Op-ed – Here’s how development aid will promote Universal Health Coverage

By Tonny Odokonyero

Development Aid for Health (DAH) still remains an integral part of healthcare financing in low and middle income countries. In Uganda, support from DAH accounts for more than 49 per cent of the national budget for the health sector (previous fiscal year). In this year, DAH is expected to support Uganda’s health sector to the tune of about Shs416 billion (more than 32 per cent of the health budget), which implies that DAH is still instrumental – especially in the short run – to the development of the health sector.

Existing evidence shows that aid is critical for achieving Universal Health Coverage (UHC) in a developing country like Uganda. This is because in the current fiscal environment, the amount of resources raised domestically is inadequate to finance quality healthcare services for the whole population, considering demands from other sectors.

Donor funding also supported healthcare related Millennium Development Goals (MDGs) such as maternal health improvement, child mortality reduction and halting the spread of HIV and malaria. Currently, most donor resources are directed towards supporting the achievement of healthcare related Sustainable Development Goals.

However, there are critical defects pertaining to aid effectiveness, which for example, affected the realisation of most health related MDGs. Some of the defects include poor aid allocation, poor aid project design and implementation, aid misalignment to national priorities, non-fulfillment of donor commitment, corruption and unsustainability of aid. Further, the extent to which aid addresses national priorities is a matter that donors and the government should fully and urgently address to ensure meaningful contribution of aid to the realisation of the country’s aspiration.

Uganda’s national healthcare priority at this time is the achievement of UHC by 2020 as embodied in the Health Sector Development Plan and the National Development Plan where the country’s aspiration is “accelerating UHC progress”. The aspiration entails achievement of coverage of quality essential healthcare services for all people in need, financial risk protection, and equity in healthcare coverage.

This ambitious healthcare goal calls for concerted effort and contributions from different stakeholders, sectors and development partners. The future of donor funding is unpredictable, sustainability not guaranteed. Accordingly, donor resources need to be harnessed in the short run to strengthen the health system to provide healthcare that can lead the country to UHC. Critical areas that need strengthening to accelerate UHC progress include the workforce, service delivery, health information system, leadership/governance, and financing.

Without adequate allocation of resources to bolster the healthcare system, the aspiration of UHC will remain a dream. Donor resources should therefore be tailored to effectively build the identified health system areas alongside other national healthcare UHC related priorities. To do this, donors need to embark on health aid allocation that is not politically-motivated, and in line with the national priority of UHC.

Relatedly, government needs to undertake far-reaching engagements with donors to bring national priorities at the forefront when conducting any foreign aid business. This includes revisiting aid allocation or funding mechanism by donors to guide possible reforms; refocusing donor funding on key drivers of UHC while ensuring efficient and effective utilisation of aid; use of aid to augment domestically pooled resources for health; supporting interventions for eradicating catastrophic health expenditure, for example, using DAH to develop domestic re-payment mechanisms or institutions; targeted interventions for expanding healthcare population coverage as well as eliminating health inequities.

Mr Odokonyero is a researcher at Economic Policy Research Centre – SPEED for Universal Health Coverage.