June 2020

2020 Health Budget Brief

ZIMBABWE

2020 HEALTH SECTOR BUDGET BRIEF1

2 ZIMBABWE HEALTH BUDGET BRIEF

Key Messages and Recommendations

v The MoHCC is crafting the next National Health Strategy. The strategy needs to focus onaddressing existing gaps, speak to emerging challenges and most importantly seek to sustain thegains achieved thus far, with respect to health systems strengthening and delivery of qualityhealthcare services.

v Health outcomes are improving, and efforts need to be made to safeguard these gains. Overall,the percentage of children that received vaccinations increased from 69.2% in 2014 to 76% in2019. Maternal mortality rates have dropped significantly from 614 deaths per 100,000 live birthsin 2014 to 462 in 2019.

v The 2020 health budget still falls short of the 15% Abuja Declaration Target. Though there was aslight improvement from 7% in 2019 to 10% in 2020, more needs to be done.

v Per capita spending in health care is below the WHO recommended threshold of US$86.However, Zimbabwe’s per capita allocation, which had improved to US$57 in 2017, is estimatedto have sharply declined to US$21 in 2020 which puts at risk gains made over the years.

v The expenditure mix has significantly improved. As a share of the total budget, capital expenditureallocation was doubled from 15% in 2019 to 32% in 2020. Though this is a welcome development,the fiscal consolidation and expenditure reorientation process should be gradual, as there is riskof disruption of service delivery as massive cuts in employment costs can result in disgruntlementdue to wage erosion.

v Rural Health Centres were only allocated US$16 million, which is 6% of the PHCHC budget or5% of the total health budget. There is need to boost government spending on rural health centresto avoid dependence on donor financing to be able to better cater for over 70% of Zimbabwe’spopulation that lives in the rural areas.

v Budget execution is weak as evidenced by the huge deviations of actual expenditure from theapproved budget. Overall, the 2019, budget underperformed by 6% compared to over expenditureof 20% in 2018. In 2019, the capital budget performance worsened, underperforming by 86%.

v Health sector financing has dropped significantly from an average of US$745 million over theperiod 2016 – 2018, to below US$500 million in 2020. Innovative financing is needed to quickenthe pace of health care progress and achieve equity.

UNICEF | JUNE 2020

1 Adjustment of figures into US$ for comparability was done using the IMF Article iv Report Exchange rates of ZWL$1.3 for 2017, ZWL$2 for 2018, ZWL$8.5 for 2019 and for ZWL$21.5 2020 per USD

2. BACKGROUND AND SITUATIONALANALYSIS

The National Health Strategy (NHS) (2016-2020) givesstrategic direction for the provision of healthcare services inZimbabwe. The strategy is aligned to the Sustainable

Development Goals (SDGs), particularly Goal 3 which aims at

providing equitable quality health care services to all

Zimbabweans, with a focus on promoting primary health care. The

key priorities are to reduce morbidity and mortality due to such

diseases as HIV, TB, Malaria and NCDs. The National Health

Strategy is in its last year of implementation, and the Ministry of

Health and Child Care is in the process of developing its successor

for the period 2021 -2025. The upcoming strategy, building on the

gains made already, seeks to address existing gaps, speak to

emerging challenges and most importantly seek to sustain the

1. INTRODUCTION

This Health Budget Brief explores the extent to which the approved 2020 budget allocation meets the health requirementsof Zimbabwe. It provides a summary of the size and composition of the health budget, primarily focussing on adequacy,allocative efficiency, effectiveness and equity of the current and past health spending. The Budget Brief also looks at thesources of health sector financing, mainly focussing on sustainability. This Budget Brief suggest some recommendations onways to improve health public spending, which is meant to inform future decision-making regarding budget formulation,execution, monitoring and evaluation. and budget formulation and implementation process.

ZIMBABWE HEALTH BUDGET BRIEF 3UNICEF | JUNE 2020

gains achieved thus far with respect to strengthening the health

system and delivery quality healthcare services.

Health outcomes are improving, and the country has managedto post positive results on most of healthcare indicators overthe past 5 years. However, there are some arears which are

lagging that require extra effort to yield positive results. Box 1

below gives a snapshot of the sector performance for selected

indicators. Overall, the percentage of children that received

vaccinations increased from 69.2 percent in 2014 to 76% in 2019.

Maternal mortality rate dropped significantly from 614 deaths per

100,000 live births in 2014 to 462 in 2019. All Early Childhood

mortality rate improved over the same period, except for neonatal,

which increased from 29 deaths per 1,000 live births to 32 in 2019

(Figure 1). The number of births attended by a skilled professional

also increased from 78% in 2014 to 86% in 2019 (MICS 2019).

BOX 1: Highlights of the overall health sector performance

Source:Various Budget Statements and Author Calculations

29

55

2521

75

29

50

21 20

69

32

47

1419

65

0

10

20

30

40

50

60

70

80

Neonatal Infant Post-Neonatal Child Under-fiveMICS 2014 DHS 2015 MICS 2019

Figure 1: Early Childhood Mortality Rates

93%

78% 77%

93%86% 86%

Antenatal carecoverage

Skilled attendant atdelivery

Institutionaldeliveries

MICS 2014 DHS 2015 MICS 2019

Figure 3: Reproductive Health

Under-fiveM

85

83

85

85

69

83

82

83

83

76

91

88

91

91

86

0 20 40 60 80 100

DPT

Measles

Hepatitis B

Hib

All Basic

MICS 2019 DHS 2015 MICS 2014

9

Figure 2: Vaccinations

9 19 28 34 44 47 54 57 60 62 63 6478 82 86 88 88 90 91 94 10091 81 72 66 56 53 46 43 40 38 37 3622 18 14 12 12 10 9 6 0

Soma

liaSo

uth Su

dan

Ethio

piaEr

itrea

Mad

agasc

arAn

gola

Moz

ambiq

ueUg

anda

Burun

diKe

nya

Zamb

iaTa

nzan

iaLe

sotho

Como

rosZi

mbab

weNa

mibia

Swaz

iland

Mala

wiRw

anda

South

Afri

caBo

tswan

a

Attended Not attended

Figure 4: Birth attended by skilled Health Personel in SeclectCountries (latest data %)

Despite the positive gains indicated above, the sector is facingsignificant challenges which are negatively impacting theachievements of the targets in the National Health Strategy.These challenges which range from inadequate funding, shortage

of foreign currency to import essential drugs and equipment,

power outages and intermittent fuel supply, which has

significantly impacted on the operations of health care centres,

depreciating local currency and increasing inflation, which has

eroded the health budget, among others. In the outlook, these

downside risks will continue to hamper performance of the sector

as the macroeconomic environment continue to be in distress.

Addressing these macro-challenges will be critical for enhancing

health results.

3. HEALTH SPENDING TRENDS

The health sector was allocated US$300 million in 2019representing a 13% increase from the 5-year average ofUS$264 million, recorded over the period 2015-2019.Compared to 2019 the health budget has increased by 139%.

However, the increase has only brought the health budget to the

pre-2019 levels, as the budget had dropped significantly in 2019

to US$126 million.

In nominal terms the health budget amounts to US$300 millioncompared to US$141 million in 2019. In real terms this is

equivalent to US$254 million in 2020 compared to US$131 million

in 2019. As shown in Figure 5, Government health spending has

been declining indicating the mounting fiscal pressures. However,

the rebound in 2020 is dependent upon the ZWL$ being able to

maintain its value. With the continued exchange rate depreciation

and inflation increasing, in real terms the 2020 budget could be

reduced. Since late 2018, the real health budget is being severely

eroded by the combined effect of exchange rate depreciation and

increasing inflation.

4 ZIMBABWE HEALTH BUDGET BRIEF UNICEF | JUNE 2020

321 286 291

141

300 329 298 300

131

254

050

100150200250300350

2016 2017 2018 2019 2020 Nominal expenditure Real expenditure

Perc

ent

Figure 5: Nominal and Real Expenditure Trends

3543 46

57

86

0

20

40

60

80

100

2010 2011 2012 2013 2014 2015 2016 2017

US$

Zambia Zimbabwe Uganda RwandaMozambique Malawi Kenya WHO Target

Source:WHO Global Health Expenditure database / Various Budget Statements

Figure 6: Per Capita Health Expenditure for selected countries

Key Takeaways

l The MoHCC is crafting the next National HealthStrategy. The strategy needs to focus on addressingexisting gaps, speak to emerging challenges and mostimportantly seek to sustain the gains achieved thus far,with respect to strengthening the health system anddelivery quality healthcare services.

l Health outcomes are improving. Overall, the percentageof children that received vaccinations increased from69.2 percent in 2014 to 76% in 2019. Maternalmortality rates have dropped significantly from 614deaths per 100,000 live births in 2014 to 462 in 2019.All Early Childhood mortality rates have improved exceptfor neonatal, which increased from 29 deaths per 1,000live births to 32 in 2019.

l Government needs to continue to strengthen the publichealth system by improving institutions (governance),enhancing human resource capacity (especiallycommunity-based health workers) and addressinginfrastructure deficits.

Zimbabwe’s per capita spending in health care is below theWHO recommended threshold of US$86 (Figure 6). However,Zimbabwe’s per capita allocation has improved significantly to

US$57.00 in 2017. This, therefore, suggest the need for the

Government to increase its level of funding to achieve better

health outcomes and make progress towards the SDGs.

4. COMPOSITION OF HEALTHSPENDING

Composition by Economic Classification

Total recurrent expenditures have been cut from 85% in 2019to 68% in 2020. There is significant re-orientation of the budgetmix in favour of investment projects. As a share of the total, in2020 the capital budget was allocated 32% (US$96.61 million)compared to 15% (US$22.7 million) in 2019 (Figure 8). This ismainly because of the significant cut of the wage bill from 34%in 2019 to 22% in 2020. Furthermore, the operational budget wasalso cut to 46% of the total budget compared to 51% in 2019.

ZIMBABWE HEALTH BUDGET BRIEF 5UNICEF | JUNE 2020

2 1 1 12

7 6 7 7

10

15

0

4

8

12

16

2016 2017 2018 2019 2020

Perc

ent

% of GDP % of Total Budget Abuja Declaration Target

Source:WHO Global Health Expenditure database / Various Budget Statements

Figure 7: Health sector spending trends against international targets

36

24

7

3

18

19

49

42

92

94

53

69

15

35

1

3

29

12

0 20 40 60 80 100

2019

2020

2019

2020

2019

2020

PHC

HC

Publ

icH

ealth

Polic

yan

dA

dmin

Employment Costs Other Non-Wage Recurrent Exp Capital

Source:WHO Global Health Expenditure database / Various Budget Statements

Figure 9: Composition of Programme budget by EconomicClassification

3422

51

46

1532

0

20

40

60

80

100

2019 2020

Perc

ent o

f Tot

al

Employment cost OperationalCost Investment

Source: 2019/2020 Budget Statement

Figure 8: Composition of Health Budget by EconomicClassification

Key Takeaways

l The health budget allocation increased from an averageof 7% in the past five years to 10% in 2020. Withoutcompromising fiscal sustainability, Zimbabwe shouldcontinue to gradually increase health spending to ensuresustainability of existing achievements.

l Health as a share of government spending has remainedbelow the Abuja Declaration commitment for domesticspending. Improving fiscal space through innovativedomestic financing is critical to boost health spending.Zimbabwe is a highly informalized economy and clearstrategies to harness resources from the sector will becritical in enhancing fiscal space to allow for moreresource allocations to all social sectors.

l Per capita spending on health care is below the WHO recommended threshold of US$86. However,Zimbabwe’s per capita allocation, which had improvedto US$57 in 2017, is projected to have slipped toUS$21 in 2020.

The Government budget allocation on health care accounts for10 percent of the national budget, an improvement from anaverage of 7% over the past years. As a share of the totalbudget the health budget is 10% compared to 7% in 2019 and

1.7% of GDP compared to 0.8% in 2019 (Figure 7).

The total Government health spending as a percentage of totalGovernment expenditure falls short of the recommended 15%Abuja Declaration Target. Although the health budget still fallsshort of the 15% Abuja Declaration Target, there is a remarkable

effort by Zimbabwe to meet its international commitment. As

shown in Figure 7, health sector spending as a share of the total

budget increased from 7% in 2019 to at 10% in 2020. For the

period 2016 – 2019, health spending has been averaging 7% as a

share of the total budget. Similarly, as a share of GDP, health care

spending has slightly increased from 1% in 2019 to 2% in 2020.

The improved budget allocation will go a long way to enhance

health outcomes, and the country is encouraged to continue

gradually increasing health spending budget to achieve

recommended international thresholds.

The expenditure mix rebalancing in favour of the developmentbudget is a welcome development. Though this massive fiscalconsolidation by government, which seeks to rebalanceexpenditure in favour of the development budget, is a welcomedevelopment. There is need to strike a balance betweenexpenditure reprioritization and maintaining a certain level thatguarantees a decent welfare of health sector personnel, to avoidservice delivery interruptions from industrial action as waswitnessed in the last quarter of 2019. At 22% of total, theemployment cost budget is now low and could threaten servicedelivery. Figure 9 shows this change, per programme, whichshows a rapid expansion of the capital budget for Primary Healthand Hospital care and Public Health Programmes.

Composition by Programme

Primary Health and Hospital Care (PHCHC) accounts for 90%(US$274 million) of the allocated US$300 million to totalhealth budget (Figure 10). This represents 101% increase fromthe 2019 budget of US$136 million. Compared to 2019, all

PHCHC subprograms budgets were increased, with the highest

upward review for programme management. Of this amount,

38% is earmarked for programme management. Compared to

2019, programme management budget has increased by 234%

(Figure 11). Central Hospitals were allocated US$60 million,

Provincial hospitals US$43 million, and district hospitals US$57

million. Rural health centres, which have traditionally relied on

donor financing, were allocated only 6% of the PHCHC budget

(US$16 million) which appear inadequate relative to the needs as

70% of the total population of Zimbabwe resides in rural areas.

6 ZIMBABWE HEALTH BUDGET BRIEF

Policy and Administration received 4% (US$11 million) of thetotal health budget. The Policy and Administrtaion budget is

earmarked for policy planning, formulation and direction. It also

covers issues to do with quality assuarance and coordination of

the Ministry’s service delivery at provincial level. As shown in

Figure 13, Finance and Administration accounts for the largest

share and was allocated US$4.2 million, which is 37% of the

Policy and Administration budget. Human resouces which is

meant for trainining, development and retention of staff received

US$2 million (18%). Similarly US$2 million was set aside for

provincial coordination and Administration. Unlike in the 2019

budget where no resources were set aside for internal audit, the

2020 budget allocated US$0.4 million for the provision of objective

assuarance and internal controls.

UNICEF | JUNE 2020

11 20

274

4%

7%

90% Policy and AdministrationPublic HealthPHCHC

Source: 2019/2020 Budget Statements

Figure 10: Composition of 2020 Health Budget by Programme (inUS$ millions and Percent of Total)

0.84

0.97

2.03

4.18

0.75

2.06 0.43

Policy Planning and Coordination Finance & Admin Provincial Admin

Minister and PS' Office HR M&E Internal Audit

Figure 13: Composition of Policy and Admin (US$ million)

29 12

38 18

38

98

16

57 43

60

0%

50%

100%

150%

200%

250%

- 20 40 60 80

100 120

ProgrammeManagement

Rural HealthCentre and

Community Care

District andGeneral Hospitals

ProvincialHospitals

Central Hospitals

US$

mill

ions

2019 2020 Percent Change (RHS)

Source: 2019/2020 Budget Statements

Figure 11: Primary Health Care and Hospital Care

1.0 1.2

2.3 1.9

0.1 0.1

6.0

4.5 4.5 3.5

1.4 0.5

0%200%400%600%800%1000%1200%

- 1.0 2.0 3.0 4.0 5.0 6.0 7.0

NCDs R & D CDs FamilyHealth

Prog. Mgt. Environ.Health

US

$ M

illi

ons

2019 2020 Percent Change (RHS)

Figure 12: Composition of Public Health Budget

Key Takeaways

l The expenditure mix has significantly improved. As ashare of the total budget, capital expenditure allocationwas doubled from 15% in 2019 to 32% in 2020.Compared to 2019, total recurrent costs have beenreduced from 85% to 68% of the budget, mainly onaccount of employment costs which were cut from34% in 2019 to 22% in 2020. Though this is awelcome development; the fiscal consolidation andexpenditure re-orientation process should be gradual, asthere is risk of disruption of service delivery asemployees will be disgruntled with the wage cuts.

l Rural Health Centres were only allocated US$16 million,which is 6% of the PHCHC budget or 5% of the totalhealth budget. There is need to boost governmentspending on rural health centres to avoid dependenceon donor financing. Over 70% of Zimbabwe’spopulation lives in the rural areas, and that is wherethere is greatest need.

Public Health was allocated US$20.4 million up from US$6million in 2019. The Public Health budget constitute 7% of thetotal planned Ministry of Health and Child Care spending. Allsubprogramme budget under Public Health were increased

compared to 2019. Non-Communicable Diseases (NCDs) received

the largest share of US$6 million (29%), Communicable Diseases

(CDs) and Research & Development (R&D) were allocated

US$4.5 million (21%) each. Family Health received US$3.5 million,

programme management US$1.4 million and Environmental

health US$0.5 million (Figure 12).

ZIMBABWE HEALTH BUDGET BRIEF 7UNICEF | JUNE 2020

Capital budget expenditure is very weak and should bestrengthened and be prioritised. In 2019, the investment budgetperformance worsened, underperforming by 86%. Out of theZWL$192 million (US$22.7 million) allocated to the capital budget,only ZWL$26 million (US$3.1) was utilized. This is despite massiveinfrastructure gap and inadequate medical equipment, which isnegatively impacting on health outcomes. Over-expenditure onemployment costs declined significantly from 108% in 2018 to27% in 2019 in line with the government thrust to contain thewage bill. Execution of other non-wage recurrent costs (operationsbudget) improved significantly and is almost in line with theapproved budget at -3% deviation in 2019.

Execution of the Primary Health Care and Hospital Care (PHCHC)programme has significantly improved, underperforming by only4% in 2019 compared to budget overrun of 25% in 2018 (Figure 15). Similarly, implementation of the Policy andAdministration programme has also improved. Of concern is thePublic Health programme which is perennially underperforming.

Key Takeaways

l Budget execution is weak as evidenced by the hugedeviations of actual expenditure from the approvedbudget. Overall, the 2019 health budget under-performed by 6% compared to over expenditure of 15%in 2018.

l Capital budget expenditure is very weak. In 2019, the performance worsened, underperforming by 86%.Similarly, the Public Health programme is perenniallyunderperforming by huge margins, by 44% in 2019.

5. BUDGET CREDIBILITY ANDEXECUTION

Budget execution is weak as evidenced by the huge deviationsof actual expenditure from the approved budget. Weak budgetimplementation is the major obstacle towards achieving betterhealth outcomes. Overall, the 2019, budget underperformed by6% compared to over expenditure of 15% in 2018. (Figure 14). In2018, huge budget overrun was mainly on account employmentcosts that more than doubled compared to the approved budget.

108%

-62%-50%

15%27%

-3%

-86%

-6%

Employment Costs Operations Investment Total Budget

2018 2019

Source:Various Budget Statements and Author calculations

Figure 14: Budget execution by economic classification, 2018 -19

44%

25%

-4%

-38% -37%-44%

-17%

1%

-2%

35%

20%

-6%

910281027102Primary Health Care and Hospital Care Public Health Policy and Administration Total

Figure 15: Budget Execution by Programme

The Public Health Programme supports communicable and non-communicable diseases, family and environmental health andresearch and development, all critical pillars of the health caresystem. Some of the challenges undermining budget executioninclude weak fiscal space, delays in disbursement of funds byTreasury and weak procurement capacity, among otherconstraints. As such, UNICEF needs to continue working withTreasury and line Ministries to strengthen budget executioncapacity, particularly for capital projects.

6. FINANCING OF HEALTH SECTOR

Health sector financing has dropped significantly from anaverage of US$745 million over the period 2016 – 2018, tobelow US$500 million in 2019 (Figure 16). The decline can beattributed to impact of both increasing inflation and depreciating

local currency, which has significantly eroded domestic financing.

In 2019, financing from the Consolidated Revenue Fund

amounted to US$141 million (ZWL$1.2 billion). This represented

19% of the total health financing. With the local currency

depreciating significantly, the budget contributed 26% (US$140.6

million) of the total health sector financing, compared to US$385

million (72%) by development partners. The 2020 budget has set

aside ZWL$6.45 billion (US$300.4 million), which is equivalent to

64% of the total health sector financing. Retained revenues (fees

and levies) will contribute 1%, with the rest comprising of support

from partners and local authorities.

sources for domestic resources be strengthened, focusing on

non-traditional sources including the private sector. Considering

the COVID-19 pandemic, external financing is likely to be reduced

as all traditional external financiers are grappling with measures

to contain the outbreak, which has overstretched resources

globally. Innovative financing is needed to quicken the pace of

health care progress and achieve equity.

The 2020 budget also set aside ZWL$282 million (US$13 million)

for transfers to subnational governments, targeting interventions

in the health sector. This is equivalent to 3% of the total health

sector financing, with special focus on infrastructure. This

resource if properly utilized will boost the health system at local

levels. This policy measure provides an opportunity to address

existing inequalities and enhance equity between rural and urban

learners.

8 ZIMBABWE HEALTH BUDGET BRIEF UNICEF | JUNE 2020

Key Takeaways

l Health sector financing has dropped significantly froman average of US$745 million over the period 2016 –2018, to below US$500 million in 2020. Innovativefinancing is needed to quicken the pace of health careprogress and achieve equity.

External financing contributes an unsustainably huge proportionof the health sector financing. Development Partners areexpected to contribute US$150 million in 2020, compared toUS$385 million (72%) in 2019. Figure 17 shows trends in themain sources of health financing. This situation demands that

321 282 291 141

300

23 28 23

7

5

345 429 427

385 150

3716 15

3 13

-

200

400

600

800

2016 2017 2018 2019 2020Budget Revenue Retained Revenue Development Partners Local Authorities

Source:Various Budget Statements, MoHCC and CHAI 2019 Report

Figure 16: Trends in the Main Sources of Health Sector Finance(US$ Millions)

44 37 39 26

64

3 4 3

1

1 48 57 57

72

32

5 2 2 1 3

Perc

ent

2016 2017 2018 2019 2020

Budget Revenue Retained Revenue Development Partners Local Authorities

Source:Various Budget Statements, MoHCC and CHAI 2019 Report

Figure 17: Trends in the Main Sources of Health Sector Financing(%), 2016 -20

UNICEF 2020 Budget Brief

June 2020

2018 National Budget Brief

ZIMBABWE

An Overview Analysis

For further information, please contact:Tawanda ChinembiriChief of Social Policy & ResearchUNICEF ZimbabweEmail: tchinembiri@unicef.orgPhone: +263 8677 020888