Africa is entering a critical period in the financing of its health systems. As governments face rising debt pressures, declining external assistance and growing demands for healthcare, the question is no longer simply how much countries spend on health, but how health spending can become a foundation for economic resilience and sustainable growth.
The challenge is substantial. The World Health Organisation estimates that about 385 million people in its African Region are pushed into or deeper into poverty each year because of out-of-pocket health expenditure. WHO data also show that out-of-pocket payments accounted for an average of 35.8 per cent of current health expenditure in the region between 2012 and 2020, well above the 15–20 per cent level generally considered necessary to reduce financial hardship.
READ ALSO: Capital Within: Unlocking Africa’s Trillion-Dollar Domestic Investment Opportunity
For millions of households, illness can therefore become an economic shock. Families may exhaust savings, sell assets or postpone essential treatment, reinforcing a cycle in which poor health and financial insecurity deepen one another.
Against this backdrop, the United Nations Economic Commission for Africa (ECA) is promoting a fundamental shift in how governments understand health expenditure. Its Transforming Health Financing in Africa initiative, running from 2026 to 2030, seeks to place health more firmly within fiscal planning and economic policy. ECA argues that health investment should be assessed not simply as a social cost, but through its contribution to human capital, productivity and inclusive growth.
In August 2026, ECA began its first country-level activities with Botswana, Ethiopia, Sierra Leone and Togo. The programme is using health-focused Social Accounting Matrices to help policymakers understand how health spending affects households, businesses, employment, government finances and the wider economy.
This approach could strengthen the relationship between finance and health ministries. ECA has called for a new fiscal compact in which finance ministries provide more predictable health allocations while health authorities demonstrate measurable results and efficiency. The commission argues that better data, expenditure tracking and digital systems can help governments identify financing gaps, reduce inefficiencies and ensure that resources reach the services where they are most needed.
Domestic financing remains central to this transformation. The 2001 Abuja Declaration called on African governments to allocate at least 15 per cent of national budgets to health. Yet progress has been uneven. WHO data show that only one country, South Africa, achieved and sustained the Abuja target between 2014 and 2020, while spending levels varied considerably across the continent.
The challenge has become more urgent as fiscal pressures increase. ECA notes that many African countries now face a difficult combination of rising debt-service obligations, constrained public finances and declining concessional flows. In this environment, protecting health budgets requires governments to demonstrate that healthcare is an investment in productive economies rather than expenditure that can simply be reduced during periods of fiscal pressure.
Regional cooperation can provide another avenue for progress. Africa’s dependence on imported medicines and pharmaceutical inputs exposes countries to supply disruptions, currency pressures and international price fluctuations. Strengthening local pharmaceutical manufacturing, expanding regional procurement and using the African Continental Free Trade Area to support health-related trade could help reduce vulnerabilities while creating jobs and industrial opportunities.
Digital governance will also be important. Better financial tracking can provide governments with clearer information on how resources move from national treasuries to health facilities. ECA’s use of economy-wide health accounting is designed to show not only what governments spend, but who benefits, what economic activity is generated and where financing gaps remain.
WHO is pursuing a complementary regional approach. In August 2026, African health ministers endorsed the Strategy for Financing the Future of Health in the WHO African Region (2026–2035), designed to help countries build more resilient and self-reliant health systems amid financial pressures, rising debt and declining external assistance.
The direction of travel is increasingly clear: Africa needs health systems that are financed sustainably from within, supported by stronger institutions, better data, regional cooperation and innovative financing.
The transformation will require political commitment and disciplined implementation. But the potential rewards extend far beyond hospitals and clinics. Healthier populations are more productive, children are better positioned to learn, households are less exposed to financial shocks, and economies become better equipped to withstand crises.
Africa’s health-financing challenge is therefore also an economic opportunity. By treating healthcare as an investment in people, productivity and resilience, African countries can move closer to systems that protect citizens while strengthening the foundations of long-term growth.
