Dossier 2025 Part 1: Rethinking Health Financing in Africa

Back-to-School Dossier 2025
Part 1 - Rethinking Health Financing in Africa and Moving Beyond Dependence on International Aid

1. An Unprecedented Collapse in International Aid

Africa’s health sector is facing an unprecedented financing crisis, driven by a 70% fall in Official Development Assistance (ODA) between 2021 and 2025, according to Africa CDC’s latest report, as well as deep structural vulnerabilities. This collapse is placing immense pressure on already fragile health systems, with ODA considered the backbone of essential programs: pandemic preparedness, maternal and child health services, and disease-control programs. All are now threatened, jeopardizing Sustainable Development Goal 3 and Universal Health Coverage.

This is compounded by Africa’s debt spiral: countries on the continent are expected to devote 81 billion USD to debt servicing by 2025, more than anticipated external financing flows, further reducing fiscal space for health investments.

Finally, African countries continue to allocate insufficient domestic resources to health, compromising progress on equity and system resilience. Data from the World Health Organization’s Global Health Expenditure Database show that over the past decade, domestic public health spending in many African countries has stagnated or grown too slowly to keep pace with demographic growth, disease burden and inflation.

The financial system’s vulnerability deepened with the 2025 announcement of major foreign-aid cuts by the United States. The State Department’s 2026 budget request provides for a two-thirds reduction in bilateral funding for global health. These cuts include a reduction of 50% in HIV/AIDS funding according to the OECD, as well as the elimination of contributions to the Global Fund, Gavi (the Vaccine Alliance) and the World Health Organization (WHO).

PEPFAR at Risk and Essential Services Disrupted

The impact of these decisions is particularly striking in flagship programs such as PEPFAR, the leading US initiative to fight HIV/AIDS in Africa. Suspensions and funding freezes have triggered a wave of operational disruption: disorganized medicine supply chains, critical shortages of antiretroviral treatments, abrupt suspension of prevention and awareness campaigns, temporary clinic closures and reduced access to services for the most vulnerable populations.

According to the international network of associations "Coalition Plus," these interruptions are not simple one-off inconveniences: they compromise continuity of care, worsen health inequalities and threaten to set back by several years the progress achieved in the fight against HIV/AIDS. Rural and marginalized communities, already weakened by limited health infrastructure, are hit hardest by the consequences of this financial volatility, illustrating how dependence on external aid can become a factor of structural vulnerability.

Irreversible Effects on Public Health

The effects are not limited to the short term. A modeling study conducted by Massachusetts General Hospital in South Africa shows that a reduction in PEPFAR funding would, by 2034, cause hundreds of thousands of new HIV infections and deaths. It also estimates a significant loss of life-years per infected person. Even if funding later resumed, the health situation would not return to its initial level, illustrating the lasting, even irreversible, effect of these setbacks.

In addition, according to the OECD, cuts in official development assistance allocated to health range between 16% and 29% in sub-Saharan African countries, strongly affecting countries such as South Africa, Kenya, Mozambique, Uganda and Tanzania, where this aid represents more than a quarter of total health financing.

This vulnerability is also reflected in access to vaccines. At Gavi’s replenishment summit, uncertainties around donor financial commitments highlighted the fragility of vaccination programs that depend almost entirely on external aid. Such dependence limits African countries’ ability to plan over the long term and guarantee stable vaccination coverage. It also increases the risk of supply disruptions, compromising public-health goals such as the elimination of cervical cancer.

2. Building African Health-Financing Models

Faced with the gradual decline in international financing, African states must rethink their strategies and invent more resilient mechanisms. Several promising avenues can be considered:

Establishing a hybrid financing model that mobilizes both public resources and private capital:

This type of financing relies on a range of instruments, including:

• blended finance, an approach that combines public, philanthropic and private resources. Gavi, for example, has mastered this instrument by combining public funds (donor states), philanthropic funds (the Gates Foundation) and private funds (pharmaceutical laboratories and investors through "vaccine bonds"). The result: millions of children vaccinated where no single actor would have financed the effort alone. The major value of this approach is that it reduces risk for private investors by associating them with public or philanthropic financing, making it easier to access capital for projects with strong social or environmental impact.
• social impact bonds, financial instruments in which a private investor finances a social project. If predefined results are achieved, the investor is repaid with a return; if the project fails, the investor bears the loss.
• Finally, public-private partnerships (PPPs): in Cote d’Ivoire, for example, a first hybrid public-private partnership was launched to strengthen laboratory and medical-imaging services in 14 public hospitals. Cofinanced by the private sector, the World Bank and the Global Financing Facility, this project aims to broaden access to quality diagnostics for women, children and vulnerable populations while optimizing the use of limited public resources.

The Example of Cross-Subsidization Financing, or the Mutualist Model:

In the same spirit of financial innovation, another method stands out: cross-subsidization, or the mutualist model. This mechanism is based on solidarity, asking those with greater means to contribute more in order to subsidize access for the most vulnerable. In health, for example, services partially financed by wealthier populations can guarantee free or affordable care for low-income households, thereby strengthening system equity and effectiveness.

The experience of several countries confirms the effectiveness of the mutualist model based on cross-subsidization. In Burkina Faso, Brazil, Mexico and other WAEMU countries, social mutuals have been structured so that higher-income people partially finance care for the most vulnerable. Through a strong legal framework, organized collection and targeting of priority services (vaccination, maternal and neonatal health, staff training), these systems enabled Cameroon between 2010 and 2015 to halve maternal mortality, reduce infant mortality and improve vaccination coverage and quality of care.

Aligning External Financing: The Lusaka Agenda

Beyond hybrid and mutualist financing, aligning external financing with national plans is essential. The Africa CDC experience shows that fragmented aid causes efficiency losses that can reach 15% to 25% of total spending. The Lusaka Agenda proposes:

• the creation of national task forces bringing together government, donors and institutions such as Africa CDC to coordinate the use of funds;
• transparency and monitoring platforms, enabling real-time tracking of the impact of financing on national priorities;
• incentive and recognition mechanisms for countries aligning their external financing with their health strategies.

This approach ensures that every dollar invested by international partners genuinely contributes to national and continental priorities.

Taxes and Innovative Levers

To diversify financing sources and reduce dependence on external aid, several innovative levers should be considered:

• Airline-ticket tax (solidarity levy), already tested by UNITAID, can generate several million dollars for health;
• Import taxes on goods, or taxes on high-consumption products (telecoms, alcohol, tobacco, sugary drinks) to mobilize stable resources;
• Diaspora bonds: capturing a fraction of the 95 billion USD in annual remittances to finance health.

These instruments, combined with PPPs, mutuals and blended finance, create a more complete and robust financing landscape capable of supporting African health systems sustainably.

Conclusion

The gradual withdrawal of international donors, illustrated by drastic US cuts in global-health financing, highlights the structural vulnerability of African health systems when they rely mainly on external aid. The examples of PEPFAR and HPV-vaccine financing clearly show that such dependence exposes countries to abrupt disruptions in essential services, with sometimes irreversible health consequences.

Faced with this fragility, the proposed solutions, whether hybrid financing, cross-subsidization or more rigorous investment prioritization, offer solid avenues for building more resilient, equitable and sustainable health systems. However, these innovations are not an end in themselves: they must be part of a broader strategy aimed at reducing external dependence and strengthening African states’ capacity to finance and govern their own health development.

It is from this perspective that reflection on African health sovereignty becomes essential, going beyond financing alone to question the continent’s control over its political, economic and technological choices.