Impact of government deficit financing on the performance of Ministries Agencies and Departments case study of Ministry of Health

Abstract

The study is an investigation of the impact of government deficit financing on the performance of the health sector with the following objectives; to establish the performance of the Health sector from 2007 to 2017, to investigate the relationship between deficit financing and the performance of the Health sector, to determine the fund absorption capacity of the Ministry of Health and to determine the trend of the infant mortality in Uganda. This study made use of the Ex-post facto research design. Onwumere (2009) states that expost facto design is the type of research involving events that have already taken place. The finding indicated that there is a significant impact of deficit financing on the performance of the Health sector, implying that as the government borrows to finance the health sector, her performance improves in that field. The analysis showed an average government deficit of $797.4 million, health sector budgets allocation of Shs 923.55 billions, infant mortality rate of 47.51 deaths per a thousand live births, exchange rate of 115.16 and an average fund absorption capacity of 0.6452 over the study period. The study further revealed that infant mortality has been on the decrease over the years, this finding are in agreement with the Health Sector Performance report that indicated a sustained decrease in infant mortality rates, the government budget deficit has been on an increase, fund absorption capacity has been on the decrease and budget allocations to the health sector has been on the increase. In conclusion, the study shows that government deficit financing has a net positive impact of the performance of the Health sector in Uganda. This means that as the government borrows to finance her expenditures, the performance on MDAs increases.