Health Sector

Health Sector

Health Sector, © EPA

26.03.2018 - Article

Nepal has made remarkable progress in the health sector since 1990. Maternal, under-five and infant mortality rates have been reduced by 76 %, 73 % and 67 % respectively with gains made in halting and reversing trends of tuberculosis, HIV and malaria. During this period, polio also has come towards eradication and leprosy to elimination stage. Nepal still faces major challenges, particularly in reducing neo-natal deaths and managing malnutrition. About half of children under the age of five are affected by stunted growth. Adolescent sexual and reproductive health continues to be a major issue with a high unmet need for family planning (34.9%, DHS 2016) and the need for menstrual health and hygiene for adolescent girls is important. Undernutrition among children, adolescents and women is still a serious public health problem. Food availability and security remain uneven, particularly in remote areas. A major challenge is to ensure that skilled birth attendants provide all women and newborns with a continuum of care throughout pregnancy, delivery and the post-partum period. Nepal continues to be affected by communicable diseases and is simultaneously confronted with upward trends of non-communicable diseases, such as diabetes, kidney ailments, cancer and heart diseases.

A major challenge for the Ministry of Health (MoH) during the coming years will be to ensure the uninterrupted provision of health services during the state restructuring process. This requires fundamental administrative and structural reforms of the entire health system. These reforms would also offer opportunities to improve the effectiveness, efficiency, and governance of the health system.

After completion of two sector programs, Nepal has initiated the 3rd phase of the Nepal Health Sector Strategy (NHSS) 2015 – 2020 and NHSS Implementation Plan 2016 - 2021 (NHSS-IP). With the overall objective of Universal Health Coverage

(UHC) for essential health care services, NHSS has four strategic pillars: 1) equitable access to health services; 2) quality health services; 3) health system reforms and 4) multi-sectoral approach.

Government expenditure in the health sector has hovered around 5 - 6 % of the national budget. The total budget for the five-year period of NHSS-IP, until mid-2021, has a preliminary estimate of about US$ 2.5 billion.  Approximately 35 % of this amount is foreseen as contribution from external development partners. Government contribution is likely to remain at 65 - 70 %. The development and imple­mentation of sustainable health financing mechanisms are necessary to reduce the currently high levels of out-of-pocket expenses and overall dependency on external budget Support.





Infant mortality rate (IMR)




Neo-natal mortality rate (NMR)/000




Under-five mortality rate (U5MR)/000




Proportion of children fully immunized (%)




Maternal mortality ratio (MMR)/00000




Proportion of Institutional delivery %




Contraceptive (modern)  prevalence %




Adolescent fertility rate /000




Pregnant women who had four ANC check-ups as per protocol %




Proportion of underweight <5 children stunted (%)




Total fertility rate/WoRA




German Development Cooperation (GDC) Activities and Contribution

The German Federal Ministry for Economic Cooperation and Development (BMZ) supports the development of the health sector as one of three priority areas in Nepal. Germany’s Technical (TC) and Financial Cooperation (FC) have been fully aligned within the Sector-wide Approach (SWAp).

Support to the Health Sector Programme
(S2HSP) - TC

This programme adopts a multi-level approach that is closely incorporated into the implementation of the NHSS in which it advises the government actors at all levels in the planning and implementation of sectoral reforms. This TC module concentrates on five thematic areas:

  1. Implementing a social health insurance system, including hospital management;
  2. Strengthening human resources for health;
  3. Strengthening governance in health with focus on the transition to a federal system and urban health;
  4. Improving and harmonising health information systems;
  5. Promoting adolescent health and development.
  6. Financial volume of TC (2016–2020): The German TC contribution will be up to EUR 12.26 million. In addition, two partnership agreements have been signed: The Korean International Cooperation Agency (KOICA) contributes EUR 1.1 million and the Global Fund to Fight AIDS, TB and Malaria (GFATM) complements EUR 509,000 through Save the Children International (SCI), the Principal Recipient.
Recovery-Health Component – TC

The health component of the Recovery project is being implemented in Dhading and Nuwakot districts. The project has helped to construct 33 prefabricated health posts and one large prefab structure at Nuwakot District Hospital. In addition, the retrofitting of three health facilities was completed during 2016. This reconstruction work also includes energy and internal water supply, waste management, and the provision of medical equipment and basic furniture.

Sector-wide Approach/ NHSS – FC

German FC supported the two preceding SWAps. SWAp II was financed through a pooling mechanism. In respect to SWAp III or NHSS, besides project based financing, international development partners, including DFID, World Bank, GAVI and GDC, will continue to support MoH through a basket funding mechanism which will also include results based financing through Disbursement Linked Indicators (DLI).

Financial volume: € 10 million.  Project period: 2016-2021.

Improvement of Maternal and Child Care in Remote Areas - FC 

In collaboration with German TC and leveraging existing TA from relevant development partners, this project aims at achieving increased utilization of quality health services with a focus on antenatal and new-born care in the Far and Mid-Western Regions. In addition to rehabilitation / reconstruction support, the project targets improving hygiene conditions, and supports the supply of appropriate equipment for basic and comprehensive obstetric care to enhance referral system in the remote areas. Additional components address availability of contraceptives and offer modern communication means for health workers in these rural areas. Financial volume: € 10 million. Project launched mid-2016 and completion expected by 2019.

Recovery: Health Component - FC

As part of German support for post-earthquake measures, FC will be channelled to reconstruct / rehabilitate four district hospitals in the affected districts of Rasuwa, Dolakha, Ramechhap and Gorkha. The project will also provide necessary medical equipment to these district hospitals. Project launched in early 2016, and the Inception phase has recently concluded. Financial volume: € 10 million. Completion expected by 2019.

Support to National Scale up of FC Equipment Maintenance Project

Residual FC funds are being utilized to support MoH in scaling up the outsourced Health Facility Equipment Maintenance project across the Country.

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