STATUS OF HEALTH FINANCING TRENDS IN UGANDA: EVIDENCE FROM SEVERAL ROUNDS OF NATIONAL HEALTH ACCOUNTS

The decline in GDP growth was mainly due to stalling of economic activities occasioned by measures introduced by the government including domestic lockdowns to mitigate the impact of the COVID-19 pandemic. GDP is, however, projected to grow by 3 percent in fiscal year 2021. The increase follows the modest recovery of 0.7 percent in the first half of the year and is spurred mainly by the partial lifting of domestic lockdowns. Uganda has one of the world's youngest populations, with almost half of its people under 15 years of age. The population increased from 24 million in 2002 to 35 million in 2014 and to 44 million in 2019. It is expected to rise to above 80 million in 2040, notwithstanding a declining fertility rate. The fertility rate was estimated at 5.7 children per woman in 2015, down from 6.7 in 2010. The annual population growth rate of 3.3 percent has resulted in a very high dependency ratio. To change the population structure faster, Uganda needs to accelerate the shift from high to lower levels of mortality and fertility. Uganda has made substantial progress in reducing poverty, but a third of the population still lives below the international extreme poverty line. The proportion of households living in poverty more than halved from 1993 to 2013, reducing poverty from 68.1 percent to 33.2 percent. Using the national poverty line, the incidence of poverty declined from 56.4 percent in 1993 to 19.7 percent in 2013. A large proportion of the population is highly vulnerable to falling back into poverty, as 43.3 percent of Ugandans live in non-poor but vulnerable households defined as living below twice the poverty line. With a Human Development Index of 0.544 for 2019 (ranked 159 of 189 countries and territories), Uganda is classified in the low human development category, as are most countries in sub-Saharan Africa. Although the score increased by about 70 percent from 0.320 in 1990, Uganda still faces significant development challenges. Between 1990 and 2019, Uganda's life expectancy at birth increased by 17.5 years (from 45.9 years to 63.4 years) while mean years of schooling increased by 3.4 years (from 2.8 years to 6.2 years) and expected years of schooling increased by 5.7 years (from 5.7 years to 11.4 years). Uganda's gross national income per capita increased by about 138.5 percent between 1990 and 2019. Uganda has made significant progress in addressing the health needs of its population. For example, physical access to health facilities has improved from 83 percent of the population living within five kilometers of a health facility in fiscal year 2012/13 to 86 percent in fiscal year 2016/17. Under-five mortality declined from 151 to 64 deaths per 1,000 live births between 2000 and 2016, and antiretroviral therapy coverage increased from 56 percent in fiscal year 2014/2015 to 88 percent in fiscal year 2015/2016. This progress has been achieved through investments made by the government of Uganda with significant contributions from development partners. Sustaining these gains requires not only increased investment but also more efficient investment in the years ahead to meet Uganda's ambitious health sector goals. The country's health financing system is mainly funded through households via out-of-pocket payments and donor contributions, accounting for about 80 percent of total health expenditures in 2018/19. The country has not met the Abuja target of allocating at least 15 percent of national government expenditure to health. Prepayment schemes are not yet developed in Uganda, with private voluntary insurance accounting for only 2 percent and 4 percent of total health expenditures in 2014/15 and 2018/19, respectively. Uganda should increase domestic spending on health to at least 15 percent of total government expenditure, as articulated in the Abuja Declaration, and explore other alternative financing mechanisms.