development assistance for health-projected to decline by around 20%-offset growth in government spending.

Government Health Spending is Well Below the Minimum Needed to Finance Universal Health Coverage

Source: From the report At a Crossroads: Prospects for Government Health Financing Amidst Declining Aid, page 40 (Figure 9. Annual per Capita Government and Donor Funding Compared to Minimum Benchmark Cost for UHC, 2018, 2024, and 2030 (projected), LIC and LMIC Median (in Constant 2024 US$)

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Country Prospects and Options: Countries have policy options to alter their trajectories by spending better and spending more on health under fiscal constraints.

• Doubling down on efficiency-by prioritizing primary healthcare, aligning remaining development assistance with domestic priorities, and improving budget execution -can help resources go further. Aid-dependent countries have a reform window to restructure their health systems as aid dwindles.
• But efficiency gains alone are not enough. Progress also requires spending more and it is feasible to raise the share of government spending for health in a third of LICs and LMICs; they have the fiscal space and underprioritize health compared to peers. Countries can also raise taxes on unhealthy products and undertake broader macro-fiscal reforms to create fiscal space.

While the challenge may appear daunting, bold reforms in health spending will deliver rapid gains by saving lives, creating jobs, and driving economic growth.

Health Expenditure Trends (2018-2030)

Track government health expenditure (GHE) and off-budget development assistance for health (DAH) in constant 2024 US dollars between 2018-2030. Click the region and income groups buttons below to filter the display.

Priority for Health and Projected Fiscal Space (2024-2030)

Hover over a country in the scatter plot to view projected growth in post-interest government spending between 2024 to 2030 and health sector's share in government spending in 2024. Compare your country with regional peers.

About the GRPH Series

The Government Resources and Projections for Health (GRPH) Series is an annual check on the ambition of universal health coverage (UHC) compared to the reality of government health spending in low- and lower-middle income countries (LICs and LMICs). The GRPH series also supports efforts to track progress towards the World Bank's target of providing affordable, quality health services to 1.5 billion people by 2030, and complements the Global Monitoring Reports on UHC. It builds on the World Bank's Double Shock Double Recovery (DSDR) series, started during the COVID-19 crisis to assess the implications of the macro-fiscal outlook on government financing for health.