By Sharon Atieno
With external funding contributing significantly to Kenya’s healthcare system, the United States (US) funding withdrawal is posing a significant threat to the sector, a new report shows.
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 sector primarily has three funders: the government, the private sector, and external funders. In 2018/19, external funders contributed 18 percent of total health expenditure, with the US government accounting for over 60 percent of all external funding to the overall health sector.
According to the report, the US funding pullout led to a decline in the external funding from KES 126 billion (US$ 970 million) to KES 54 billion (US$ 416 million) in Financial Year (FY) 2025/26.
In FY 2025/26, reproductive, maternal, neonatal, and child health (RMNCH) was the most funded program by external sources, receiving KES 5.85 billion (US$ 45 million), up from KES 1.04 billion (US$ 8 million) in FY 2024/25. However, the government contribution was reduced from KES 1.04 billion (US$ 8 million) in FY 2024/25 to KES 0.54 billion (US$ 4 million) in FY 2025/26, suggesting a crowding-out effect of external funding.
The report notes a decline in external and government funding for HIV, TB, and Malaria in FY 2025/26.
The external funding from the Global Fund for TB, for instance, reduced substantially from KES 4 billion (US$ 30 million) in the FY2024/25 budget to KES 1.74 billion (US$ 13 million) in FY 2025/26.
In Malaria, the Global Fund budgeted for KES 1.53 billion (US$12 million) for FY2025/26, down from KES 4.25 billion (US$ 33 million).
The report also notes that the commodity funding gap widened to KES 34.655 billion (US$ 267 million) in FY 2025/26.
Further, it notes that counties would need KES 47.8 billion (US$ 367 million) annually to absorb all 41,170 U.S. President’s Emergency Plan for AIDS Relief (PEPFAR)-supported staff, the majority of whom are deployed in high HIV-burden counties.
The report also predicts that vulnerable populations, including pregnant women, children, adolescents, and adolescent girls and young women (AGYW), will be disproportionately affected, widening inequities in access to HIV prevention and treatment services.
The report authors assembled data from the Kenya Ministry of Health (MoH) approved budgets, commodity quantification reports, human resources (HRH) budgets, donor-specific 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.
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.”
“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 long-term resilience.”
Dr. Khaoya noted that increasing domestic investment, strengthening national ownership, and reducing overreliance on external aid are essential if health outcomes are to be protected in the future.
A long-term impact analysis of this withdrawal is currently underway and will be released in due course.
