An overview of aid spending on health
Ensuring people are healthy is recognised as an essential role of sustainable development. Access to healthcare at the individual level, as well as wider health investments in areas such as the prevention of diseases and health system strengthening, are key social sector interventions for improving quality of life and wellbeing. Good health can contribute to economic development, for example by increasing labour productivity and educational attainment. Furthermore, in the context of the coronavirus crisis, investments in the health sector are critical to:
1. contain and respond to the pandemic
2. mitigate the impact on other health issues, due to health systems being overwhelmed, reallocation of resources towards coronavirus or more restricted global and national access under quarantine measures.
Global growth in domestic and international health sector spending has been at 3.9% annually since 2000, outpacing wider economic growth over the same period (3.0% annually); however, the volume and source of finance available for health can vary substantially between different countries. Presently more than half of health expenditure within high-income and upper-middle-income countries is from domestic public sources, whereas the same source of expenditure accounts for less than a quarter of health expenditure in least developed countries (LDCs). This group of countries experience severe structural impediments to sustainable development and are highly vulnerable to economic and environmental shocks. Domestic government expenditure on health in LDCs was PPP $29 per capita in 2017 – more than 100 times lower than in high-income countries (PPP$3,692 in 2017). Available domestic resources for health often do not reach internationally recognised spending targets. The 2001 Abuja Declaration’s target of health expenditure making up 15% of total government expenditure has been met by only 4 out of 82 countries with LDC, low-income or lower-middle-income status.
Official development assistance (ODA) is an international resource provided largely by the Development Assistance Committee (DAC) donors and multilateral bodies. It is aimed explicitly at the economic development and welfare of developing countries, and therefore well positioned to target places where need is greatest. Given the shortfall of domestic public resources required to fully meet healthcare needs, ODA towards health can be a significant resource within certain country contexts. While ODA accounts for 1.5% of health expenditure within all developing countries, it makes up a fifth of health expenditure within LDCs.
This paper examines key trends in ODA to health, using the latest data to assess who the major donors are and where health ODA expenditure is disbursed, at the recipient and subsector level. Knowing where need is greatest and what form of investment is required (from emergency support to longer-term health systems strengthening) is key to ensuring that support is well targeted. To learn more about how health ODA is targeted, you can read our factsheet Targeting health ODA to need: Spending by country and disease’.
Key facts about aid spending on health
Aid accounted for 1.5% of health finance in developing countries
Estimated financial resources to health in ODA-eligible countries stood at US$1.5 trillion in the latest year for which data is available. ODA accounted for 1.5% of the total financial resources for health available within developing countries, and domestic forms of health expenditure accounted for 98% of health financing (see Figure 1).
Aid to health has grown over the last decade, peaking in 2017
ODA to the health sector between 2009 and 2018 has generally increased (see Figure 2). Levels peaked in 2017 at US$24.4 billion, before falling by 9% to US$22.2 billion in 2018. However, while total volumes of health ODA have increased since 2009, health sector ODA as percentage of total ODA remained unchanged over the last decade: levels were 13.1% in 2009 and 13.0% in 2018.
The top three donors accounted for 60% of aid to health in 2018, and the top 15 accounted for 90%
A significant proportion of ODA to this sector is concentrated among a small number of actors (see Figure 3). The top three donors are the US, the Global Fund and the UK; together they provided 60% of health ODA in 2018. The top 15 donors provided 90%.
Health aid supports a variety of subsectors; over half of health ODA is focused towards combatting diseases, however funding to this decreased between 2017 and 2018
Health ODA is focused towards a number of subsectors, including the control of specific diseases, basic health, reproductive health and general health (see Figure 4). Reported levels of ODA towards sexually transmitted disease (STD) control – including HIV/Aids, malaria, tuberculosis and other infectious diseases – decreased by 15% between 2017 and 2018, reducing from US$13.3 billion to US$11.2 billion (see Figure 5).
• Over half of disease control funding is spent on HIV/Aids
• Aid to basic health has decreased by 14% since peaking in 2017
• Aid to general health has increased year on year since 2015
• Public institutions are the dominant channel for health sector ODA
Over half of health aid went to sub-Saharan Africa in 2018
Over half (53.7%) of health ODA in 2018 was disbursed to sub-Saharan Africa, totalling US$11.9 billion (Figure 9). The largest recipient country of health ODA in 2018 was Nigeria (US$951 million). Ethiopia and Tanzania were the second- and third-largest 2018 recipients (nine of the top ten recipients were in Africa).
Aid to health has fallen in a number of the largest recipients since 2017
Overall, out of the top 25 recipients of health ODA in 2018, 6 recorded increases in ODA since 2017 and 19 experienced decreases (Figure 10).
Source: Development Initiatives