NAIROBI, Kenya – Kenya’s health reforms are staring at a potential collapse following sweeping budget cuts that have gutted critical services and derailed funding for flagship programmes, including the rollout of the new Social Health Insurance Fund (SHIF).
Documents submitted to Parliament reveal a staggering Sh161 billion slash in the proposed health budget—threatening to paralyse key components of the national healthcare system.
Among the most affected are HIV/AIDS programmes, procurement of vaccines and reproductive health supplies, and the operationalisation of the country’s new health financing laws.
The State Department for Medical Services, which had requested Sh426.8 billion to deliver its mandate in the 2025/2026 financial year, has been allocated just Sh105.4 billion—less than a quarter of what it needs.
The budget ceiling is also far below the Sh172.6 billion initially proposed in the Budget Policy Statement.
In submissions to the National Assembly’s Health Committee, Medical Services Principal Secretary Dr. Ouma Oluga warned that the funding shortfall will severely impact service delivery across the board.
“Key areas are either unfunded or underfunded,” Dr. Oluga told the committee chaired by Seme MP Dr. James Nyikal. “These include salaries for state agencies, procurement of medical commodities, human vaccine production, and flagship projects under presidential directives.”
Reforms in Jeopardy
The financial squeeze casts a long shadow over the newly enacted Social Health Insurance Act, Primary Health Care Act, and the Digital Health Act—laws designed to overhaul Kenya’s healthcare financing.
The three pillars of the reform agenda—SHIF, the Primary Health Care Fund, and the Emergency, Chronic and Critical Illness Fund—are all now severely underfunded.
The SHIF rollout alone faces a Sh145 billion shortfall, while the Emergency Fund has received just Sh10 billion out of a Sh107 billion requirement.
Similarly, the Primary Health Care Fund has been allocated Sh13 billion against a Sh61 billion need, leaving a Sh48 billion hole.
“This level of underfunding puts the entire reform process at risk,” said a senior ministry official who requested anonymity. “It’s difficult to transform the health system on rhetoric alone.”
Vaccine, HIV and Family Planning Supplies at Risk
Funding for essential medical commodities has also taken a major hit.
The Ministry faces a Sh4.27 billion deficit for the procurement of vaccines and reproductive health products.
This includes Sh2 billion for routine vaccines, Sh1.69 billion in mandatory co-financing under Gavi agreements, and Sh585 million owed to UNICEF under the Vaccine Independence Initiative.
Meanwhile, family planning programmes require an additional Sh2.88 billion to meet demand, while the country’s HIV/AIDS response has been dealt a double blow: donor support from the U.S. government has frozen, leaving a Sh33.9 billion funding gap that must be covered locally.
The Ministry has requested that these strategic commodity funds be ring-fenced and exempted from future budget cuts.
“There has been a steady reduction in donor funding,” the ministry noted. “This calls for increased government counterpart funding to avoid service disruptions.”
Community Health Promoters and Public Hospitals in Limbo
The Community Health Promoters (CHP) programme—one of the cornerstones of primary healthcare—has also been dealt a critical blow.
Only Sh375 million was allocated in the current financial year for CHP kits and stipends, against a Sh4 billion requirement.
The resulting Sh3 billion shortfall has already become a pending bill.
The situation is equally dire for national referral hospitals and research institutions.
The ministry owes a combined Sh6.1 billion to Kenyatta National Hospital, Moi Teaching and Referral Hospital, Kenyatta University Teaching, Referral and Research Hospital, and the Kenya Medical Research Institute (KEMRI).
A further Sh500 million shortfall in personal emoluments has reportedly led to staff payment delays and intermittent disruptions.
The ministry has also flagged a Sh2.5 billion deficit for health systems strengthening—threatening to stall ongoing process re-engineering and digital transformation efforts.
Mounting Pressure on Parliament
As the National Assembly enters budget deliberations, health advocates are urging lawmakers to prioritise funding for core services and reforms, warning that underinvestment could reverse recent gains in universal health coverage and undermine public trust in the healthcare system.
“The reforms look good on paper,” said Dr. Nyikal. “But without matching resources, they are unlikely to achieve the transformation Kenyans were promised.”
