Health: USAID out, in comes government to government deal

Kenya’s healthcare system suffered a major blow after US President Donald Trump froze foreign aid early this year, immediately after assuming office. 

The stop-work order created a funding gap of Sh30.9 billion, severely disrupting health programmes that heavily rely on donor support. 

In response, the Kenyan government entered a five-year cooperation framework worth $2.5 billion (Sh325 billion) with the US, aimed at saving lives and strengthening the country’s health system. 

Under the agreement, America will contribute $1.6 billion (Sh207 billion), while Kenya is expected to provide $850 million (Sh110 billion) in co-financing. 

The National Empowerment Network of People Living with HIV/Aids in Kenya (Nephak) has welcomed the deal, describing it as the most significant health agreement ever signed between the two countries. 

“With a signed agreement, you do not wake up one morning and leave, the way Trump did during the stop-work order,” notes Nephak executive director Nelson Otwoma. 

The freeze on foreign aid, largely through the US Agency for International Development (USAID), caused major setbacks in HIV/AIDS, malaria and tuberculosis (TB) programmes. 

Other US supported initiatives including the President’s Emergency Plan for Aids Relief (PEPFAR), the Presidential Malaria Initiative (PMI), and programmes run through the Department of Defense and the Centers for Disease Control and Prevention (CDC) were also interrupted. 

Medicine stock-outs, service interruptions, and staff shortages followed, leaving thousands of patients stranded. 

Babies born to HIV positive mothers reportedly missed crucial doses of nevirapine syrup - a lifesaving drug that prevents HIV transmission during breastfeeding. 

Stock-outs of antiretroviral drugs (ARVs) were also reported in several counties, raising fears of treatment interruptions that could trigger drug resistance. 

At the height of the crisis, health facilities reported running out of essential commodities, including cotrimoxazole, a key drug used to prevent opportunistic infections in people living with HIV, and HIV test kits. 

Provision of Pre-Exposure Prophylaxis (PrEP), a drug that helps prevent HIV was also limited to only pregnant and breastfeeding women under a limited waiver from the Global Health Security and Diplomacy office. 

Through US funding, Kenya has made notable progress in reducing new HIV infections by more than 67 per cent, from 101,000 cases in 2010 to approximately 19,900 in 2024.  

Currently, an estimated 1.3 million Kenyans are living with HIV, with 1.2 million on treatment. 

Dismissal of 41,547 health workers, previously employed under the PEPFAR, who were fetching a salary of Sh17.4 billion left thousands of people living with HIV without adequate care. 

Most of the dismissed employees were front line workers dedicated to serving HIV and TB patients, providing essential treatment and support. 

Prior to the freeze on foreign aid, people living with HIV were attended to a Comprehensive Care Clinics (CCC), which provided HIV testing, anti-retroviral drugs (ARV) distribution, viral load testing and counselling services. 

Referral mechanism 

These clinics have since closed as Kenya’s Ministry of Health and county governments integrate services into outpatient departments. 

TB was also among highly affected programmes. For instance, last year, TB cases among children under 15 years rose from 12 per cent in 2023 to 13 per cent. 

The stop-work order disrupted sample referral mechanism targeting patients with Drug Resistance TB. 

Sample network collection was also disrupted in the country, as the activity was funded by the US government. 

Investigations by The Standard revealed some facilities are reported to discard sputum samples collected for tests due to lack of transport. 

With the now Government to Government (G2G) funding model recently signed by the two countries, the government is looking for sustainability of its health programmes without interruptions. 

Appearing before Spice FM, Principal Secretary for Medical Services Dr Ouma Oluga said the deal is the biggest health cooperation agreement Kenya has ever secured from the US government. 

Areas of corporation between US and Kenya include surveillance and outbreak response, laboratory systems, commodities, data systems and technical assistance. 

With donor support declining globally, the PS is optimistic as the framework ensures continuity and reduces the risk of abrupt disruptions such as the stop-work order. 

“Where we are coming from is dwindling donor support. What we have done with the US is to avoid a situation where support stops abruptly. Instead, we have agreed on a five-year framework,” said Dr Oluga. 

But experts and stakeholders observed the signing was hurriedly done. 

Beatrice Kairu, a health economist and public policy expert observes that Kenya entered negotiation table from a point of weakness. 

“The US departure created a funding vacuum that needed filling. Yet instead of a carefully phased transition with clear safeguards, Kenya agreed to a costly co-financing schedule, commingling operational obligations with contentious data clauses that merit public scrutiny,” says Kairu. 

Ethical risks 

Without proper negotiation, Kairu says Kenya risks trading one dependency for another aid, leaving citizens to pay the price. 

“Now, with a new G2G deal worth roughly $1.6 billion over five years, and a domestic co-financing pledge of $850 million, the promise of transformation masks serious economic and ethical risks,” she observes. 

The core idea behind the new G2G model, according Kairu, is to channel funds directly into Kenyan government systems, through the Ministry of Health, Kenya Medical Supplies Authority (KEMSA), Social Health Authority (SHA) and other government agencies, rather than through international Non-Governmental Organisations (NGOs). 

Proponents argue that the G2G funding model fosters national ownership and strengthens accountability. 

However, according to Kairu, transitioning billions from independent implementing partners into government systems is fraught, as Kenya’s public institutions, which are already stretched, must absorb payroll costs for health workers, logistics, procurement, monitoring, and reporting. 

Data controversy 

Additionally with finite fiscal space, the promise of $850 million in co-financing requires Kenya to re-prioritise its health budget at a time of competing demands. 

On data sharing signed in the bilateral agreement, the expert says while financial and operational concerns are critical, an equally important risk lies in data governance. 

Civil society groups have taken the government to court, arguing that the health pact permits the transfer, sharing, or dissemination of sensitive personal and medical data beyond what Kenya’s Constitution and Data Protection Act allow. 

The High Court temporarily halted implementation of clauses involving data exchange, pending legal review. 

Petitioners argue the agreement was negotiated without public input and could expose Kenyans to privacy violations and misuse of information, particularly for diseases like HIV that carry social prejudice. 

But Dr Oluga assured that data shared is not patient-based and would not identify individuals. 

“This is aggregate data. It is de-identified data that is going to be shared,” said PS while appearing before Spice FM.