A recent report by the World Bank has highlighted significant concerns regarding the future productivity of Ugandan children born in 2020. These children are predicted to achieve only 38% of their potential lifetime productivity if they had access to comprehensive education and optimal health. This alarming forecast is largely due to the ongoing inadequate investment by the Ugandan government in education, health, and social protection sectors.
The 2020 Human Capital Index (HCI) paints a troubling picture: the lifetime productivity of Ugandan children is among the lowest globally. The World Bank's 23rd Uganda Economic Update, titled "Improving Public Spending on Health to Build Human Capital," emphasizes the detrimental impact of insufficient spending on human capital development. Key health indicators such as child survival rates, stunting rates, and adult survival rates, alongside educational measures like average years of schooling and learning levels, were pivotal in forming this projection.
Uganda's child stunting rate under the age of five is the highest among countries included in the HCI, and its adult survival rate is notably low at 74%. These poor health metrics substantially contribute to the nation's low productivity. The World Bank's report underscores that Uganda's public health expenditure is minimal compared to similar countries. Currently, households and international development partners fund a combined 85% of Uganda's total health spending, with 84% of external health funding being off-budget. This lack of budgetary control limits policymakers' ability to reallocate resources effectively to meet urgent health needs.
The financial institution stresses that a greater proportion of health spending should be managed through the national budget to enhance public financial management. The government's allocation for health has been decreasing over recent years, dropping from 6.5% of total public spending in FY2014/2015 to 3.9% in FY2020/2021. Over the past decade, domestic health expenditures have consistently remained around 1.1% of GDP, never surpassing 2%. At these levels, Uganda is unlikely to achieve the health-related Sustainable Development Goals (SDGs).
Ms. Mukami Kariuki, World Bank’s Country Manager for Uganda, emphasized the crucial role of human capital in national development. She stated that while physical and natural capital are important, the core driver of growth is human capital—encompassing health, skills, abilities, and knowledge. She urged Uganda to boost investments in health, education, and social protection to ensure its youth are prepared to contribute effectively to the economy.
Highlighting the report's findings, Ms. Kariuki noted Uganda's vulnerability to public health emergencies, such as Ebola, against a backdrop of declining health investment. With a per capita health expenditure of just $6.8, one of the lowest in the region, there is a pressing need to increase public health spending. Despite these challenges, Uganda's Universal Health Care Service Coverage Index is on par with countries that invest more in health, demonstrating some efficiency in current spending.
Reform in health policy is essential for Uganda to harness its demographic dividend from its young population. Mr. Richard Kabagambe from the Ministry of Health mentioned that while health expenditure has quadrupled, a substantial portion is allocated to wages, with minimal investment in domestic health infrastructure.
Dr. Rogers Ayiko, a senior health specialist at the World Bank, recommended enhancing the health financing system to improve adequacy, equity, efficiency, and sustainability. He also advocated for investments in primary health care, disease prevention, public-private health partnerships, and improving access to affordable medicines and technologies. Strengthening these areas is critical for advancing Uganda's healthcare system and ensuring a healthier, more productive future for its population.
