Crisis looms as health budget faces Sh67b cut
National
By
Irene Githinji
| May 15, 2025
Implementation of key health functions is at risk due to a budget shortfall of Sh67.2 billion in the 2025/26 financial year, unless additional funding is secured.
Crucial areas affected by underfunding include persistent salary deficits in Semi-Autonomous Government Agencies (SAGAs), presidential directive projects, Managed Equipment Services, human vaccines production, and the provision of essential medical commodities for strategic health programmes, such as HIV/Aids, family planning, and routine immunisations.
Appearing before the National Assembly Committee on Health, chaired by Dr James Nyikal, the Principal Secretary in the Department of Medical Services, Dr Ouma Oluga, stated that the department requires a total of Sh426.8 billion for the 2025/26 financial year-Sh350.6 billion for recurrent expenditure and Sh76.2 billion for development.
However, under the 2025 Budget Policy Statement, the State Department was allocated Sh172.6 billion (Sh145.1 billion recurrent and Sh27.5 billion development). The latest annual estimates propose a reduced allocation of just Sh105.4 billion-Sh84.5 billion recurrent and Sh20.9 billion development-leaving a shortfall of Sh67.2 billion.
Dr Oluga noted that this significant deviation from the Budget Policy Statement ceiling threatens the continuity of vital health services. Additionally, the department is grappling with pending bills amounting to approximately Sh3.8 billion, which may be carried forward into the next financial year.
He explained that although the proposed budget includes funding for key health interventions, several critical areas remain unfunded or severely underfunded, posing a risk to service delivery. For operations and maintenance alone, the department requires Sh500 million for monitoring ongoing projects and programmes.
Furthermore, implementation of the Social Health Insurance Fund (SHIF) under the Social Health Insurance Act 2023 requires Sh145 billion.
These funds are essential for scaling up the SHIF, the Primary Health Care Act 2023, and the Digital Health Act 2023. Dr Oluga explained that these three laws establish the Primary Health Care Fund and the Emergency, Chronic, and Critical Illness Fund.
Regarding medical commodities, Dr Oluga said Sh4.27 billion is needed for vaccines in 2025/26. This includes Sh2 billion for traditional vaccines, Sh1.69 billion as mandatory GAVI, the Vaccine Alliance co-financing, and Sh585 million for the Vaccine Independence Initiative through the United Nations Children's Fund.
On family planning, Sh2.88 billion is required to supply commodities as part of a strategic population management approach. For HIV commodities, Sh33.9 billion is needed, especially in light of reduced donor funding. He also requested an additional Sh3 billion to clear pending bills for Community Health Promoters' kits, noting that only Sh375 million was allocated against a requirement of Sh4 billion.
Health Cabinet Secretary Aden Duale affirmed to the committee that the position of Director General of Health is enshrined in the Health Act 2017.
Addressing concerns over the role being marginalised, Duale said: "Some believe the DG has no role. That is false. Everyone in the ministry has a defined mandate."