Uganda Economic Update: Improving Public Spending on Health to Build Human Capital

Kampala, Uganda | © Sarine Arslanian/Shutterstock.com

KAMPALA, Uganda, 27 June 2024 -/African Media Agency(AMA)/-The Ugandan economy remains resilient and is growing amid intensifying climate shocks and a challenging global environment. The outlook is positive, buoyed by diversified exports and investments in developing oil export infrastructure ahead of the start of oil production in 2025, according to the new World Bank Uganda Economic Update: Improving Public Spending on Health to Build Human Capital. The report notes that real gross domestic product (GDP) growth accelerated from 5.3% in FY22/23 to an estimated 6% in FY23/24. The low inflation and recovery of real income and employment bolstered consumption, while private investment remained resilient despite tight domestic and global financial conditions. As a result, exports and manufacturing orders increased between August 2023 and May 2024. Per capita income reached about $980 in FY22/23, and continued growth will push Uganda closer to the lower-middle-income country threshold.

The Uganda Economic Update, now in its 23rd edition, is a twice-yearly analysis of Uganda’s near-term macroeconomic outlook. This edition projects a positive, though fragile, picture over the medium-term, with Uganda’s GDP growing by 6.2% in FY24/25 and accelerating to more than 7% in the medium term due primarily to investment in the oil and gas sector. This FY24/25 forecast has been revised downward slightly since the December 2023 edition of the Update because heightened geopolitical tensions led to an uptick in inflation, prompting much tighter monetary policies than were envisaged.

To sustain the resilience and achieve inclusive growth, the report says Uganda needs to manage its debt, strengthen revenue mobilization, improve public investment management, plan to better manage oil revenues, and invest more strongly in human capital development drivers, such as health. Uganda has a young and growing population and is prone to public health emergencies, yet its public spending on health is low and declining. At $6.8 per capita, Uganda’s investment in health is one of the lowest in the region. Currently, households and external development partners finance a combined 85% of current total health spending.

Although public spending on health is inadequate, it is relatively effective (Uganda’s Universal Health Care Service Coverage Index is similar to peer countries that spend more) and equitable (lower-level health facilities are accessed by the rich and poor). This is a gain that Uganda should expand on through policy reform that also targets enhanced investments in education and social protection to eventually reap a demographic dividend from its young and growing population.

For the health sector, the report recommends, among others, that the government should:

a)     Strengthen the health-financing system to enhance adequacy, equity, effectiveness, efficiency, and sustainability of health financing.

b)     Focus investments on primary health care, health promotion, and disease prevention and carefully managed investments in specialized healthcare.

c)     Strengthen public-private partnerships and collaboration for health.

d)     Improve the availability and productivity of the health workforce.

e)     Increase access to efficacious and affordable medicines and health technologies.

f)      Improve healthcare service quality and client engagement.

Distributed by African Media Agency on behalf of World Bank Group

The post Uganda Economic Update: Improving Public Spending on Health to Build Human Capital appeared first on African Media Agency.

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