Fill in the gap
Ghana's President directs Finance Minister to address $156m health sector funding shortfall.
Ghana’s President John Mahama has directed Finance Minister Dr Cassiel Ato Forson to urgently address the funding gaps in the country’s health sector. This move comes after the suspension of USAID assistance, which has left Ghana facing a $156 million funding shortfall. Mr Mahama emphasised the need for alternative funding sources to mitigate the adverse effects on critical health interventions, including maternal health, HIV/AIDS, family planning, and childbirth. The USAID suspension, announced by US President Donald Trump in January, has impacted several African nations, including Ghana, where it’s affecting the distribution of essential health commodities in the northern regions.
When donors cough, Ghana's health sector will definitely catch a cold. The country's health budget is the largest after education, requiring roughly $1.5 billion to run the sector. However, donor support accounts for nearly 20% of the national health budget, specifically covering key areas such as capital expenditure and goods and services.
In contrast, the Government of Ghana primarily contributes to employee compensation. The sector's wage bill is so substantial that it consumes more than 56% of its annual budgetary allocation, leaving limited room for other priority areas like capital expenditure and the procurement of essential medical supplies. USAID has been a key pillar of Ghana's health sector, with more than half of the projected 2025 benefits directed toward healthcare. Given its ongoing fiscal challenges, withdrawing this support could create a significant funding gap Ghana would struggle to fill.
The country is already grappling with a substantial budget deficit, has no access to the international capital market, and faces a constrained domestic bond market following its 2022 default. The West African nation is currently relying on a $3 billion IMF balance of payments support programme. As the Fund’s team arrives for the fourth review of Ghana's performance under the program, discussions will undoubtedly focus on the implications of the USAID funding pause for the health sector.