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Fiscal Space Analysis for Health 2020

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Fiscal Space Analysis for Health 2020 Fiscal Space Analysis for Health 2020 Islamic Republic of Afghanistan Contents Figures ............................................................................................................................. 3 Abbreviations .................................................................................................................... 4 Acknowledgements ........................................................................................................... 5 About this report .............................................................................................................. 5 Executive Summary .......................................................................................................... 5 1. Introduction .................................................................................................................. 7 2. Purpose and Objectives ................................................................................................. 8 3. Conceptual framework, data sources and limitations ..................................................... 9 3.1. Conceptual framework ............................................................................................ 9 3.2. Data sources .......................................................................................................... 9 3.3. Limitations ........................................................................................................... 10 4. Health system context ................................................................................................. 10 4.1. Health Financing .................................................................................................. 10 4.2. Health outcomes and future health needs ............................................................. 11 4.3. Health service delivery .......................................................................................... 11 4.4. Health workforce .................................................................................................. 12 4.5. Health information system .................................................................................... 12 4.6. Quality of health care ........................................................................................... 12 4.7. Essential medicines .............................................................................................. 13 4.8. Governance .......................................................................................................... 14 5. Main Findings: Macroeconomic Prospect and Fiscal Space ........................................... 14 5.1. Economic growth .................................................................................................. 15 5.2. Inflation ............................................................................................................... 16 5.3. Government Revenues for Health .......................................................................... 17 5.4. Debt and fiscal balance ........................................................................................ 18 6. Re-prioritization of health ............................................................................................ 19 7. Health sector specific resources: Where we are now? ................................................... 21 8. Health sector specific Grants and Foreign aid .............................................................. 25 9. Efficiency .................................................................................................................... 25 9.1. Technical efficiency .............................................................................................. 26 9.2. Allocative efficiency .............................................................................................. 27 10. Potential for Fiscal space enhancement ..................................................................... 28 Scenario 1. Potential increases in fiscal space from economic growth............................ 28 Scenario 2. Potential increases in fiscal space from increased government revenue proxied by total government expenditures ................................................................................ 29 Scenario 3. Potential increases in fiscal space from re-prioritization of the health sector according to targets ..................................................................................................... 30 Scenario 4. Elasticity of government health expenditure with respect to GDP ................ 32 Scenario 5. Allocation of 5% of GDP to Health Sector (World Bank) ............................... 33 Scenario 6: Military and public security cost reduction ................................................ 34 11. Conclusion................................................................................................................ 36 2 12. References ................................................................................................................ 38 Figures Figure 1. Macroeconomic and Health Fiscal Space Indicators ........................................... 15 Figure 2. Gross domestic product per capita, 2010-2019 ................................................. 15 Figure 3. Real GDP growth, GIRoA, 2005-2024 .................... Error! Bookmark not defined. Figure 4. Consumer price index, 2005-2024 ........................ Error! Bookmark not defined. Figure 5. Health Government budget, MoF ...................................................................... 18 Figure 6. General government debt (% of GDP), 2006-2019 .............................................. 18 Figure 7. General government debt (% of GDP), low-income countries .............................. 19 Figure 8. MoF Budget by sector, 2019 (% of total budget) ................................................. 20 Figure 9. Defense and Health budget, MoF ...................................................................... 20 Figure 10. MoF Budget by sector ..................................................................................... 21 Figure 11. Classification of different sources of government revenues ............................... 22 Figure 12. GIRoA MoPH Budget and Expenditures, 2005-2019Error! Bookmark not defined. Figure 13. Potential increases in fiscal space from economic growth ................................. 28 Figure 14. Potential increases in fiscal space from increased total government revenue .... 29 Figure 15. Potential increases in fiscal space from re-prioritization of the health sector .... 31 Figure 16. Elasticity ........................................................................................................ 32 Figure 17. WBG recommended 5% of GDP ....................................................................... 33 Figure 18. Fiscal Space Analysis ..................................................................................... 35 3 Abbreviations ARTF Afghanistan Reconstruction Trust Fund BHC Basic Health Center BPHS Basic Package of Health Services CHC Comprehensive Health Center CIT Corporate Income Tax CPI Consumer Price Index DBD Development Budget Department DHIS2 District Health Information Software DH District Hospital EPHS Essential Package of Hospital Services EMIS Expenditure Management Information System EU European Union GDP Gross Domestic Product GDPA General Directorate of Pharmaceutical Affairs GF Global Fund GFF Global Financing Facility GIRoA Government of the Islamic Republic of Afghanistan HEFD Health Economics and Financing Directorate HFPM Health Financing Progress Matrix HF Health Financing HFS Health Financing System HMIS Health Management Information System HSS Health Systems Strengthening HSR Health Sector Resiliency ICT Information and Communication Technology IFI International Financial Institutional IRoA Islamic Republic of Afghanistan IPEHS Integrated Package of Essential Health Services MoPH Ministry of Public Health MoF Ministry of Finance MoD Ministry of Defence MoI Ministry of Interior MoHE Ministry of Higher Education NCD Non-Communicable Disease NGO Non-governmental organization NHA National Health Account NHMRA National Medicine and Health Products Regulatory Authority NSA National Security Council OOP Out of Pocket PCH Partnership Contracts for Health PETS Public Expenditure Tracking Survey PIT Personal Income Tax PHC Public Health Center PFM Public Finance Management PMO Performance Management Unit RGSF Revenue Generation Strategic Framework for Health Sector SDG Sustainable Development Goal SHC Sub Health Center SOP Standard Operational Procedure TB Tuberculosis UHC Universal Health Coverage USD United States Dollar USAID United States Agency for International Development VAT Value Added Tax VHI Voluntary Health Insurance WBG World Bank Group WTP World Food Organization 4 Acknowledgements Thanks are due to all in-country stakeholders who have contributed to the development of Fiscal Space Analysis in Afghanistan, specifically to the Health Economics and Financing Directorate (HEFD) and Policy and Planning in MoPH, MoF and WHO country office in Kabul and WHO EMRO in Cairo. Financial and technical support from the WHO Afghanistan is gratefully acknowledged. About this report This report on fiscal space analysis, produced for the second time in Afghanistan, assesses the various options of increasing fiscal space to finance health in Afghanistan, addresses current barriers and ways to incentivize government
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