The country’s health sector is buckling under a major drop in donor support, with external (donor) funding for the national health budget declining from the high of 49 percent in 2022 to just 23 percent this year. The revelation is contained in a joint report by the Uganda National NGO Forum and the Centre for Health, Human Rights and Development (CEHURD), released yesterday in Kampala. The report indicates that this sharp decline, by more than half within four years, amid insufficient increases in domestic resource allocation to plug the gaps and increasing health needs, has exposed deep structural vulnerabilities, eroded service quality, and left many vulnerable Ugandans struggling to access essential care.
The sector has been heavily relying on donors to provide services to Ugandans. In 2022, the domestic funding towards the health sector was at Shs2.4 trillion, while external (donor) funding was at Shs2.3 trillion. But in 2025, the domestic funding is estimated at Shs4.4 trillion while external funding has declined to Shs1.3 trillion. ‘The reduction in external financing (on-budget) has exposed various systemic risks with immediate disruptions to HIV/Aids [services], maternal health, and essential medicines,’ said Mr Richard Muganzi, the director of programmes at CEHURD, while presenting the report.
‘The limited sources of domestic financing have negative effects on service quality, continuity, and progress toward the Abuja target (of allocating 15 percent of the national budget to the health sector),’ he added. Mr Muganzi also observed the effects of shrinking donor support on the support supervision and accountability drive, signalling poor transition interventions. ‘Many differentiated health service delivery programmes and community-based initiatives have been phased out or scaled down amid shortages in drug supplies, staff attrition, and reduced outreach activities in hard-to-reach areas and among vulnerable groups,’ he said.
The major staff attrition followed the recent abolition of the United States Agency for International Development (USAID), which was employing health workers to supplement government efforts in health facilities and community-based programmes, according to doctors. As a result, the report shows, there is increased demotivation and increased workload for staff employed by the government, limited access to HIV treatment and prevention services. The report further shows weak support mechanisms for local implementers and reduced availability of sexual and reproductive health services and gender-based violence interventions.
According to the report, the allocation of the total national budget to the health sector in Uganda has remained significantly low at around 6 percent compared to other countries in the region. Rwanda allocates around 13.5 percent of its budget to health, Tanzania (9.2 percent), Kenya (11 percent), and Ethiopia (7.2 percent), according to the report. The report states that significant debt burden is also limiting the government’s capacity to fund health services, as around 27 percent of the budget is for debt servicing.
Ministry of Health speaks
But Dr Charles Olaro, the director general of health services at the Ministry of Health, said the government is committed to plugging the gaps created by the withdrawal of donors like USAID and the general decline in funding. ‘I am happy to report that the quantified gap of over Shs400b that was left by the US executive orders, especially in the area of HIV/Aids, will be filled by the GoU [Government of Uganda] budget beginning this financial year,’ he said.
‘In addition, at the national health financing dialogue held in May, we committed to ensuring more health funding by being efficient as we pursue more money for health. There is now a greater focus on investing in prevention and community-level services (PHC),’ he said. He added that they are doing more with what is at hand through implementing service integration approaches at all levels to save resources. ‘Uganda, like many other low and middle-income countries that rely heavily on foreign aid, has been affected by the abrupt cuts seen in recent months. It is estimated that external financing will reduce to the tune of 25 to 50 percent in the short to medium term,’ he added.
Dr Olaro also said the domestic financing has been rising over time. ‘I would like to note that the government has made significant allocations to the health sector in the last five years of Shs2.788 trillion in the 2020/2021 financial year to Shs4.486 trillion in 2024/2025 financial year,’ he said. ‘This has had positive effects on the total health expenditure as well. For instance, government health expenditure as a percentage of current health expenditure increased from 15 percent 2018/2019 financial year to 21 percent in the 2020/2021 financial year,’ he added.
Recommendation
Key recommendations from the report and in the panel discussion during the dissemination included strengthening domestic resource mobilisation, enhancing public-private partnerships, improving accountability, investing in primary healthcare, and maintaining partnerships. Specifically in the report, the two organisations said the country should, within one to two years, expand sin taxes, improve budget execution, set up a transparency dashboard, pilot the district National Health Insurance Scheme (NHIS) design, and secure donor bridge funding.
For the medium-term (three to five years), they advised the country to formalise NHIS pilots; roll-out pooled procurement changes; enact some legal and administrative changes to allow earmarks; begin with motor-insurance and mobile levy pilots. In the long-term (five to 15 years), the country should scale NHIS nationally with indigent subsidies; operationalise a National Solidarity Fund; effect performance-based purchasing and explore vital finance.
‘Building a diversified, predictable, and equitable financing system is essential for universal health coverage. Uganda’s health financing system is at a crossroads requiring effective implementation of reforms,’ the report reads. ‘Donor dependency and fiscal constraints risk reversing health gains. There is need for political will, predictable funding, and equitable service delivery,’ the report reads further.
What officials said
Dr Moses Isooba, executive director of Uganda NGO Forum, said: ‘Development partners’ financing is going to continue to decrease, so our government needs to invest quite substantially in public services like health. Our collective commitment needs to ensure that our investment in health leads to measurable improvement in equity, quality, and access.’ Mr Patrick Mwanja, commissioner of Infrastructure and Social Services Department of Ministry of Finance, said:
‘We have seen the human capital development (which encompasses the health sector) receiving the largest parts of the budget, around Shs11.4 trillion, up from Shs10 trillion in the last financial year, showing growth of 9.6 percent. In the health sub-programme, since 2021, we have seen growth from Shs2.1 trillion to Shs5.5 trillion , and are contributing eight percent of the national budget and an annual growth of about 9.6 percent. So the government is committed to increasing financing. Our focus has been on increasing infrastructure for the health centres, district hospitals, and referral hospitals. But the challenges remain in operationalising these facilities.’
Ms Ruth Ajalo, the head of the strategic litigation programme at CEHURD said: ‘The era of abundant donor funding is shifting, and with it comes an urgent need for innovation, efficiency, and sustainability within our own systems.’ Ms Christabel Abewe, a health financing officer at WHO Uganda Country Office, said: ‘As you know, we’ve been heavily relying on external aid, at least for Uganda.
50 percent of our total expenditure has been from external support. But what we are seeing now is tighter fiscal space from the countries that used to donate to us. And what that means is that they don’t have too much to give to countries like Uganda anymore.’ Mr Julius Mukunda, the executive director of CSBAG Uganda, said : ‘In Uganda, the problem is, people think there is no money. The problem is, we don’t know how to use the money.’
External funding.
The reduction in external financing (on budget) has exposed various systemic risks with immediate disruptions to HIV/Aids [services], maternal health, and essential medicines- Mr Richard Muganzi, the director of programmes at CEHURD.