Measuring health financing vulnerability due to reductions in official development assistance: A conceptual framework with empirical application across 47 African countries

Abstract

Despite a 33% increase in Official Development Assistance (ODA) from 2019 to 2023, aid declined by 7% in 2024 and projected to further decline in 2025-2027. Health systems in Africa are being impacted by the sudden aid freezes and cuts. There are no multicriteria metrics to estimate the vulnerability of countries to facilitate dialogue and decisions. This paper proposes an approach to assess country's vulnerability to external aid cuts, considering dynamic health financing and macro-fiscal risk factors. We proposed a framework using four proxy health financing and macro-fiscal factors. Using a polychoric principal component analysis to derive the weight of contribution of each variable, we parameterized the framework with data from existing databases. We applied the framework to assess the health financing vulnerability to external aid cuts/freezes across different countries and explored its validity. Health expenditure per capita in the WHO African Region averaged US$125.2 of which almost 24% depended on external funding. Almost 70% of countries face potential stagnation or contraction in public spending, while 49% of the countries are in debt distress or at high risk of debt distress. The interplay among these factors resulted in the vulnerability of countries averaging almost 60% (range: 23 - 92%), with 27 countries facing "very highly" or "highly" vulnerable health financing situations. Health financing vulnerability explained 31.4% of the variation in UHC attainments and 32.8% of the variation in the number of people pushed further into poverty. We conclude that low spending on health, high donor dependence and unfavourable macro-fiscal conditions, including debt crisis is driving heightened vulnerability across Africa. Countries need to protect essential health services by prioritizing the most vulnerable populations, protect their health budgets through increasing efficiency, generating new revenue through taxes, aligning external aid with national plans and priorities, and better pooling health spending.