Kenya’s Health Sector Faces Crisis Amid External Funding Withdrawal. Nairobi, Kenya — The Kenyan health sector is facing a critical financial crisis following the withdrawal of significant external funding, particularly from the United States government, according to a new report by the Centre for Epidemiological Modelling and Analysis (CEMA) at the University of Nairobi.
The report, “Immediate Impact of External Funding Withdrawal on Kenya’s Health Sector, “reveals a substantial gap in funding, which has raised concerns about the sustainability and quality of healthcare services in the country.
External funders contributed 18 percent of total health expenditure in 2018/19, with the U. S.
Government accounting for over 60 percent of all external funding to the health sector.
The withdrawal of funding has led to a significant decrease in resources, with external funding for health dropping from KES 126 billion to KES 54 billion in Financial Year 2025/26. This decline has particularly impacted reproductive, maternal, neonatal, and child health (RMNCH) programs, which saw their funding increase from KES 1. 04 billion in Financial Year 2024/25 to KES 5.
85 billion in Financial Year 2025/26, despite the overall reduction in funding.
The government’s contribution to RMNCH also decreased, from KES 1. 04 billion in FY 2024/25 to KES 0.
54 billion in FY 2025/26, suggesting a crowding-out effect of external funding.
Additionally, the report highlights a decrease in funding for HIV, TB, and Malaria, with substantial reductions in external funding from the Global Fund and the government towards the HIV budget.
The commodity funding gap widened to KES 34.
66 billion in FY 2025/26, and counties would need KES 47. 8 billion annually to absorb all the 41,170 PEPFAR-supported staff, most of whom are deployed in high HIV burden counties.
Dr.
David Khaoya, Lead Author and Senior Research Fellow at CEMA, stated, “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.
” The report argues that the withdrawal of external funding presents an opportunity for Kenya to reset and build a more self-reliant, resilient health system. Dr.
Khaoya added, “Increasing domestic investment, strengthening national ownership, and reducing overreliance on external aid are essential if we are to protect health outcomes in the future.
” The Centre for Epidemiological Modelling and Analysis (CEMA) is a research center at the University of Nairobi dedicated to improving health outcomes in Kenya and across Africa through data-driven decision-making.
The long — term impact analysis of this withdrawal is currently underway and will be released in due course.
