Can national health compacts reduce aid dependency? Comparative insights from Uganda, Ethiopia, and Rwanda
TL;DR
The findings indicate that health compacts primarily influence the governance of financing rather than the sources of financing, which are determined largely by domestic revenue mobilization and fiscal capacity.
Abstract
Introduction: national health compacts have emerged as important instruments for strengthening country ownership, improving development partner alignment, and enhancing accountability in support of Universal Health Coverage (UHC). At the same time, reductions in Official Development Assistance (ODA) have renewed concerns about the sustainability of health financing across Africa. While health compacts are expected to improve aid effectiveness, their potential contribution to reducing aid dependency remains uncertain. To examine whether national health compacts can contribute to reducing aid dependency by comparing governance arrangements, health financing patterns, and coordination mechanisms in Uganda, Ethiopia, and Rwanda. Methods: a comparative policy analysis was undertaken using national health sector policy documents, international aid effectiveness frameworks, and health financing indicators from the World Health Organization Global Health Expenditure Database. The analysis was guided by the health financing functions framework, which distinguishes governance, revenue mobilization, pooling, and purchasing functions within health systems. Results: national health compacts are intended to strengthen government stewardship, partner coordination, policy alignment, and mutual accountability. Despite differences in the maturity of their coordination arrangements, Uganda, Ethiopia, and Rwanda continue to rely substantially on external resources to finance their health systems. Rwanda's experience demonstrates that strong country-led coordination can coexist with high levels of aid dependence. The findings indicate that health compacts primarily influence the governance of financing rather than the sources of financing, which are determined largely by domestic revenue mobilization and fiscal capacity. While health compacts can improve aid effectiveness, their contribution to financing sustainability depends on complementary reforms that strengthen domestic resource mobilization, public financial management, fiscal space for health, and sustainable financing of the health workforce. Conclusion: national health compacts can improve aid effectiveness, country ownership, and coordination of external assistance, but they do not by themselves reduce aid dependency. Sustainable progress towards financing sovereignty requires complementary reforms in domestic resource mobilization, fiscal space for health, public financial management, and health workforce financing.