Uganda: Funding & Allocation of Resources


In Uganda, district and municipal governments provide most public sector health services. Three government ministries -- the Ministry of Health; Ministry of Finance, Planning and Economic Development; and Ministry of Local Government -- jointly allocate funds to local governments based on a resource allocation formula, which incorporates variables such as population, child mortality, topography, and poverty. These budgets are intended to support district health teams and publicly owned facilities to provide a minimum package of primary and secondary health care services. 15

How funding flows to health facilities 

Grants for primary health care are transferred quarterly to local governments.  The grants are intended to cover non-discretionary spending on wages and some non-wage costs, like conducting immunization outreach. Some local governments also receive discretionary development grants for infrastructure construction or rehabilitation. During an annual planning and budgeting process, individual facilities—with support from district health management teams—estimate the non-wage resources they will need to deliver priority services.  They are also required to make their budgets publicly available to all patients to improve transparency. 16

Unfortunately, the budgets allocated are often insufficient to deliver quality services. 17 Facilities have limited decision-making power on how they spend their budgets, 18 and the non-discretionary grants are not flexible enough for health facilities to adequately address specific local needs. Furthermore, there are often delays in the release of funds as well as discrepancies between the expected facility budget and the amount disbursed. 18

Diagnosing challenges in availability and flow of funds for primary care 

To better diagnose these problems, the MCSP project conducted a funding flow analysis in 2019. 17 This revealed that 39% of the national health sector budget in 2018 was allocated to primary health care grants (including district level hospitals). The vast majority of that budget (81%) was devoted to personnel costs. Forty percent of districts received a small amount of funding for infrastructure development. 17 Excluding salaries and drug-related costs, this translated to an average annual facility budget of $9,000 to $13,700. Qualitative interviews with a sample of health facility managers confirmed that these amounts were insufficient to deliver the full set of essential services, and that the funding shortage was exacerbated by challenges with stock-outs of key child health commodities, like amoxicillin dispersible tablets. There was a divergence between top-down budget decision-making processes and bottom-up planning processes by local governments and communities. 19

The analysis informed recommendations for strengthening national and sub-national financial planning processes and public financial management systems to improve the availability of funds to deliver essential primary care services. Uganda is moving towards developing budgets around clearly articulated outputs for each program. 17 This should help improve alignment between national and local resource needs, strengthen resource mobilization efforts, and improve accountability by linking financing to program-based outputs.