Health allocation fails to plug US aid gap, dimming UHC ambitions

The budgetary allocation for the Ministry of Health has failed to address the funding gap left by the freeze on foreign aid from the US government, which has long been a major supporter of Kenya’s healthcare system.

Health experts warn that the failure to bridge this significant shortfall could paralyse service delivery, undermining the Kenya Kwanza administration’s agenda of achieving Universal Health Coverage (UHC).

For the 2025/26 financial year, the National Treasury has allocated Sh138 billion to the ministry — a marginal increase from Sh136 billion in the 2024/25 budget. Of this, Sh105.95 billion is earmarked for the State Department for Medical Services, while the State Department for Public Health and Professional Standards will receive Sh32.15 billion.

In the current financial year, the National Treasury initially approved Sh127 billion for the ministry. However, this was later revised downward to Sh118 billion before a supplementary budget raised it to Sh136 billion following the US government’s stop-work order. “When you look at the current budget for 2024/25, it stands at Sh136 billion. The 2025/26 budget has only increased by Sh2 billion, which is roughly a one per cent increase,” says health economist John Nyangi.

“In real terms, this is actually a decline, considering that inflation is at four per cent.”

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Nyangi notes that the allocation will not cover the same costs as this year’s budget: “It is less. This is a very small increase in nominal terms — just 1.5 per cent — but in real terms, it’s a decline. This means the budget won’t procure the same commodities and services as in 2024/25.”

Of the Sh105.44 billion allocated to the State Department for Medical Services, Sh84 billion is for recurrent expenditure while Sh21.9 billion is for development. The State Department for Public Health will receive Sh32.15 billion, with Sh5.5 billion for development and Sh26.59 billion for recurrent expenditure.

The limited allocation comes as Kenya grapples with the impact of frozen foreign aid, including a Sh30 billion gap left by the US.

“This is especially concerning given dwindling donor support,” says Nyangi.

“Even if we found extra funds, it wouldn’t reach Sh1 billion. To protect progress on HIV, TB and malaria, we must replace United States Agency for International Development (USAID) funding — but the budget doesn’t address this. Where are the priorities?”

He adds: “President William Ruto has committed to quality healthcare for all Kenyans, but without proper funding, this isn’t reflected in action.”

Meanwhile, there is no budget for confirming 8,500 UHC workers to permanent positions or paying their gratuities when contracts end on July 1, 2025.

The National Assembly Health Committee had requested Sh5 billion for gratuities and Sh3.8 billion for permanent positions. This omission risks mass resignations that would cripple primary healthcare services, particularly in rural areas.

“Counties don’t want UHC workers,” Nyangi observes. “Many remote facilities rely entirely on them.”

The Managed Equipment Services (MES) programme will receiveno allocation, despite Sh6.5 billion in pending bills blocking the new National Equipment Service Programme (NESP).

Poorly maintained X-ray and ultrasound machines face accelerated wear and tear. “What becomes of this equipment and the patients who need it?” Nyangi asks.

The Health Committee notes that counties agreed to install their own equipment transparently under NESP, but outstanding MES bills prevent this transition.

Additionally, a Sh3.65 billion shortfall in internship funding (Sh4 billion allocated versus Sh7.68 billion required) may paralyse services as medical graduates can’t be posted. At least 5,499 interns have undergone balloting exercise.

“The issue of posting of medical interns has been a thorn in the flesh, there is a requirement of Sh7.7 billion for interns in 2025/26, but only Sh4 billion has been allocated.

“We should expect tussle of medical interns to continue, the government is likely not to pick all, or maybe half of those required will be posted,” observed Nyangi.

Ironically, as the government banks on Community Health Promoters (CHP) to drive promotive and preventive health agenda, there is no budgetary allocation for procurement of CHP kits, and clearing of pending bills worth Sh3 billion.

CHP kits and consumables require Sh4.39 billion.

“Failing to allocate adequate budget undermines the foundation of UHC that strongly relies on CHPs. CHPs are drivers of healthcare, if we need to move away from curative care that is financially straining,” said Nyangi.