The Future of Health Financing in Africa: A Wake-Up Call (Part 1)

PS: This post was originally written on the Digital Health Africa platform on LinkedIn

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The recent decision by the U.S. government to freeze and potentially dismantle the United States Agency for International Development (USAID) has sent shockwaves across African nations. This move stems from shifting U.S. foreign policy priorities, debates over aid effectiveness, and domestic budgetary considerations. The reduction or elimination of USAID funding is expected to have far-reaching consequences, particularly in African countries heavily reliant on external assistance for healthcare and economic stability. This abrupt withdrawal of aid threatens to destabilize economies, cripple health systems, and undermine the efforts of countless non-governmental organizations (NGOs) that provide essential services. While this development is undoubtedly alarming, it also presents a crucial opportunity for African nations to rethink their approach to health financing and forge a path toward self-sufficiency.

The Dire Consequences of Aid Withdrawal

For years, many African countries have relied heavily on foreign aid to sustain their healthcare systems. Take Malawi, for example, where U.S. assistance accounts for 13% of its national budget and over half of its healthcare funding (World Bank, 2022). The immediate repercussions of USAID’s suspension include shortages of essential medications and disruptions in critical health services. These gaps will not only lead to increased mortality rates but will also place immense strain on already fragile economies.

The impact extends beyond national governments to grassroots health initiatives. In South Sudan, halted food deliveries and shuttered health facilities have resulted in widespread malnutrition, further exacerbating an already dire humanitarian crisis (UNICEF, 2023). NGOs, which serve as lifelines for vulnerable populations, now face dwindling resources and uncertain futures. Without a rapid and effective response, millions of lives are at stake.

Rethinking Health Financing: The Case for Public-Private Partnerships

This crisis lays bare the urgent need for African nations to reduce their dependence on foreign aid and seek sustainable alternatives. However, this transition presents significant challenges, including the need for substantial investment in healthcare infrastructure, training healthcare professionals, and establishing efficient revenue-generation mechanisms. Many governments also face bureaucratic and political hurdles that slow down reform efforts, making the shift toward self-sufficiency a complex and demanding process. One such solution lies in strengthening public-private partnerships (PPPs). By leveraging the financial, technological, and human resources of the private sector, governments can create more resilient health systems that are less vulnerable to external funding fluctuations.

The success of PPPs is not just theoretical. In Kisumu County, Kenya, a strategic public-private collaboration during the COVID-19 pandemic enabled the efficient mobilization of resources and enhanced the region’s healthcare response (Shannen van Duijn et al., 2023). This model demonstrates that by integrating private sector expertise into public health initiatives, governments can drive innovation and ensure the continuity of essential services.

Moreover, a 2019 briefing paper from the IFC Public-Private Partnership Think Tank highlighted the critical role of private investment in building sustainable health infrastructure (IFC, 2019). For example, Rwanda has successfully implemented PPPs in healthcare by partnering with private firms to expand hospital facilities and improve service delivery. Similarly, Nigeria's partnership with the private sector in developing the Lagos University Teaching Hospital has led to enhanced medical infrastructure and access to quality healthcare. These cases demonstrate how targeted investments can significantly strengthen health systems. When governments actively engage with private stakeholders, they open the door to innovative financing models prioritising long-term health security over short-term aid dependency.

Air-Travel: A Plausible Solution for Healthcare Financing

Over the years, UNITAID has pioneered innovative financing mechanisms by leveraging both public and private funding sources to finance critical health interventions. One of its flagship approaches is the Voluntary Solidarity Contribution (VSC), which allows individuals to opt in and donate while making purchases, particularly during international travel (The Voluntary Solidarity Contribution on travel products (VSC), n.d.). The funds received are then directed towards the management and treatment of communicable diseases such as malaria and HIV/AIDS. 

The VSC complements the air tax levy, where select countries have agreed to earmark a portion of airline ticket fees to support health programs. The levy is described as dependable and robust, given assured air travel globally and varies depending on the class of travel, ensuring a fair contribution model (Unitaid, 2017b). This initiative has had a significant impact—funding from a single ticket can provide life-saving HIV treatment for up to 60 patients for an entire year.

Air travel can offer a sustainable health financing solution

By adopting such sustainable financing models within the African region, African nations can reduce dependency on foreign aid while ensuring continuous funding for essential health services like HIV and malaria treatment.

A Defining Moment for Africa

The withdrawal of U.S. aid serves as a stark reminder of the perils of overreliance on external support. However, it is also important to acknowledge that in certain contexts, foreign aid remains crucial for addressing immediate health crises, supporting vulnerable populations, and complementing domestic efforts. In regions where governments lack the necessary resources or infrastructure to provide adequate healthcare, strategic foreign assistance can play a vital role in bridging gaps and ensuring the delivery of essential services. However, rather than viewing this crisis as a setback, African nations must seize this moment as an opportunity to redefine their health financing strategies. By fostering self-sufficiency through well-structured public-private collaborations, they can create robust health systems that serve their populations effectively and sustainably.

Now is the time for African leaders to act decisively. The health and well-being of millions depend on it. The future of Africa’s healthcare should not be dictated by the shifting tides of foreign policy but rather by proactive and innovative solutions that ensure long-term stability. The time for action is now.

References

IFC. (2019). Public-Private Partnership Think Tank Briefing Paper.

Shannen van Duijn et al. (2023). Public-Private Partnerships in Kisumu County.

UNICEF. (2023). Malnutrition in South Sudan.

World Bank. (2022). Malawi Health Budget Report.

The Voluntary Solidarity Contribution on travel products (VSC) [Internet]. [cited 2025 Feb 16]. Available from: https://www.uhc2030.org/fileadmin/uploads/ihp/Documents/Results___Evidence/HAE__results___lessons/Taskforce%20factsheet_-_voluntary_solidarity_contribution_on_travel_products_EN.pdf?

French levy on airline tickets raises more than one billion euros for world’s poor since 2006 - Unitaid [Internet]. Unitaid. 2017 [cited 2025 Feb 16]. Available from: https://unitaid.org/news-blog/french-levy-on-airline-tickets-raises-more-than-one-billion-euros-for-worlds-poor-since-2006/?