A Tipping Point For Sustainable Investment In African Health Systems

Key Takeaways

• Global global health financing landscape is contracting rapidly, with projected U.S. global health funding cuts alone leaving up to 75 million children without vaccinations and increasing preventable mortality risk.
• Many African economies face high exposure to declining donor funding in Africa, with aid flows in some countries equivalent to double-digit shares of exports or sectoral revenues.
• Rising sovereign debt distress in African countries is crowding out health investment, as debt servicing now exceeds health spending in over 20 countries.
• Off-budget donor funding weakens planning and reduces incentives for coordinated domestic investment, undermining public financial management reforms for health.
• Health continues to lose budget priority to more politically visible sectors despite clear links to productivity, workforce resilience, and long-term growth.
• Aid reductions have economy-wide effects, including employment impacts of health aid cuts and reduced tax revenues, not just sectoral health impacts.
• Reframing health as an economic and development investment is essential to justify sustained domestic financing.
• Expanding tools such as earmarked taxes, pooled insurance, health financing innovations in Africa, and debt-for-health swaps can help close funding gaps.
• A reset of donor relationships toward local ownership, co-financing, and alignment with national priorities is critical for sustainability.

Executive Summary

This report examines a critical inflection point for sustainable investment in African health systems as traditional sources of external support contract and fiscal pressures intensify. Its purpose is to assess the scale of recent and anticipated donor funding reductions, analyze their macroeconomic and health system impacts, and outline strategic options for governments to sustain and strengthen health systems under tighter constraints. The findings show a sharp shift in the global health financing landscape. The United States plans to withdraw an estimated USD 2.6 billion in support to Gavi through 2030, with overall U.S. global health financing projected to decline by up to 30 percent in FY2025. Other major donors are likely to follow. These cuts place significant strain on multilateral mechanisms that were never designed to fully replace bilateral aid.

Country-level data illustrate the magnitude of exposure. In the USAID withdrawal in Kenya, disbursements reached USD 887 million in 2023, equivalent to 12 percent of export earnings, while the USAID withdrawal in Tanzania resulted in a 26 percent year-on-year decline in flows. At the same time, 52 percent of African countries are in or at high risk of debt distress affecting health financing, and in more than 20 countries, debt servicing exceeds total health spending. This combination of declining aid and shrinking fiscal space threatens hard-won gains in maternal health, nutrition, vaccination, and infectious disease control, while also carrying broader economic risks such as job losses and reduced domestic revenue.

The report concludes that incremental adjustments will be insufficient. African governments must reposition health as a core economic investment, integrate external funds into national budgets, expand domestic and innovative financing mechanisms, and reset donor relationships toward co-financing and system alignment. The choices made now will materially shape long-term development outcomes and economic resilience.