Global aid cuts to hurt Uganda’s health sector – World Bank

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Uganda's health sector stands at a critical juncture as significant cuts in global aid threaten to unravel years of progress in combating different diseases.

The World Bank has warned that these reductions could severely impair the nation's healthcare infrastructure, which relies heavily on external funding. With over 80% of Uganda's health expenditure sourced from international donors and private entities, the withdrawal of support, particularly from the United States government, has created a funding gap exceeding sh604 billion.

(L-R) Richard Kabagambe commissioner budget, Paul Mwanja Commissioner Infrastructure and Social Services Ministry of Finance and Melisa Nyakwera Head Commercial Banking Stanbic bank during the National Dialogue on Health Financing at Speke Resort Munyonyo on May 9 2025. (Photo by Nancy Nanyonga)

This shortfall jeopardises essential services, placing countless lives at risk and challenging the country's ability to maintain its public health achievements.

Rogers Aiku, the health systems and policy specialist at the World Bank, revealed that Official Development Assistance (ODA) from the 17 largest donors is expected to drop by $39.8 billion (18%) from $213 billion in 2023 to $173 billion in 2025.

This was during the three-day national dialogue on health financing for Uganda that took place from May 6 to 8, 2025, at Speke Resort Munyonyo.

Additionally, funding for reproductive, maternal and child health is expected to decline by 37%.

“These shortfalls are critical in countries with a high baseline proportion of external financing for health, like Uganda, 40-50%,” Aiku stated.

He added that the scale of external financing in Uganda is high. In FY2023/2024, sh1.16 trillion was documented as off-budget resources and sh1.1 trillion as on-budget external resources.

What would the impact of the cuts look like?

In the fiscal year 2020/21, Uganda's total current health expenditure stood at approximately sh8.1 trillion, with external sources contributing about 50%, equating to sh4.2 trillion.

A 30% reduction in Development Assistance for Health (DAH) would create a funding gap of sh1.3 trillion, while a 50% cut would result in a shortfall of sh2.1 trillion, World Bank data showed.

These figures highlight the country's heavy reliance on donor funding and the urgent need for sustainable domestic financing strategies to ensure the continuity of essential health services.

“Any gaps that materialise will put pressure on government domestic spending, increase out-of-pocket spending and foregone care, and reverse hard-won gains, including financial risk protection,” Aiku noted.

Although external and private financing accounted for 84% of current health spending between 2014 to 2021, Aiku said health financing is inadequate compared to its own regional and global benchmarks.

"The rising risk of complicated health conditions amid cuts in external financing calls for deliberate transformation of the national health financing system, hinged on domestic financing. Expanding fiscal space through budget reprioritisation, health taxes, and motor third party could raise an additional US$11 per capita to the current budget of US$18 per capita," Aiku suggested.

What Museveni says

In his speech delivered by the Prime Minister Robinah Nabbanja, President Yoweri Museveni acknowledged that Uganda's health financing falls short of the Abuja Declaration target.

(L-R) Richard Kabagambe commissioner budget, Paul Mwanja Commissioner Infrastructure and Social Services Ministry of Finance and Melisa Nyakwera Head Commercial Banking Stanbic bank during the National Dialogue on Health Financing at Speke Resort Munyonyo on May 9 2025. (Photo by Nancy Nanyonga)

He commended development partners for their contributions, which, along with individual out-of-pocket expenditures, have helped bridge some funding gaps.

Highlighting the country's rapidly growing population and increasing disease burden, he emphasised the need to leverage innovative financing mechanisms to avert potential crises.

“It is important that we leverage innovative financing mechanisms in order to avert imminent crises. It is also necessary to expedite these efforts because our people are paying heavily to access health care services, especially in private health facilities,” Museveni said.

He further urged that the health sector identify leakages and areas of inefficiency to maximise utility for the available resources and reduce donor dependency, since about 30% of the total health expenditure is contributed by out-of-pocket.

What others say

Adda Faye, chief financial officer at the Global Fund, explained that the fund has been a strong partner to Uganda since 2002, disbursing over $5 billion annually across more than 100 countries, with Uganda playing a key role in shaping and advancing many of its initiatives.

“I want this forum to remember that investing in health is investing in people, but it's also investing in economic prosperity and growth. However, we all know that the shifts in the current landscape reinforce the importance of these conversations,” Faye explained.

To her, as global health financing undergoes rapid changes, there is both increased uncertainty and new opportunities.

“While external funding becomes more volatile, this shift challenges countries like Uganda to lead with innovation, efficiency, and new models of health service delivery. With the right partnerships and strategies,” Faye added.

She emphasised that Uganda has the potential to be a continental leader in redefining how health systems can power broader development.

World Health Organisation (WHO) country representative Dr. Muhinga Kasonde stated the need to build a financing system that is resilient to external shocks.

“How can this be done? By making efficiency and accountability non-negotiable. Prime Minister, we can cut inefficiencies through better coordination, digital tracking, removing ghost workers, and stronger workforce performance management,” Kasonde said.

(L-R)Front line: Joseph Ruyonga Chair Parliamentary Committee on Health, Robinah Nabbanja the Prime Minister of Uganda, Robin Nandy Country Representative UNICEF, Gift Malunga Country Representative UNFPA, Second line Daniel Kyabayinze Director Public Health,Jackie Katana Executive Director Faith for Family health initiative,Paul Mwanja Commissioner Infrastructure and Social Services Ministry of Finance, Grace Kiwanuka Ssali Executive Director Uganda health Care Federation and Charles Olaro Director Health Service pose for a group photo. (Photo by Nancy Nanyonga)

He added that Uganda could explore innovative financing options such as development impact bonds, blended financing, structured public-private partnerships, and institutionalised equity.

The US government's pause on USAID funding, starting January 20, 2025, has significantly affected Uganda’s health sector. Many projects were suspended, essential services disrupted, and thousands lost their jobs. The move has also raised concerns about the reliability of US aid and its impact on the country’s development.

After the withdrawal of USAID funding, the government pledged to find alternative sources to fill the gap and sustain essential services, especially in health and HIV/AIDS programs. Prime Minister Robinah Nabbanja said they are seeking Executive guidance and working with local and international partners to mobilise resources.