'Fiscal Space for Health in Uganda' is part of the World Bank Working Paper series. These papers are published to communicate the results of the Bank's ongoing research and to stimulate public discussion. This paper reviews the performance of the health sector in Uganda. It addresses concerns in the Ugandan health community that health financing must be increased to improve health, nutrition, and population outcomes, especially given the rapid increase in the country's population. Although international development aid targeted to health has increased dramatically, Uganda's first priority is actions to reduce waste and inefficiency in existing health expenditures. Such actions could include improved management of human resources in the health sector, strengthened procurement and logistics management for medicines and medical supplies, and better programming of development assistance of health. This paper is targeted to health policy makers and those involved in health services financing, both in the government and in donor agencies.