Health

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Last Updated 6th January 2024.

How much funding is the Health Sector forecast to receive in 2023?

Funding to the Health sector is forecast to be between $2.2bn and $2.8bn in 2023. Our central estimate is $2.5bn. For reference, $2.2bn was received in 2022.

This forecast is based on our 95% probability range. In other words, we are 95% sure that funding will be between $2.2bn and $2.8bn. Below are the other forecast ranges for the Health sector. As we become less sure about our forecast, the range narrows. So for example, we think there’s a 50% probability that funding will be between $2.3bn and $2.6bn.

But we need to put this into context. What does the forecast mean in terms of reaching the funding that is required for the sector (also known as the funding requirement)? The total funding requirement globally is determined by how much is needed in each context. If you hover over the donut below you’ll be able to see the chances of reaching 25%, 50%, 75%, and 100% of the funding that is required.

We think that it is almost certain that Health will reach 25% of the requirement in 2022, although we think it’s highly unlikely that the Health sector will reach the next milestone of 50%.

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How does the 2023 forecast compare to previous years?

Health is the second largest humanitarian sector in terms of the funding that is needed, and the third largest sector in terms of funding received (behind only Food Security and Nutrition – excluding “Multi-Sector”). The big story of the last five years is that there has been a gradual trend in the funding that was needed, followed by an extraordinary increase in the year of the start of COVID, 2020. The funding needed for Health nearly doubled from $2.3bn in 2019, to $4.4bn in 2020. That’s an increase of 85% in a single year, undoubtedly driven by the largest global health crisis of recent years.

The funding requirement in 2023 ($5.4bn) surpasses the ‘COVID year’ level of 2020 ($4.4bn). COVID-19 appears to have set or accelerated the sector towards a new equilibrium in terms for funding required for the sector.

There is a similar story in terms of the funding received into the Health sector. There was a gradual increase in funding received between 2016 and 2019. Funding increased at a rate of 5% year-on-year across the period (compound annual growth rate, or CAGR), rising from $796m to $921m.

And then, COVID shook things up. In just one year, funding to the sector increased to $1.4bn in 2020. A large increase in funding is not unheard of across sectors, particularly amongst smaller sectors where a large percentage increase translates into a few million dollars. However, what is very rare is an increase of nearly $500m in one year. Funding dipped again in 2021 to $1.2bn, in line with the medium-term trend before the pandemic, before climbing again in 2022 to over $2.2bn.

We think that the Health Sector could reach these heights again in 2023, with our central forecast of $2.5bn.

Whilst the funding gap increased in 2018, 2019, 2020, and 2021, the funding gap actually decreased in 2022. The funding gap now stands at 51%. So the sector climbed out of a real humanitarian recession last year. We’ve come up with a way of defining what a ‘real humanitarian recession’ is, and we’ve defined it in this story as two consecutive years of a growing funding gap. So what is expected to happen in 2023?

We think that there’s a it’s highly unlikely that the sector will close its funding gap this year, but actually highly likely to experience real negative growth this year – i.e. the funding gap widening.

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How does the 2023 forecast compare to other sectors?

Health is forecast to rank 2nd of all sectors in 2021, behind Food Security. This puts the sector in a similar range to ‘Multi-Sector’, but miles behind Food Security. Nevertheless, it places Health firmly in the top-tier of humanitarian sectors for funding received.

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The current state of things

Funding to the sector by the end of December 2023 has outperformed funding at the same point last year ($1.9bn this year vs. $1.6bn last year). This continues the trend of a new $1bn+ equilibrium of the sector. What we don’t know yet is whether the sector will reach the heady heights of 2022.

If we look at how funding was received into the sector throughout previous years, 2020 is very striking. Starting in July 2020, funding to the Health sector accelerated and grew throughout the year at levels that the sector had not seen previously. The sector reached just under $1bn by the end of October – more than double the amount if had received at that same point in 2018. We have usually been quite tentative about the causes of things until we test a hypothesis with data. However, we believe, given the dominance of COVID-19 on… well everything… that we can say with some certainty that the increase in funding in 2020 was due to the Health needs associated with the pandemic.

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Features of the Health Sector in 2022

The average Health response was funded at 45 % of what was required in 2022. Whilst this doesn’t seem like a lot, it is actually the 4th highest figure of all sectors (the average sector had an equivalent percentage of 25%).

Seven plans surpassed their funding requirement: Burundi (159%), Malawi Flash Appeal (156%), Mozambique (151%), Nigeria (142%), Mozambique Flash Appeal (135%), Iraq (133%), and Libya (126%). And yet at the same time, there are 11 plans that received less than 25%.

In the coming year, we will construct an Inequity Index to compare this to other sectors and see just how unequal funding is across contexts. We’ll also try to explain why this may be the case. Is it due to underreporting from certain contexts, donor preferences, size of the funding requirement, how new the crisis is, or something else?

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