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Analytical summary - Health financing system

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Health care financing in the WHO African Region is inadequate to the needs. This is indicated by the fact that the Region has access to only 1% of the world’s financial resources for health, despite accounting for more than 24% of the global burden of disease.

Per capita health spending has doubled to US$ 472 since the year 2000 at regional aggregate level. However, in more than half of the low-income countries, per capita expenditure on health is below the US$ 34 recommended by the WHO Commission on Macroeconomics and Health to provide an essential package of health services in low-income countries.

Government expenditure on health across the Region was less than 10% of all government expenditure in 2007 – far below the target recommended in the Abuja Declaration of allocating at least 15% of the national budget to health. Only three countries met the Abuja Declaration target of 15% in 2007. Six met it in 2006, so examination of the factors responsible for this fluctuation is needed.

General government expenditure on health as percentage of total government expenditure in the WHO African Region, 2000 and 2008

By far the largest share of African health care financing comes from private expenditure – at 32.5% significantly larger than government expenditure of 8.3%. The poor are therefore paying disproportionately for health care. Studies in some countries have found that most of the benefits of government spending on health go to the richest quintiles.

The high out-of-pocket expenditure by those on low incomes can result in catastrophic expenditure for poorer segments of the population. With few, if any, health social security mechanisms in place, informal organization takes its place, increasing the burden on the rural poor in particular. However, effective use of available funding is essential. Some countries achieve better results than others for less funding invested, indicating that questions of efficiency of use need examination.

Many African countries rely heavily on external resources. In 21 countries, external resources account for more than 20% of total health expenditure. Although external resources for health have increased steadily over the last 20 years, there is urgent need to protect these resources during the present economic downturn to prevent worsening of fragile health conditions in a number of countries.

Lack of government spending on health, coupled with high expenditure by individuals, increases impoverishment and impedes economic as well as health development. A clear summary of required actions is drawn up at the end of this section, based on the recommendations of major conferences and high-level statements and declarations. The way forward has been clearly defined; however, the question remains whether countries can act on these provisions with sufficient speed and effectiveness.