BMI View: Recently Civil society organisations in Uganda have urged the country's legislators to reject the proposed budget reductions by 4% for the health sector for FY15/16. The reduction would severely affect the efforts to stop maternal, new born and child mortality and also access to indispensable health services, the CSOs noted. On a more positive note, the country's economic prospects improved lately as well with the GDP forecasts being revised upwards. This allows us to expect that Uganda's government will maintain its focus on improving healthcare provision.
Headline Expenditure Projections
Pharmaceuticals: UGX1,146.0bn (USD433mn) in 2014 to UGX1,256.7bn (USD427mn) in 2015; +9.7% growth in local currency terms and -1.3% in US dollar terms.
Healthcare: UGX2,856.7bn (USD1.1bn) in 2014 to UGX3,153.7bn(USD1.1bn) in 2015; +10.4% growth in local currency terms and -0.6% in US dollar terms.
Uganda is ranked 25th in the MEA region, with a score of 30.7 out of a total of 100, above several countries including Nigeria and Sudan. This is a slight improvement since the last quarter when the country was ranked 26th. While factors such as population growth and increasing healthcare needs will create a growing demand for pharmaceuticals, we note that a sizeable counterfeiting industry, poor healthcare funding, corruption, regulatory environment deficiencies and a number of other issues will combine to keep Uganda in a similarly low position in the MEA matrix over the coming months.
Key Trends And Developments
The Ugandan government will begin construction on maternity wards and theatre blocks in 26 health centres IV (HCIVs) across the country from May 2015. The USD13mn effort, which is funded by a World Bank loan, is part of the government's Uganda Health Systems Strengthening Project (UHSSP) which aims to improve health services in the country.
Pharmacies, hospitals and drug dispensaries in Uganda are facing an acute shortage of pharmacists. There are currently only 600 qualified pharmacists in the country. One pharmacist serves an average of 100,000 people - far below the World Health Organization (WHO)'s recommendation of one for every 2,000, according to the Pharmaceutical Society of Uganda. Uganda would need to immediately recruit more than 4,500 pharmacists to address the shortfall.
Novo Nordisk has entered into a three-year extension of its Changing Diabetes in Children programme. Since 2009, free insulin and access to diabetes care have been provided to more than 13,000 children in nine countries in Africa and South-East Asia. During this time, 108 diabetes clinics have been established and 5,479 healthcare professionals have received diabetes care training.
BMI Economic View:
Economic growth in Uganda is gathering momentum and we expect real GDP growth to accelerate from an estimated 5.5% in 2014 to 6.0% in 2015 and 6.0% in 2016. The Bank of Uganda's recent observation that economic output 'is now estimated to be slightly above its potential level' indicates that the economy has finally thrown off the shackles after a period of below-par growth. We expect growth to be primarily driven by capital investment, as the government forges ahead with an ambitious infrastructure development agenda, and a buoyant consumer sector.
BMI Political View:
Election-related spending pressures will put Uganda's already-stretched public finances under added pressure over the coming quarters. Moreover, with President Museveni declining political capital meaning he has to rely ever more heavily on political patronage to retain control, fiscal indiscipline is likely to remain a salient risk well beyond next year's polls.