Fiscal Year 2020/21 Annual Health Sector Budget Performance Bulletin

This represents a more than four-fold increase in funds allocated to health over 10 years. However, when looked at as a percentage of the total government budget, allocations for the health sector actually declined over this same period. Health sector allocations averaged 7.6 percent from FY 2011/12 to FY 2021/22, reflecting a shift in government expenditure priorities away from service delivery and toward infrastructure and productive sector expenditures. Uganda's domestic spending on health falls short of international, regional, and domestic targets of 15 percent of the national budget. Despite being a signatory to the 2000 Abuja Declaration, an African Union pledge to allocate 15 percent of the national budget to health by 2015, Uganda's 7.6 percent allocation to health is far below. The largest share of the health budget is spent on recurrent expenditures, which increased from UGX 551.9 billion ($14.7 million) in FY 2012/13 to about UGX 1,673.3 billion ($447 million) in FY 2021/22, a three-fold increase. Health is traditionally a recurrent-heavy sector because of salaries for the large numbers of nurses and doctors needed to deliver healthcare services. The line item for wages in the recurrent health budget is high, accounting for an average of 48 percent of the total recurrent budget and 41 percent of the total health budget. Uganda's public health expenditures are funded by a combination of government and development partner resources. On average, 60 percent of the public health budget was financed by government resources between FY 2011/12–2020/21, while the remainder was financed by development partners. Development partner contributions have represented a substantial share of total health sector financing, expanding from 26 percent in FY 2011/12 to about 40 percent in FY 2021/22. This increase in donor dependency poses serious sustainability challenges, given that external funding is usually unpredictable and can adversely affect health service delivery. Examples of these challenges include the unpredictability of disbursement, the unclear period over which funding commitments will be sustained, and the potential for donors to tie aid to their own political goals. The budget process in Uganda follows a cycle that includes planning, budget formulation, budget execution, budget reporting and monitoring, and budget oversight and follow-up. The planning stage involves a review of plans for previous years, setting a framework for resources, objectives, policies, strategies, and expenditures, and aligning all to the Third National Development Plan (NDP III) and Vision 2040. The budget formulation stage involves the issuance of budget call circulars, the submission of policy statements by government ministries, departments, and agencies, and the approval of the budget by Parliament. Budget execution begins as funds are released to government ministries, departments, and agencies for implementation of the approved budget. Budget reporting and monitoring involve the quarterly, semi-annual, and annual monitoring of budget performance and the release of financial reports. Budget oversight and follow-up involve the checking of compliance to laws, regulations, and guidelines, and the conduct of internal and external audits.