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Last Updated 8th February 2023.
This page will be updated with new forecasts for 2023 soon.
In the meantime, read on below for the last forecast for 2022.
How much funding is the Health Sector forecast to receive in 2022?
Funding to the Health sector is forecast to be between $2bn and $2.6bn in 2022. Our central estimate is $2.2bn. For reference, $1.2bn was received in 2021.
This forecast is based on our 95% probability range. In other words, we are 95% sure that funding will be between $2bn and $2.6bn. 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 $2.1bn and $2.4bn.
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. Given that we don’t have the information yet we have projected the funding required for 2022 and compared that to the funding forecast. 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, and we think that there’s a realistic possibility that Health will reach the next milestone of 50%. However, the 75% mark looks out of reach for the sector.
How does the 2022 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 2022 ($4.6bn) actually 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 $493m in one year. Funding dipped again in 2021 to $1.2bn, in line with the medium-term trend before the pandemic.
The funding gap increased in 2018, 2019, 2020, and 2021. The funding gap now stands at 70%. So the sector is already in a real humanitarian recession. 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 2021?
We think that it’s almost certain that Health will close its funding gap this year, and therefore come out of the humanitarian recession that it is currently in.
How does the 2022 forecast compare to other sectors?
Health is forecast to rank 3nd of all sectors in 2021, behind Food Security. This puts the sector in a similar range to ‘Multi-Sector’ and Nutrition, but miles behind Food Security. Nevertheless, it places Health firmly in the top-tier of humanitarian sectors for funding received.
The current state of things
Funding to the sector by the end of December 2022 has far outperformed funding at the same point last year ($1.8bn this year vs. $1.2bn last year). This is slightly unexpected – especially as there is a huge jump in funding in May 2022. Could this be a front-loading of funding by donors given the crisis in Ukraine? Or does this reflect a higher equilibrium of funding for the sector?
The Health sector had received $1215m of funding by the end of 2021, which is unsurprisingly below 2020 levels, but ahead of 2018 and 2019 levels. This looks like the Health Sector reverting to the medium-term growth rate, instead of 2020 setting a new trend in the sector.
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.
Features of the Health Sector in 2021
Note: the above graph does not include ‘COVID Response Plans’ – see here the plethora of ‘Other’ COVID plans.
The average Health response was funded at only 37% of what was required in 2021. 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 24%). The biggest successes for the Health sector were Mozambique (122% funded), Afghanistan Flash Appeal and HRP (155% and 78% respectively), Niger (93%), Cameroon (89%), Myanmar (74%), Mali (72%), and the occupied Palestinian territories Flash Appeal and HRP (67% and 64% respectively). However, just under half of all contexts received less than 25% of their funding requirement.
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?
The Health sector is one of the most diverse humanitarian sector in terms of funding sources. 114 different donors contributed to the Health response in 2021. No donor contributed more than 14% of the overall funding for the Health sector and most donors (108) contributed 5% or less. The leading donors for the Health sector in 2021 were the the German Government (14%), US Government (13%), ECHO (12%), and the Central Emergency Response Fund (11%).
We can measure the diversity of a sector using the Herfindahl Hirschman Index. On a scale of 0 to 10,000, a sector is unconcentrated and competitive with a score under 1,500. The Health sector had a HHI score of 729 in 2021. This diversity of funding means that the Health sector was uniquely positioned in 2020 with the shock of COVID-19. Our hypothesis is that the greater number of donors to a sector, the better the sector can weather shocks. In other words, resilience.
On the one hand, we can definitely argue that the sector might have been expected to experience a ‘positive shock’. Funding may have been expected to increase disproportionally for Health, due to COVID-19 being a Health ‘event’ as opposed to any other sector. On the other hand, it may also have been expected that donor reallocations would not only take place within their humanitarian budgets (e.g. taking from Food Security to give to Health), but also within their total budgets (e.g. taking from humanitarian to non-humanitarian budgets). Whilst the first factor (positive effect) undoubtedly benefitted the amount of funding going to the Health sector, the second factor (negative effect) may have been mitigated by the plurality of donors in the sector.
When it comes to who receives Health funding, the WHO dominates the scene, receiving a third of all Health funding, followed by UNICEF and UNFPA. Together, these three UN agencies receive over 60% of all Health funding. However, at least another 149 organisations received Health funding in 2021, and another 50 organisations received over $1m. Whilst this includes many international organisations, it also includes many local and national NGOs as well.
2021 Forecast
Last year’s forecast can’t yet be judged against what the reality was as the 2021 numbers aren’t ‘final’ yet, despite it being 2022 already. It varies year-to-year, but there is still a non-trivial amount of funding that is logged after the end of the year. Therefore, we can’t really judge last year’s forecast until some point later in 2022. It’s at this point that we’ll do a post-mortem on our 2021 forecasts and see how well we did.
Methodology
The usual health warning: FTS doesn’t capture everything. It is a platform that relies on voluntary reporting by organisations. But it is the most comprehensive source of data for humanitarian funding.
For forecast methodology, click here. We’ll be keeping a record of all our forecasts and success over time, which you can find here.
To find out methodology and sources for other things on this page which aren’t the forecast, click here.
Note: Numbers in ‘The current state of things’ graph may differ from elsewhere on the page as the data was extracted on a different date (13th January 2022) than other numbers that also show how much was received in 2022 (e.g. the column chart).
