African health financing faces a critical challenge as Official Development Assistance (ODA) declines sharply. In this update I outline Africa CDC’s concept paper on the current challenges, the impact on health outcomes, and a strategic three-pillar approach to improve health financing across the continent.

Current Challenges in Health Financing

A sharp decline in ODA, projected to drop by 70% from 2021 to 2025, severely impacts African health systems. This reduction, coupled with rising debt obligations expected to reach USD 81 billion by 2025, strains the ability to fund essential services like pandemic preparedness and maternal health. Many African countries rely heavily on ODA, which constituted nearly 30% of health expenditures in low-income nations.

Impact on Health Outcomes

The decline in ODA has led to a 41% surge in public health emergencies, from 152 in 2022 to 213 in 2024. This increase, driven by outbreaks such as mpox and Ebola, alongside climate-induced crises, has overwhelmed health systems. Moreover, over 90% of medical countermeasures, including vaccines and diagnostics, are imported, leaving Africa vulnerable to supply chain disruptions. The shortage of health workers, with only 1.5 professionals per 1,000 people, exacerbates the situation.

A Three-Pillar Strategy for Sustainable Financing

Pillar 1: Increasing Domestic Financing

Strengthening domestic resources is vital for reducing dependency on external aid. African countries must aim to meet the Abuja Declaration’s 15% health budget target. Ghana’s National Health Insurance Scheme, which increased enrollment to 70% by legislating annual budget increments, offers a successful model. Robust monitoring and accountability frameworks, like Ethiopia’s Health Sector Transformation Plan, ensure transparency and efficiency.

Pillar 2: Innovative Financing

Innovative mechanisms can bridge funding gaps. Solidarity levies on airline tickets and imports, inspired by UNITAID and ECOWAS, could generate USD 500-700 million and USD 700 million annually, respectively. Targeted taxes on mobile phones, alcohol, and tobacco, considering Africa’s 615 million mobile users by 2025, could also raise significant funds. Expanding community health insurance, as demonstrated by Rwanda’s Mutuelles de Santé, reduces out-of-pocket expenditures and improves access to care.

Pillar 3: Blended Financing and Private Sector Engagement

Blended finance combines public and private resources to address critical infrastructure gaps. This approach can support electrification of health centers, enhance supply chains, and boost local manufacturing. Africa’s health market, projected to reach USD 259 billion by 2030, offers substantial opportunities. Risk mitigation tools like loan guarantees can attract private investment, ensuring sustainable health security.

Strong Governance as a Foundation

Effective governance underpins all financing strategies, ensuring optimal resource use and combating corruption. Aligning over 60% of donor funding with national systems, rather than bypassing them, strengthens country ownership and sustainability.

Implementation and Challenges

The Africa CDC proposes a two-phase strategy. Phase 1 focuses on updating health plans in 30 countries by 2026 and piloting innovative financing. Phase 2 aims to scale these efforts, targeting 50% domestic financing in at least 20 countries by 2030. Challenges such as political resistance to new taxes and limited private sector engagement require mitigation through public awareness and de-risking mechanisms.

Conclusion

African health financing requires a strategic shift to build resilient, self-reliant health systems. The three-pillar approach, supported by strong governance, offers a pathway to sustainability. Decision-makers must prioritize political will and regional solidarity to safeguard health outcomes and ensure a healthier future for Africa.

For further insights and to track progress, engage with Africa CDC’s publication linked below. Join the conversation and contribute to shaping Africa’s health financing future.

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