NAIROBI: RECENT withdrawal of US government funding has opened a major financing gap in Kenya’s health sector, threatening healthcare delivery and outcomes while exposing the country’s deep dependence on external aid, a new report reveals.
The new report, Immediate Impact of External Funding Withdrawal on Kenya’s Health Sector, by the Centre for Epidemiological Modelling and Analysis (CEMA), University of Nairobi, provides a comprehensive analysis of the external funding landscape and tracks the funds within the health care system, highlighting the areas that are the most affected.
Kenya’s health system is financed through the government, the private sector and external funders. In 2018/19, external funders contributed 18 per cent of total health expenditure, with the US government accounting for over 60 per cent of all external funding to the overall health sector.
To arrive at its findings, the report authors assembled data from the Kenya Ministry of Health (MoH) approved budgets, commodity quantification reports, human resources (HRH) budgets, donorspecific annual reports, and development partners’ operational and grant reports. Their focus was mainly on service disruptions, equity in service access, workforce implications, and impact on the commodity supply chain and infrastructure.
Key report findings include external funding for health significant fall from KES 126 billion to KES 54 billion in Financial Year 2025/26, following the withdrawal of US government support and the decline in government funding, in Financial Year 2025/26, reproductive, maternal, neonatal and child health (RMNCH) was the most funded programme by external sources, receiving KES 5.85 billion, up from KES 1.04 billion in Financial Year 2024/25.
The government contribution to HIV financing was reduced from KES 1.04 billion in FY 2024/25 to KES 0.54 billion in FY 2025/26. This suggests a crowding-out effect of external funding, alongside an overall decline in both external and domestic allocations for HIV, TB and Malaria in FY 2025/26.
External funding from the Global Fund for TB reduced substantially, dropping from KES 4 billion in FY 2024/25 to KES 1.74 billion in FY 2025/26. Similarly, the Global Fund budgeted KES 1.53 billion for Malaria in FY 2025/26, down from KES 4.25 billion in the previous financial year.
As a result of these reductions, the commodity funding gap widened significantly to KES 34.655 billion in FY 2025/26, raising concerns about sustained access to essential medicines and health supplies.
Counties would require an estimated KES 47.8 billion annually to absorb all 41,170 PEPFAR-supported staff, the majority of whom are deployed in high HIVburden counties. This presents a major fiscal challenge for devolved health systems.
In addition, health information systems used to collect, analyse and disseminate health data in Kenya are highly dependent on external support, making them vulnerable to funding fluctuations.
Vulnerable populations—including pregnant women, children, adolescents, and adolescent girls and young women (AGYW)—are likely to be disproportionately affected by these funding declines, potentially widening inequities in access to HIV prevention and treatment services.
In addition, the multilateral external funders are also affected by the change in the US government’s foreign aid policy. Global Fund, World Bank, WHO, and GAVI are recipients of the US government funding. A cut in their global budgets may lead to a reprioritisation of their interventions in the country to fit within their resource envelopes.
While the withdrawal of external funding poses serious risks to health service delivery, the report argues it also presents a critical opportunity for Kenya to reset and build a more self-reliant, resilient health system.
Dr David Khaoya, Lead Author and Senior Research Fellow at CEMA, said, “External funding has long played a significant role in Kenya’s health sector, but it is unpredictable and unsustainable.”
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“This funding shock is a wake-up call. While the challenges are significant, Kenya and other African countries now have an opportunity to rethink how health systems are financed and build longterm resilience.”
“Increasing domestic investment, strengthening national ownership, and reducing overreliance on external aid are essential if we are to protect health outcomes in the future,” he added.