President Donald Trump’s decision to gut the United States Agency for International Development (USAID) has sent shockwaves globally, particularly in the Global South, where the agency funds numerous projects. Data from the US Department of State indicates that Kenya stands to lose KSh 39.5 billion in healthcare funding—the largest cut from USAID Kenya’s programmes. Other affected sectors include education, humanitarian aid, and democracy initiatives.

This move follows an executive order signed by President Trump in his first week in office, pausing foreign aid and withdrawing the US from the World Health Organisation (WHO). While the Global South, which depends heavily on development aid for critical sectors like healthcare, may find these actions alarming, they reflect a broader trend of declining development assistance. As more African countries transition from low- to middle-income status, they are increasingly seen as capable of financing their own development. Consequently, some donors are shifting their support away from these middle-income countries (MICs) to focus on nations with greater financial need. 

Kenya, however, remains particularly vulnerable to these shifts due to its heavy reliance on donor funding for healthcare. Four major donors—the US government, the Global Fund, Gavi, and the UK—account for nearly 90% of all health official development assistance (ODA). Notably, both the Global Fund and Gavi receive significant US government contributions, giving the US a disproportionate influence over Kenya’s health financing landscape. As US funding declines, Kenya must prepare for the potential disruption in healthcare financing and explore sustainable domestic alternatives.

Whilst National Treasury Cabinet Secretary John Mbadi has indicated that the national budget will be restructured to sustain critical programmes affected by the cuts, former President Uhuru Kenyatta’s warning against overdependence on foreign aid rings true:

“I saw some people crying the other day that Trump has withdrawn aid. Why are you crying? It’s not your country. He has no reason to give you anything—you don’t pay taxes in America. This is a wake-up call for you to say, ‘OK, what are we going to do to help ourselves?’”

In this spirit, how can Kenya finance its healthcare needs without excessive reliance on donor funding?

Transition readiness planning

Given Kenya’s dependence on donor aid, the country must proactively identify vulnerabilities in its health financing system. A domestically formulated transition readiness plan could pinpoint at-risk areas in healthcare financing and prepare strategies to prevent disruptions in the event of sudden funding shocks.

Increased domestic health budget allocation

Kenya’s Health Ministry received Kshs. 141.2 billion in the 2023/24 budget, representing 11% of the total annual budget, down from Kshs. 146.8 billion in 2022/23. This reduction contradicts the Abuja Declaration, in which African nations committed to increasing health budget allocations and ensuring efficient use of health resources. A renewed commitment to raising domestic health funding is necessary to reduce reliance on foreign donors.

Public-private partnerships 

Collaborations between the government and private sector can be a strategic approach to mobilising additional resources for healthcare. By leveraging the expertise and capital of the private sector, Kenya can enhance healthcare accessibility, affordability and quality while reducing the financial strain on public resources.

Health bonds

Health bonds could provide Kenya with a sustainable alternative to donor funding by attracting private investment for critical healthcare initiatives. These bonds, including social impact bonds (SIBs), green and sustainable bonds, and diaspora bonds, can finance programs such as disease control, immunisation, and health infrastructure while ensuring returns for investors.