AU-STC: Bridging Africa’s health financing gap in a changing geo-economic context

Deputy Executive Secretary of the United Nations Economic Commission for Africa and Chief Economist

Dr Hanan Morsy

Opening remarks for the Experts Segment of the 8th Session of the AU Specialized Technical Committee on Finance, Monetary Affairs, Economic Planning, and Integration on the theme: Bridging Africa's Health Financing Gap in a Changing Geo-Economic Context.

29^th September 2025

Johannesburg

South Africa

Outgoing Chair of the Experts Bureau of the STC, El Moustapha Sidi Mohammed, Advisor to the Minister of Economy, Mauritania

Your Excellency Amma Twum-Amoah, Commissioner for the African Union Department of Health, Humanitarian Affairs and Social Development of the African Union Commission

Your Excellency Francisca Tatchouop Belobe, Commissioner for Economic Development, Trade, Tourism, Industry and Minerals of the African Union Commission

H.E Dr. Jean Kaseya Director General of the Africa Centres for Disease Control and Prevention

Dr. Duncan Pieterse, Director-General of Treasury, South Africa

Mr Yusuf Daya, Director, AU/AfCFTA Relations and Trade Policy, Afreximbank

Distinguished Delegates and Partners,

Ladies and Gentlemen

Good morning.

It is my distinct honor to be here and deliver on behalf of the United Nations Economic Commission for Africa opening remarks at the expert segment of the 8^th Session of the African Union Specialized Technical Committee on Finance, Monetary Affairs, Economic Planning and Integration.

First, I want to extend my sincere appreciation to the African Union Commission for the kind invitation, and to the people and government of South Africa for their warm hospitality.

Excellencies, distinguished ladies and gentlemen

Since the 7^th Session of this STC in Tunis in July last year, we have continued to witness some major external shocks affecting our continent:

First, sharp cuts in Official Development Assistance have had a tremendous impact, particularly on the health sector. Between 2021 and 2025, ODA for Africa's health declined by almost 70%[1]. Concurrently, debt service is projected to absorb nearly 30% of government revenues in 2025, crowding out essential health expenditures.

Second, rising tariffs and trade disruptions since April this year have created deep uncertainties and constraining development opportunities. These shocks not only threaten economic growth but also undermine health financing and climate resilience, as governments lose the fiscal space to invest in essential services. The impacts will be further deliberated at this STC session.

Third, with the rising geopolitical tensions, we are witnessing a shift in focus from development to security. The retrenchment of multilateralism has hampered efforts to reform the global financial architecture, strengthen the rules-based global trading system, combat climate change, and ensure inclusive governance framework on AI and digital space.

Excellencies, distinguished ladies and gentlemen,

All these external shocks exacerbate existing vulnerabilities in our health financing architecture. In 24 countries, out-of-pocket spending is the primary source of health expenditure, while in 17 countries, donor funding covers over 30% of health expenditure. This heavy dependence on external resources leaves our systems exposed to turbulence.

These challenges demand that we redouble our efforts with a profound sense of urgency to reform our health financing architecture, with a sense of urgency, towards sustainability, equity, and efficiency.

At this juncture, let me offer three policy priorities.

First, we must anchor our health financing agenda within the larger framework for a reformed Global Financial Architecture.

The technical work of the High-Level Working Group, which ECA supports, is central to building a coherent framework for action. The forthcoming G20 engagements are a pivotal moment to translate this work into concrete commitments.

Our collective message must be unequivocal. We advocate for a dual-track approach: one, optimizing the allocation of Special Drawing Rights by channeling them through the African Development Bank to capitalize on its leveraging capacity for health security. Two, we must operationalize the IMF's Resilience and Sustainability Trust as a central financing pillar for pandemic preparedness.

Second, we must look inward to strengthening our domestic foundations.

We must strengthen our domestic resource mobilization, improve the efficiency of public spending, and better integrate health into our national budgets. This requires a progressive system that does not burden the most vulnerable citizens. In addition, progressive taxation and the use of digital tools should drive effectiveness, transparency, and accountability in public financial management.

We must also harness private sector's capital, innovation, and efficiency and encouraging Public-Private Partnerships is critical for building scalable, shock-responsive health systems foundational to human capital development.

And we must tackle illicit financial flows estimated at US$89 billion annually. Africa must take ownership of its resources by addressing mis-invoicing, tax evasion, and offshore wealth. These efforts can unlock significant fiscal revenues and boost domestic resource mobilization.

Third, we must leverage regional integration and the AfCFTA.

We must advance pooled procurement and local production of medicines to consolidate Africa's purchasing power, lower costs, and develop a sustainable market for vaccine and health products manufacturing. With a unified market of 1.4 billion people, we can reduce our 99% dependency on imported vaccines and 95% dependency on imported health products, thereby enhancing our health security and sovereignty.

Excellencies, distinguished ladies and gentlemen,

Investing in health yields a significant return-up to four dollars for every one^[2] dollar spent-making it one of the smartest economic strategies available. Closing Africa's health financing gap is essential for boosting productivity and resilience. With our population projected to reach 2.5 billion by 2050, over 60% of whom are under the age of 25, we must reposition health at the center of our policy and financing strategies. This requires close coordination and joint leadership from Finance and Health Ministers.

This STC session can be a turning point for Africa's health financing landscape. The UN Economic Commission for Africa stands ready to support our member States, the African Union, and partner institutions across the continent in this critical journey.

I wish you fruitful deliberations. Thank you.