World Bank flags serious flaws in Pakistan’s health budgeting system

ISLAMABAD: The World Bank has flagged serious inefficiencies in Pakistan’s health budgeting system, pointing to poor-quality cost estimates, unpredictable fund releases, and excessive centralization that undermine service delivery across the country.

In a report titled “Budget execution in health: from bottlenecks to solutions,” The Bank noted that Pakistan continues to rely on historical allocations rather than proper costing estimates while preparing annual health budgets. This practice, it said, has repeatedly led to overruns or underruns in expenditure.

Budgeting processes in Pakistan were described as highly centralized, with limited input from lower-tier health facilities. According to the report, this often results in unrealistic cost projections and a mismatch between allocations and actual service delivery needs. Fiscal constraints and mid-year cuts further aggravate the problem.

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The study also underscored chronic weaknesses in fund release mechanisms. Health facilities in Pakistan reported that unpredictable and delayed disbursements compromised their ability to meet operational costs, including payment of utility bills. “Weak cashflow management, combined with poor revenue forecasts, contributed to frequent under-execution of the budget,” the Bank observed.

Even routine payments were found to be bogged down in red tape. A bill of as little as Rs200, the report noted, was subjected to the same multi-layered approval process as one exceeding Rs1 million — a system that creates unnecessary delays and duplicates internal controls.

While acknowledging that Pakistan has introduced a “Green Corridor” mechanism to expedite low-value transactions, the Bank stressed that broader reforms were needed to improve efficiency. It also pointed to the lack of autonomy for health facilities in managing their finances, a challenge common across case-study countries but particularly acute in Pakistan.

Automated reporting systems exist in Pakistan, but poor connectivity has led to delays in financial reporting from decentralized facilities, reducing the government’s ability to monitor execution in real time.

Copyright Business Recorder, 2025