Health equity starts with informal sector inclusion
A group photo of stakeholders from various regions of Tanzania who met in Dodoma in November 2024 to discuss the Tanzania Universal Health Coverage Act of 2023 and its implications for informal sector workers in the country.
What you need to know:
- The UHC will be financed through a variety of sources, including member contributions, government health budgets, donor funds, a dedicated health fund account, mobile money transactions, betting revenues, and levies on alcohol, cosmetics, soft drinks, and motor insurance.
By Gaston Kikuwi and Anna Mbise
Since gaining independence, Tanzania has prioritized providing essential social services, particularly education and healthcare, free of charge. However, the country’s capacity to sustain this model began to wane in the late 1980s, prompting significant health sector reforms.
In the early 1990s, the first wave of reforms aimed to improve health financing by transitioning from a solely budget-funded system to a mixed financing model. Key milestones included the introduction of user fees in 1993, the Community Health Fund (CHF) in 1996 as a pilot project in Igunga District, Tabora Region and the National Health Insurance Fund (NHIF) in 1999.
These initiatives were intended to boost funding, enhance community participation, and increase provider accountability.
However, there are valuable lessons to be learned. The NHIF, along with its voluntary counterpart, the improved Community Health Fund (iCHF), was designed to cover wage-employed individuals, especially civil servants, and households from the entire community. However, the vast majority of informal sector workers were not included, coupled with high dropouts, which weakened the sustainability of the Fund.
In response, civil society organizations such as the VIBINDO Society and many others introduced micro health insurance schemes like UMASIDA, MBAKAYO, Atman Msimbazi Center, Atman Manzese Scheme, CHAWANA-Bima, Mburahati Health Trust Fund, and many more, targeting the informal sector. Despite their good intentions, most of these schemes collapsed due to challenges related to coverage, benefit packages, outreach, governance, fraud, and public mistrust.
These lessons, especially in the context of this year’s Labour Day celebration, need to be considered to guarantee a socially just, fair, and inclusive health coverage for all workers.
As of now, the combined coverage of the National Health Insurance Fund (NHIF) and the Community Health Fund (CHF) remains below 8% of Tanzania’s total population, including formal and informal workers. This has resulted in a highly fragmented and inequitable health system, characterized by limited access to services and widespread financial hardship caused by out-of-pocket payments. Considering the significantly low coverage as a sad reality of Tanzania in the 21st century, there is a strong need for concerted action.
Tanzania continues to face a heavy burden of diseases, with non-communicable diseases (NCDs) being a leading cause of death. Meanwhile, workers in the informal sector, who make up nearly 80% of the population, remain largely uncovered by health insurance. Public investment in health remains low, consistently falling below the 15% benchmark set by the Abuja Declaration.
In the 2024/2025 national budget, the Ministry of Finance allocated only 5.15% of the total Sh 49.3 trillion budget to the health sector. The current per capita health spending stands at just US$11, significantly below the World Health Organization’s recommended US$34.
Mr. Gaston Kikuwi, VIBINDO Chairperson, facilitates a session on the informal sector’s recommendations on Universal Health Coverage, April 8th, 2025, in Dodoma.
The Universal Health Coverage Act 2023
Recognizing the urgent need for reform, the Parliament of Tanzania passed the Universal Health Coverage (UHC) Act 2023, which was assented to by the President in August 2023.
The Act mandates compulsory health insurance for all Tanzanians and for non-citizens residing in the country for more than 30 days. It seeks to integrate existing schemes such as NHIF, CHF, and private insurance under one unified system.
The UHC will be financed through a variety of sources, including member contributions, government health budgets, donor funds, a dedicated health fund account, mobile money transactions, betting revenues, and levies on alcohol, cosmetics, soft drinks, and motor insurance.
UHC is structured around three benefit packages:
1. Mandatory Basic Package, covering services from dispensaries to public hospitals.
2. Community Health Services Package, addressing community-level healthcare needs.
3. Supplementary Services Package, offering additional benefits.
The Tanzania Insurance Regulatory Authority (TIRA) has been tasked with supervising the implementation of all health insurance schemes.
Stakeholders’ reflections and recommendations
Connecting with this year’s May Day theme set by the Trade Union Congress of Tanzania (TUCTA) and the broader labour movement, “The 2025 General Elections Should Give Us Leaders Who Will Protect Workers’ Rights,” VIBINDO, the umbrella organization for informal sector associations emphasizes the need for inclusive implementation of the Universal Health Coverage (UHC) Act of 2023.
On various occasions, VIBINDO, in collaboration with Friedrich Ebert Stiftung (FES) Tanzania, has organized stakeholder workshops, including sessions held at the end of 2024 and in April 2025, to reflect on the UHC Act. During these workshops, participants analyzed critical aspects of the UHC scheme, such as financing, governance, and outreach, while discussing its implications for informal sector workers and other unemployed members of society. Specifically, VIBINDO would like to see strategic and inclusive actions as follows:
1. Expanding financing sources
Participants noted that the current funding model outlined in the Act is insufficient. Suggested additional funding sources include:
• A gradual increase in government health budgets, reaching 15% within 6–8 years.
• Revenue from the mining sector via a Sovereign Wealth Fund.
• Contributions from large fishing firms and major investment projects.
• Funds from local content initiatives, tourism, and sports events, such as football and dance.
• Levies on mobile communication towers and digital economy platforms.
Mr. Hipoliti Paul Lello, the Director of Membership Services at the National Health Insurance Fund (NHIF), gives a presentation during the VIBINDO workshop 2024 in Dodoma.
2. Establishing a UHC supervisory board
To ensure efficiency and sustainability, stakeholders proposed the formation of a UHC Board. This body would guide the responsible ministry on UHC matters and include members from public and private healthcare providers.
3. Mobilizing the informal sector
Given its significant contribution to the GDP and its vast workforce, informal sector workers must be meaningfully engaged. The Act should mandate organizations representing informal workers to serve as agents for outreach, mobilization, member enrollment, and the collection of health insurance premiums.
With the UHC Act in place and implementation underway, Tanzania has an opportunity to redefine its health landscape. By strengthening governance, expanding financing sources, and mobilizing the informal sector, the nation can make significant strides toward achieving universal access to quality and affordable healthcare.
However, the path forward demands unwavering political will, cross-sectoral collaboration, and genuine community engagement to ensure that no one is left behind.
About the authors:
Gaston Kikuwi-VIBINDO Chairperson
Anna Mbise-FES Trade Union Coordinator
