Resource Allocation and Utilization in the Health and Education Sectors: Challenges and Opportunities in Ghana

Sub-Saharan Africa is undergoing a period of significant transformation, with rapid population growth and urbanization, as well as a growing middle class and youth cohort. To realize the potential inherent in these changes, it is essential to ensure access to quality public services with sound governance as a prerequisite for economic growth and stability. In many low- and middle-income countries, the key social sectors – health and education – rely heavily on external funding for important components of sector expenditure, which is neither sustainable nor always sufficient to cover the increasing demand for services. As countries seek to reduce their dependence on donor assistance, it is important to recognize that the economic and political landscape both influences and is affected by decisions concerning the mobilization, allocation and use of resources.

In 2017, the Ghana Center for Democratic Development (CDD-Ghana) and the Health Finance and Governance (HFG) project completed a study that applied a political economy approach to examine the complex landscape of institutions, political pressures, incentives, obstacles, and costs that Ghana,  a country that has recently moved from low- to middle-income status, faces as it transitions towards financing the health and education sectors on its own. Political economy looks not only at the forces and incentives that oppose change, but also those that can be leveraged to drive positive change. This analysis, which draws upon semi-structured interviews, a literature review, and governance research, is particularly timely in the context of health, as Ghana faces increased pressure to improve the financial sustainability of the National Health Insurance Scheme (NHIS), which is open to all Ghanaians. This brief summarizes the results of the analysis, highlighting key constraints and opportunities for mobilizing domestic resources for health and education, and concludes with recommendations that take into account the observed political economy dynamics.

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