Promoting health financing reforms to ensure sustainable progress

Government Contact

Dr. Ruth Nigatu

Chief of Staff, Ministry of Health

The Challenge

Building on progress in several key health areas, the government of Ethiopia developed a transformational plan for its health sector to further accelerate gains, with support from the Global Financing Facility (GFF) and other partners. The plan serves as Ethiopia’s investment case for women’s, children’s and adolescent health to help prioritize and guide where investments are needed to expand quality health services, particularly in regions with the lowest progress and the greatest financial needs. The GFF helped to facilitate significant reforms that narrowed health financing gaps and strengthened data systems for monitoring progress. In addition, the GFF helped to drive dialogue with the private sector to mobilize more investments in health. These efforts have contributed to better health outcomes, including service delivery, more attended births, increased use of contraception and improved participation of children under two in growth monitoring programs.

Country Leadership Drives Better Health Outcomes

Steady economic growth, combined with strong government stewardship, has enabled Ethiopia to achieve better health outcomes for women and children. Between 2000-2016, under-5 and infant mortality rates declined by 42 percent and 28 percent respectively. During the same time period, women’s fertility rate dropped from 5.5 to 4.6 children. However, Ethiopia is still lagging in several areas such as family planning, adolescent health and stunting. Ethiopia’s per capita spending on health stood at US$32, lower than the average in Sub-Saharan Africa and it is almost equally split among donors, out-of-pocket expenses and government resources. Domestic resources for health as share of total expenditure increased from 7.5 percent to 8.6 percent between 2000 and 2017 but was mainly driven by external resources channeled through the government (on-budget). Progress toward universal health coverage will require financing reforms to increase domestic resource mobilization for health and to align existing donor resources around equitable service delivery.

Spurring Health Transformation through Targeted Support

Ethiopia was the first country to join the GFF and its Health Sector Transformation Plan is designed to help the country reach universal health coverage by prioritizing expansion of equitable and quality health services and strengthening health systems and infrastructure. The plan is being implemented with the support of a US$60 million GFF grant which has mobilized a US$150 million contribution from the International Development Association (IDA), the World Bank’s fund for the poorest countries. It is also backed by the Sustainable Development Goals Performance Fund, a pooled fund with 11 donors managed by the Federal Ministry of Health.

In collaboration with partners and the World Bank, the GFF has played a key role in the plan’s implementation. Specifically, the GFF’s partnership with Ethiopia has helped to:

  • Incentivize results by incorporating relevant indicators in the World Bank project and linking payments to better outcomes.
  • Prioritize interventions in areas with the lowest progress, specifically family planning and adolescent health, and link payments to specific results. This has led to the development of the country’s first national adolescent health policy.
  • Narrow the gap in health outcomes between lagging regions and the rest of the country. For example, the GFF has supported the lowest-performing regions of Afar, Oromia and Somali to increase deliveries attended by skilled birth providers.
  • Strengthen health systems by allocating resources to pharmaceutical supply and distribution systems and health infrastructure. The GFF also helped to upgrade civil registration and vital statistics (CRVS), including helping the Federal Vital Events Registration Agency to transition to an electronic registration system.

Facilitating Health Financing Reforms and Enabling Private Sector Engagement

To help the government increase its own resources and use existing funding more efficiently, the GFF, with support from the World Bank and the Bill and Melinda Gates Foundation, has provided technical assistance and analysis to drive the dialogue on health financing reforms and identify funding gaps and barriers to efficient budget execution. The GFF also supported the nationwide expansion of the existing community-based health insurance, a voluntary health insurance scheme designed to reduce out-of-pocket payments for people in the informal sector.

With this support, the government has managed to implement specific health financing reforms:

  • Removal of financial barriers and increased service coverage: By the end of 2019, the community-based health insurance (CBHI) was expanded to five of the nine regions in Ethiopia, such as Amhara, Benishangul-Gumuz, Oromia, Southern Nations, Nationalities, Peoples Region, and Tigray, as well as the Addis-Ababa Dire-Dawa city administrations. This expansion resulted in coverage for 28 percent of the country’s population, compared to only about one percent of the population in 2015. Expanding the insurance program resulted in greater use of health services – visits to health facilities among those insured were 43 percent higher than the national average. Higher insurance coverage also contributed to reducing the share of out-of-pocket payments from 34 to 30 percent from 2010 to 2017.
  • Significant increase in domestic resources for implementing the investment case: In just over a year, domestic budget allocations to support the plan improved increased by 10 percent. This helped reduce the financing gap to implement the plan.
  • Established new public-private partnerships for health: A private sector health assessment was conducted to understand the enabling environment for leveraging private sector investment in health, including an assessment of regulations and policies needed to de-risk markets. This dialogue led to the creation of a federation for private sector stakeholders, which includes private hospitals, pharmaceutical companies, civil society organizations and others.
  • Improved data to inform decision-making: The GFF supported the update of the BOOST database which enabled the government to provide health financing data at all levels in a more systematic way to inform policy reforms. A service availability and readiness assessment conducted in 2019 with the support of the GFF partnership also showed that data collection, use and reporting had improved, with 84 percent of health centers reporting health data on time, exceeding the initial target of 80 percent.

Contributing to Improved Health Outcomes

The GFF partnership with Ethiopia has played a key role in the country’s steady progress towards universal health coverage. With GFF support, as of February 2020 Ethiopia had accelerated service coverage of maternal and child health services, exceeding targets outlined in the transformation plan.

Increased Antenatal Care, Assisted Deliveries, and Modern Contraceptive Use

  • The number of women receiving four antenatal visits increased from 32 to 43 percent. Similarly, the number of pregnant women receiving iron folic acid tablets grew from 42 to 60 percent.
  • Deliveries attended by skilled birth providers rose from 19 to 33 percent in the low-performing regions of Oromia, Afar, and Somali, and almost tripled from 18 percent to 50 percent nationally.
  • Use of modern contraceptive methods rose to 41 percent, with 27 percent of those women using modern injectable methods.

Improved Child Health

  • The number of under-two children enrolled in the Growth Monitoring Promotion program rose from 38 to 54 percent. In addition, the number of districts in more developed regions delivering vitamin A supplements to children more than doubled from 48 to 100 percent. Wasting prevalence also decreased by 3 percent to reach 7 percent in 2019.
  • Immunizations for under-two children improved across the board. The number of children receiving pentavalent 3 increased from 54 to 61 percent; two-thirds of children had received complete doses of the rotavirus vaccine and 60 percent received complete doses of the polio vaccine.

Strengthened Health Data

Health facility data collection, use, and timely reporting jumped from 68 to 84 percent between 2016 and 2018 (SARA 2018). The number of primary health care facilities having access to essential drugs increased from 42 to 48 percent (MoH).


Brendan Hayes


Dinksera Debebe Mekuria


INVESTMENT CASE: Ethiopia Health Sector Transformation Plan II


PROJECT portal: Health MDGs P4R Additional Financing

PROJECT APPRAISAL: Health MDGs P4R Additional Financing