Government Budget Allocation for Primary Health Care in Ethiopia

Background Ethiopia has pursued Health Care Financing (HCF) reforms for over two decades as part of its commitment to achieving Universal Health Coverage (UHC). With a health policy anchored in Primary Health Care (PHC) and a decentralized planning framework, the country has introduced numerous interventions to strengthen domestic resource mobilization, enhance autonomy at service delivery points, and build local capacity. Methods This study analyzes PHC budget allocation and expenditure trends in 15 woredas across five regions from 2010 to 2016, using mixed methods. Results Financing of the HSS-PHC system yielded a performance score of 29%, indicating significant challenges in resource allocation and financial management. Two key indicators determined this: Funding and allocation of resources (14%) and purchasing and payment systems (39%). While nominal health budget allocations have increased over time, real-term values adjusted for the non-food consumer price index have declined. The average PHC spending represented 17.3% of general government expenditure—exceeding the Abuja Declaration target—yet regional disparities were notable, ranging from 9% to 26.4%. Persistent challenges, especially in CBHI implementation, exempted service reimbursement, and provider-level autonomy, were particularly pronounced in pastoralist regions. Conclusions Inadequate budget allocation from the treasury, the expanding need of communities, shocks from different emergencies, and high inflation rates in recent years have led to widening gaps in health financing. Alternative financing mechanisms (CBHI) didn’t catch up with the widening gap because of inadequate implementation, low potential as a financing strategy due to low premium rates, and lack of mechanisms to enforce reimbursement of health facilities. These findings underscore the need to reinforce public financial management and leadership capacity at district and facility levels to ensure more equitable, efficient, and transparent PHC financing.