Drops in Health Spending Jeopardize Recovery from Covid in Developing Countries

Without Significant Increases, a Full, Sustained Health and Economic Recovery is at Risk

WASHINGTON, September 21, 2021 – Despite what will likely be the fastest economic growth in the aftermath of any recession in the last 80 years, 52 countries are expected to reduce per capita government spending below pre-COVID levels over the next five years. Based on a new World Bank paper released today, this will leave them unable to finance their share of a COVID-19 vaccine roll-out, invest in better preparedness to protect themselves from future crises and make progress toward Universal Health Coverage.

According to “From Double Shock to Double Recovery: Widening Rifts,” governments will have to make bold choices to avoid falls in government health spending. In a group of 126 countries, per capita government spending is projected to exceed pre-COVID levels by 2026. In 52 countries, by that time, overall government spending will however remain below 2019 levels. A return to pre-COVID-19 growth rates in per capita government health spending in the poorest of these countries would require the share of spending assigned to health to almost double, from 10 percent to 20 percent.

“The economic shock from Covid-19 is threatening the capacity of governments to spend sufficiently on health, threatening COVID-19 recovery and health security for all,” said Mamta Murthi, World Bank Vice President for Human Development. “Cash-strapped countries will have to make tough choices in health investment to safeguard essential health services, stay on a path toward Universal Health Coverage, and build resilience for the future.”

While bringing the current pandemic to an end will require significant investments in vaccines and vaccination programs, countries must also build resilience by investing in preparedness and ensure affordable health services for their populations, especially poor people. Yet, according to the paper, this is becoming a near impossibility for some countries.

“The projected net growth in health spending during 2021 and 2022 will cover only 28 percent of the countries’ cost share of a vaccine roll out in low-income countries, and 43 percent in lower-middle income countries,” said Christoph Kurowski, lead author of the paper. “And the projected growth in government health spending in these countries by 2026 will cover approximately only 60 percent of the necessary annual investment to strengthen and maintain public-health preparedness and response capabilities.”

The Global Financing Facility (GFF), which supports the continuity of essential health services as part of COVID-19 response efforts, has been sounding the alarm of the secondary health crisis for vulnerable populations and the need to secure appropriate levels of financing to provide essential health services and respond to emergencies in the future.

While it won’t be easy to boost development assistance for health at a time when high-income countries are also struggling, they have a vital interest in supporting a global recovery. Progress toward Universal Health Coverage is critical for human capital development and a full return to inclusive growth everywhere. Only together, can countries bridge the health financing rifts to build a healthier, more secure, more prosperous future for all.

/Public Release. This material comes from the originating organization/author(s)and may be of a point-in-time nature, edited for clarity, style and length. The views and opinions expressed are those of the author(s).View in full here.