Several African countries face a health financing crisis due to shifting global development finance. For these countries, foreign aid plays a critical role in supplementing national health budgets and, in some cases, contributing close to 60 percent.[1]
In the short and medium term, the aid cuts announced by the US and EU countries will undoubtedly leave millions of under-reached communities without essential health care services and products they need to survive. These cuts are taking place at a time when the same countries impacted face fiscal space challenges caused by high debt servicing costs.
The aid and debt confluence
Access to affordable finance remains a major barrier to Africa’s development aspiration, especially health care. African countries face the highest borrowing costs in the world, with debt servicing amounting to $102 billion in 2024 alone[2] and interests averaging 9.8 percent, compared to 6.8 percent for Latin America, 5.3 percent for Asia and below 3 percent for North America and Europe.[3]
Thirty-four African countries spend more on debt servicing than health care, thus diverting much-needed resources away from investments that help deliver essential health services and products to under-reached communities.[4] Countries such as Ethiopia spend 19 percent more on debt servicing than health care, Ghana 15 percent and Tanzania 12 percent.[5]
Due to limited access to affordable and sustainable finance, these African countries heavily depend on foreign aid. Total aid to Africa has been on an upward trajectory for the last decade, from US$50,9 billion in 2010 to US$59,7 billion in 2023, with health care taking an average portion of 15,2 percent. Much of these health resources have gone into providing essential health care, direct services, procurement, salaries and emergencies caused by climate change.
While aid has played a critical role in protecting the lives of millions of under-reached communities, the time has come for African governments, together with local leaders, philanthropy, and civil society partners, to reimagine and reshape the health finance architecture. A health finance architecture that reduces dependency on aid in the medium-long term by creating fiscal space for health investment and spending through infrastructure, domestic savings, institutional capacity and technology.
Top 10 African countries most exposed to US global health aid cuts and fiscally constrained
| Country | Average ODA gross disbursements received from US for global health, 2022-2023 | US bilateral global health assistance as a % of domestic government health expenditure | Debt distress risk |
| Somalia | 43 million | 237% | Moderate |
| South Sudan | 110 million | 235% | High |
| Malawi | 228 million | 207% | Distress |
| Uganda | 441 million | 95% | Low |
| Liberia | 48 million | 93% | High |
| Mozambique | 414 million | 83% | High |
| Tanzania | 432 million | 59% | Moderate |
| Sierra Leone | 32 million | 52% | High |
| Zambia | 358 million | 49% | Distress |
| Burundi | 30 million | 49% | High |
Source: Center for Global Development
Call to Africa’s Leaders
Take action against high debt premiums: Africa’s leaders need to take bold action against the high cost of capital impacting access to finance. Fair and sustainable debt servicing premiums will create more fiscal space for African governments to make substantive investments in health care and other development sectors. This requires measures at the international and domestic levels that reduce both actual and perceived risks by focusing attention on engaging credit rating agencies on risk profiles, proactive disclosure of social, political and economic data and addressing domestic barriers such as the rule of law.
Policies geared towards reducing aid dependency: While aid currently remains a critical need for several African countries that do not have the fiscal capacity to provide health care – gradual weaning away from aid should be a policy and strategic priority. This requires coherent policies to gradually increase resource mobilization from untapped areas of the economy by leveraging existing aid for long-term investment such as health infrastructure, technology, domestic savings, institutional capacity and strengthening tax systems.
By increasing domestically generated budget revenue for health care, African governments create stability through predictability and the ability to make long-term investments that do not rely on aid volatility.
Become responsive leaders: To ensure existing health resources deliver where it matters the most – policies, actions, and decisions that respond to those most in need when and where they need health care will be required. At this pivotal moment, Africa requires accountable and ethical leaders who respond to local needs. This requires building systems that routinely factor in the needs of under-reached communities in planning, design, delivery and evaluation to improve the quality and access to health care. The aim must be designing health systems anchored on communities’ needs and preferences.
Build values-based governance systems: Rooting out wastages, corruption and mismanagement has become even more critical with the limited resources. Build values-based governance systems that nourish effective and efficient use of resources. This requires building systems and partnerships with civil society that ensure transparency and accountability by governments, donors and all other actors on the supply side of governance and participation, monitoring and feedback from citizens and other stakeholder groups on the demand side. Ensuring that every dollar spent on health care is accounted for and that health care is delivered to under-reached communities is the aim.
Across all this, Africa’s leadership must balance increasing fiscal space and using the limited resources efficiently and effectively. Only then can we build a future where every community can access the health services they need to thrive. The time to act is now.
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[1] World Bank, Policy Brief April 2021, Spending for Health in Malawi: Current Trends and Strategies to Improve Efficiency and Equity in Health Financing, https://openknowledge.worldbank.org/bitstreams/b9816ffa-45a0-5af0-8cf4-14d4cc2582a7/download
[2] ONE Campaign, https://data.one.org/analysis/african-debt
[3] Afreximbank, African Debt Outlook – A Ray of Optimism, February 2025 https://media.afreximbank.com/afrexim/African-Debt-Outlook-A-Ray-of-Optimism.pdf
[4] UK Parliament, Debt Relief (Developing Countries) Volume 756: debated on Wednesday 13 November 2024 https://hansard.parliament.uk/commons/2024-11-13/debates/CE3A75EB-7765-4350-B89A-FCAAD3266731/DebtRelief(DevelopingCountries)#:~:text=Thirty%2Dfour%20African%20countries%20spend,for%2060%25%20of%20education%20expenditure.
[5] ONE Campaign, https://data.one.org/analysis/african-debt