How Kenya can bridge healthcare funding gap after US aid cut - Report

The Centre for Epidemiological Modelling and Analysis at the University of Nairobi has outlined a raft of proposals that Kenya can adopt to bridge the funding gap in the health sector following the suspension of US government foreign assistance.

The proposals are contained in a report titled Immediate Impact of External Funding Withdrawal on Kenya’s Health Sector which warns that the aid cut has created a substantial shortfall, particularly for programmes supporting HIV, tuberculosis, malaria and health information systems.

According to the report, the immediate priority should be increased domestic financing.

It recommends that the national government reprioritise and allocate additional resources to the health sector in the 2025/26 financial year to cushion critical programmes previously supported by US funding.

The report notes that because human resources for health and service delivery are devolved functions, the national government must work closely with the Council of Governors to support counties in taking over activities that were previously donor-funded. 

This includes absorbing salaries and benefits for essential frontline health workers who were on donor payrolls.

In the medium term, the Centre recommends that the government develop a fully costed and time‑bound transition roadmap for programmes supported by multilateral agencies such as the Global Fund and the World Health Organization, both of which have signalled reductions in funding.

The report also calls for improved efficiency across service delivery, supply chains, human resources and health information systems.

It proposes the integration of siloed services, including HIV programmes, and the consolidation of multiple digital platforms into a unified health information system to reduce costs and improve efficiency.

Private sector engagement is identified as another key pillar in bridging the funding gap.

The report urges the government to create a conducive policy environment to unlock private capital for healthcare financing and service delivery, including leveraging the Kenya Medical Supplies Authority’s supplementary supplies division to lower commodity costs through economies of scale.

To further diversify funding sources, the Centre recommends exploring non‑traditional financing mechanisms such as debt swaps, health and impact bonds, and hypothecated taxes on alcoholic and sugary products.

It also calls for negotiations with existing and alternative external partners to prioritise grants over loans and align donor support with government priorities through on‑budget financing.

The report further proposes fast‑tracking a comprehensive, costed donor transition framework for the entire health sector and leveraging the Social Health Authority to cover commodities and specialised services for vertical programmes previously funded by donors, subject to sustainability assessments.

While acknowledging that the transition will be difficult, the report concludes that reducing reliance on external funding could ultimately strengthen Kenya’s health system, improve national ownership, and enhance long‑term resilience.