By: Habte H.
In recent years, growing concern has surrounded the alarming pay and declining income levels of Ethiopia’s physicians and health workers. These concerns go far beyond personal compensation – they point to a deeper structural flaw in the way the country finances and governs its health system. Despite repeated warning signs, little has changed. Without urgent and far-reaching reforms, Ethiopia risks the continued erosion of its health workforce – and with it, the collapse of the very foundation of public health service delivery.
The problem is not that Ethiopia lacks the financial capacity to pay its health professionals adequately. On the contrary, other sectors such as Ethiopian Airlines, commercial banks, and telecommunications companies already compensate their staff at levels that are both competitive and sustainable. These sectors benefit from structural autonomy and the ability to generate and reinvest their own revenue. Health care, however, remains tied to an outdated financing and administrative model that treats the sector as a passive recipient of public funds rather than an essential, dynamic system with revenue-generating potential. If Ethiopia can pay its pilots, bankers, and engineers well, why can’t the same be true for its doctors and nurses? The difference lies not in capacity, but in structure.
Poor Pay, Deep Consequences
Let us be clear: the current pay scale for physicians and health workers is unsustainable. A new graduate medical doctor earns less than what many entry-level bank tellers make. The ripple effect is enormous. Disillusioned health workers deliver demoralized care. Young students abandon the dream of entering medicine altogether. Who wants to dedicate seven years – or more – of exhausting education and training only to face economic hardship and institutional neglect?
More importantly, this sends a dangerous societal message: education no longer pays. When health professionals, among the most trained and skilled members of society, are underpaid and underappreciated, the legitimacy of the entire education system is undermined. Young people will seek quicker, informal pathways to income – fuelling the rise of non-merit-based ambitions.
The Core Problem: Structural and Financial Inflexibility
The root of the crisis is not financial scarcity – it is structural rigidity. The health sector is suffocated by its alignment with the civil service pay structure, known as the Common Payroll Administration (CPA). This one-size-fits-all model completely ignores the unique demands, revenue-generating potential, and service urgency of the health sector.
Moreover, the current financing model is heavily dependent on public budgets and donor support. This leaves little room for health facilities to innovate, invest, or improve wages. Health professionals are treated not as essential service providers but as public liabilities – subject to stagnant salaries and bureaucratic delays.
A Two-Pronged Solution
To reverse this trajectory, I propose two bold but practical structural adjustments:
1. Detach the Health Sector from the Traditional Civil Service System
The first step is to grant the health sector operational autonomy – just as we have done with airlines, banks, and some public universities. The Ministry of Health should function not as a civil service bureau, but as a national authority or semi-autonomous public corporation with a clear mandate to set its own wage structures, reinvest internal revenues, and manage performance-based incentives.
Hospitals and health centers must be empowered to generate, retain, and utilize their own revenue through insurance payments, service charges, and public-private partnerships. This autonomy would allow competitive pay and create accountability to quality and outcomes. When a hospital performs better, it should be able to pay better.
2. Transition to a Dual-Layer Health Insurance System
The second structural reform involves phasing out direct salary payments and shifting toward a sustainable health insurance-based model. The government’s role should focus on financing insurance coverage for the poor and vulnerable, not administering every payroll.
This dual-layer system would include:
- A publicly funded scheme for those unable to pay
- A contributory scheme for employed individuals and private entities
In this model, hospitals and clinics would be reimbursed based on the services they provide. Funds would flow to institutions, not through centralized salary lines. This performance-based flow of financing would encourage efficiency, professionalism, and innovation – and enable facilities to offer competitive compensation packages aligned with results.
Countries like Rwanda, Ghana, and Thailand have successfully reformed their health financing systems this way. Ethiopia can – and must – do the same.
What is at Stake?
These reforms are not radical. They are rational. Without them, Ethiopia’s health system will face a slow collapse – not because of a lack of infrastructure or technology, but because of brain drain, disinterest, and institutional fatigue.
We must stop pretending that piecemeal salary increases under a broken system will solve this crisis. We need structural reinvention, starting with financing reform and autonomy in human resource management. This is not about giving more money to doctors – it is about building a system that can sustain its own future.
We already know what needs to be done. The only question is whether we have the courage and clarity to do it.
Editor’s Note : Views in the article do not necessarily reflect the views of borkena.com
__
Subscribe : https://borkena.com/subscribe-borkena/
Join our Telegram Channel : t.me/borkena
Like borkena on Facebook
Add your business to Ethiopian Business Listing / Ethiopian Business Directory Business Listing Toronto
Join the conversation. Follow us on X (Formerly Twitter) @zborkena to get the latest Ethiopian News updates regularly. Subscribe to YouTube channel To share information or for submission, send e-mail to info@borkena.com
Thoughtful comment,I admire intellectual with their writing contents geared towards solutions .Most of them they prefer condmonation of the status que as main target.