Ghana’s National Health Insurance Scheme (NHIS) is grappling with severe financial shortfalls that are hindering progress in healthcare and weakening the protection of vulnerable groups.
- Ghana’s National Health Insurance Scheme is facing severe financial shortfalls
- The introduction of a capping law in 2017 limits the funds allocated to NHIS from the National Health Insurance Levy
- NHIS also experiences a significant gap between its budgeted allocations and the actual cash disbursements received
Ghana’s public funding has been instrumental in enhancing health and nutrition outcomes, but ongoing challenges pose a threat to these achievements, according to the World Bank’s latest Public Finance Review report.
A key issue is that the NHIS is no longer receiving its full allocation from the National Health Insurance Levy (NHIL), following the introduction of a capping law in 2017.
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This law limits the amount of statutory funds allocated to the NHIS as a percentage of total government revenue, diverting funds to other government priorities.
Furthermore, the NHIS is experiencing a significant gap between its budgeted allocations and the actual cash disbursements received from the Ministry of Finance, further constraining its operations.
Inefficiencies in Spending Worsen the Crisis
The report also highlights inefficiencies in NHIS spending, with high administrative costs consuming a substantial portion of its budget.
Currently, less than 60% of the NHIS budget is allocated to paying claims, reducing the funds available for actual healthcare services.
Regarding social assistance programmes, the World Bank acknowledges that Ghana’s key initiatives—such as the Livelihood Empowerment Against Poverty (LEAP), Labour-Intensive Public Works (LIPW), and the Ghana School Feeding Programme (GSFP)—are well-targeted at low-income households. However, the effectiveness of these programmes remains limited due to insufficient benefit levels.
Energy Subsidies Overshadow Social Protection Spending
Collectively, these social assistance programmes account for only 0.2% of Ghana’s GDP, with a target of 0.3% by 2025, and just 1.0% of total government spending.
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This is significantly lower than the average 1.5% of GDP allocated by comparable countries. By contrast, energy subsidies in Ghana amounted to approximately 2% of GDP (equivalent to US$1.5 billion) in 2023.
The World Bank emphasize that external funding remains crucial for sustaining these social assistance programmes, as domestic resources alone are inadequate to meet growing needs.
As Ghana continues its efforts to strengthen its healthcare and social protection systems, addressing these financial shortfalls will be essential to maintaining progress and ensuring the most vulnerable populations receive the necessary support.
