IMPLICATIONS OF THE DECLINING HEALTH SECTOR SPENDING IN 8/23/2018 UGANDA By The Ugandan Delegation Parliamentary Budget Office-Uganda 23 rd August 2018 3 rd AN-PBO Conference 1
Situation Analysis Demographic Variable Proportion Projected Population (2015) Total population 100% 35,756,800 8/23/2018 Males 48.6% 17,377,805 Females 51.4% 17,915,056 Children under 1 year 4.3% 1,537,542 Children under 5 years 17.7% 6,328,954 Children below 18 years 55.1% 19,701,996 Adolescents and youth (young people) (10 – 34.8% 12,443,366 24 years) Expected pregnancies 5% 1,787,840 Women of reproductive age(15-49 years) 20.2% 7,222,874 2
Situation Analysis- Cont … Key interventions: • Scaled up immunization, including introduction of the pneumococcal vaccine 8/23/2018 • Increased use of Long Lasting Insecticide Treated Nets (LLINs), • Elimination of mother to-child transmission of HIV (eMTCT), and • Improved water and sanitation. • Training programs for skilled birth attendants and other health workers launched by the MoH 3
Situation Analysis-Cont … Trends In Newborn, Infant And Child Mortality In Uganda per 1000 live births 8/23/2018 4
Sector Objectives The overall strategic direction for the sector is provided by the strategic objectives of the HSDP namely; • To contribute to production of a healthy human capital for wealth 8/23/2018 creation through provision of equitable, safe and sustainable health services. • To address the key determinants of health through strengthening inter-sectoral collaboration and partnerships. • To increase financial risk protection of households against impoverishment due to health expenditures. • To enhance the health sector competitiveness in the region and globally. 5
Health Spending in Uganda FY 2010/11 – FY 2015/16 and FY 2016/17 - 2021/22 (Ushs. bn) 2000.00 1837.90 1826.10 1800.00 8/23/2018 1702.20 1600.00 1565.00 1400.00 1353.801332.90 1281.14 1270.80 1200.00 1127.48 1000.00 852.20 800.00 799.11 660.00 600.00 400.00 200.00 6 0.00 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22
Health Spending as a percentage of GDP 2.50% 8/23/2018 2.00% 1.92% 1.78% 1.61% 1.50% 1.29% 1.05% 1.00% 0.99% 0.86% 0.50% 7 0.00% 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22
Budget Proposals for the Health Sector Over the Medium Term (shs. bn) Category 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 Wage 373.0 384.1 400.8 418.4 436.9 456.4 8/23/2018 Non-wage 394.7 397.8 471.3 516.4 591.0 591.0 Domestic Devt 142.8 101.5 125.6 146.4 171.5 171.5 External Devt 903.1 912.7 681.1 457.2 124.9 82.4 Arrears 4.2 7.9 - - - - AiA 19.1 21.1 22.5 25.4 28.5 30.5 Total 1,837.9 1,826.1 1,702.2 1,565.0 1,353.8 1,332.9 Total Exp / GDP 8 1.92% 1.78% 1.61% 1.29% 0.99% 0.86%
Assumption and Questions Assumption: • There is a reduction in funding to the health sector by 7.47% (nominal) 14.54% (real), on annual average over the medium term. 8/23/2018 Questions: • What is the implication of declining funding to the Health Sector? • What happens to Labour Productivity, Real GDP, Employment and Capital Stock in the Country? • Which Sectors will be affected and to what extent? What happens? 9
Methodology • Utilized the Integrated Macroeconomic Model for Uganda • Macro and Computable General Equilibrium (CGE) models • Macro-Model to obtain a set of forecast results over a chosen 8/23/2018 time horizon • CGE model with Economic Agents (Producers, Investors, Household, Export, Government and Stocks) • CGE model with 72 commodities, • CGE model to create and run a baseline simulation • Using the CGE model, run a policy simulation incorporating the baseline features and a policy shock 10
Payment flows in CGE model (simplified) Factor Domestic Private Savings Markets Factor Wages Costs & Rents Gov. Savings Taxes Intermediate Households Government Sav./Inv. Input Cost Activities Transfers Private Government Investment Product Consumption Demand Consumption Markets Domestic Sales Imports Foreign Transfers Exports Foreign Savings Rest of the World
Impact on the Economy Percentage Change - Wages and Employment (Health Sector) 8/23/2018 12
Impact on the Economy –Cont.… Percentage Change - Real GDP, Employment and Capital Stock 8/23/2018 13
Impact on the Economy –Cont.… Employment in selected 8 sectors 8/23/2018 14
Conclusion • The health sector in Uganda has registered significant progress based on outcome indicators, however, sustainability of this 8/23/2018 progress will depend on how government sustains public investments and interventions that have propelled the country towards this progress. • Any decline in the productivity in the health sector has consequences in other sectors like Agriculture, Oil and Gas, and Manufacturing, as switches to construction and mining sectors. 15
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