Islamabad, September 2025 – The World Bank has raised concerns over the state of Pakistan’s health budgeting system, identifying critical inefficiencies that undermine the delivery of essential services across the country. In its latest report, titled “Budget execution in health: from bottlenecks to solutions,” the Bank warned that outdated practices and systemic weaknesses continue to hinder the effectiveness of health spending.
The report found that Pakistan’s health budgets are largely shaped by historical allocations rather than realistic cost-based projections. This reliance on past figures has resulted in frequent under-spending or over-spending, making it difficult to align available resources with actual healthcare needs. Such practices not only distort priorities but also prevent efficient utilization of scarce fiscal space.
Another major issue flagged by the World Bank is the high level of centralization in budgetary processes. Local health facilities, which are directly responsible for service delivery, often have limited or no input in shaping budget allocations. This disconnect leads to cost estimates that do not reflect ground realities, creating a mismatch between funds provided and the resources actually required for day-to-day operations.
Compounding these challenges are delays and unpredictability in the release of funds. Health facilities reported that inconsistent disbursements disrupted their ability to cover even basic expenses, such as utility bills and procurement of essential supplies. Weak cashflow management and unreliable revenue forecasts were cited as recurring reasons for under-execution of health budgets.
The report also highlighted bureaucratic red tape in routine financial operations. It noted that payments as low as Rs200 are subjected to the same cumbersome approval processes as bills exceeding Rs1 million, creating unnecessary delays and duplication of internal controls. While Pakistan has introduced the “Green Corridor” mechanism to fast-track small transactions, the World Bank stressed that wider reforms are necessary to address structural inefficiencies.
The lack of financial autonomy at health facility levels was identified as another critical constraint. Facilities often cannot make independent financial decisions, leaving them dependent on lengthy approval chains. The Bank pointed out that this challenge exists in other developing countries but is particularly severe in Pakistan, where local-level flexibility is minimal.
Technology adoption has also faced hurdles. Despite having automated reporting systems in place, poor connectivity in remote and rural areas has slowed down financial reporting. This has limited the government’s ability to monitor spending in real time, reducing oversight and weakening accountability across the health sector.
The findings arrive at a time when Pakistan is grappling with growing healthcare demands alongside fiscal pressures. Experts believe that without reforms in budgeting and fund management, improvements in healthcare access and quality will remain limited. The World Bank’s assessment suggests that reforms must go beyond piecemeal adjustments, requiring systemic changes that enhance transparency, ensure timely fund flows, and empower local health facilities to make critical financial decisions.
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