Uganda's economic growth and public health

‘Without adequate investment in people's health, Uganda's economic growth agenda remains elusive'

By Chrispus Mayora

The government recently presented to the country, an approved national budget for financial year 2017/2018, in which it outlined the priority areas for the New Year.

While health was indicated as one of the priority areas, its share of the total budget was 5.7% (1.285 Trillion Uganda Shillings) - putting it fifth in the order of priority. For many years now, the government's fiscal focus has been on increasing investment in areas that are believed to stimulate economic growth and accelerate the attainment of middle income status by 2020.

As such, infrastructure, and power generation have received much more attention and resources at the expense of social sectors particularly health and education.

There has been an unresolved question in the economic growth and development debate, both at global and national level. This question is on whether investing more in "productive sectors" and less in the health sector can generate and guarantee sustainable growth and development. This article holds that a healthy population is the strongest foundation for the pursuit of sustainable economic growth and development. On this basis, the article argues that as long as investments in health continue to be limited, Uganda's pursuit of economic growth at both household and national level may well remain elusive.

Health is broadly defined not only as the absence of illnesses, but also the ability of individuals to develop their full potential during their entire lives. There is already reasonable evidence the supports the view that improvements in health as well as reducing the cost of care are positively related to economic growth prospects. 

Health is an asset that an individual possesses and any decline in health status affects the level of production and productivity. Better health reduces production losses due to worker illness and increases the productivity of an individual, lowers absenteeism rates at work and improves learning among school children. There are particular illnesses that affect children from poor families and these affect their cognitive abilities and cause them cause them to miss a considerable number of school days - implying that their future ability to generate income will be compromised. When a family is healthy, both the mother and the father can hold a job, earn money which allows them to feed, protect and send their children to school. If parents ensure that their children have a high probability of reaching adulthood, in general they will have fewer children and are able to invest more in health and education for each of them.

An analysis done around 2004 focusing on the economic costs and consequences of illness for households, due to malaria, tuberculosis (TB), and HIV/AIDS in low resource countries found that costs of TB and HIV/AIDS were more than 10% of the income, and that poor public health services, low coverage, high user charges, and poor quality of care, contributed to these high costs. More recently, a malaria impact study in Apac District, Northern Uganda, reported that up to 66% households spent about US$ 5.30 for outpatient treatment and US$ 6.70 when a child was admitted for malaria. Including indirect costs of illness in terms of work foregone while treating and attending to the sick child for example were quantifiably too high. Personal savings, money from business and selling assets were the most common funding sources.

Malaria control alone, has significant benefits to the economy. The Global Commission for Macroeconomics and Health in fact demonstrated that just a 10% decrease in malaria is associated with an increased annual gross domestic product (GDP) growth of 0.3%.  Better health also permits the reallocation and use of saved financial resources that would have been destined for the treatment of ill health. Global evidence shows that sustained improvement in health status captured by an increase in life expectancy from 50 to 70 years (a 40% increase) would raise the country's GDP growth rate by 1.4 percentage points per year.

These facts demonstrate just how fundamental health is, as an underlying precondition to economic empowerment, growth, development and social transformation. The facts also highlight the need to rethink the national resource allocation model with a view of refocusing attention to the health sector. There is an urgent need for substantial increase in health sector investments to increase access to preventive and curative health services. This will contribute to a healthy and productive population both now and in the future.

In a future article, I will discuss what optimal investments will be required in the medium and long term, and the strategic areas within the health sector that could offer greater returns to propel better health, economic growth and development for Uganda.

The writer is a lecturer and Health Economist - SPEED - Makerere University School of Public Health