In the Health Sector, UgIFT will support improvements in the equity and adequacy of local health financing, informed by sector costing.

The upgrading of facilities to the Health Centre III level will also continue.

In parallel, a formula and performance-based share of the development grant will be linked to the rehabilitation, expansion, and equipping of existing health facilities; HCIIIs qualifying for Results-Based Financing (RBF) will be initially prioritized. Allocations for essential medicines will be increased and the mechanisms for allocating those supplies and the transparency of allocations will be enhanced.

At the central government level, coordination and central oversight by MoH will be improved, including the mainstreaming of the oversight of RBF. In addition, UgIFT will support the development of an integrated approach to digitalization of health service delivery and management of health services.

At the district/municipal level, the oversight and monitoring functions of District Health Management Teams (DHMTs) will be boosted, including their role in the verification of facility level results under RBF.

At the health facility level, performance will be improved through the mainstreaming of RBF for HCIIIs and HCIVs nationally from FY2021/22 onwards using the increased non-wage recurrent grant allocations.

Incentive payments under RBF will promote balanced packages of services in facilities, incentivize preventative as well as curative interventions, and improve the quality as well as quantity of services.