GFO Issue 463, Article Number: 6
ABSTRACT
At the 78th World Health Assembly, Africa's leaders charted a new course for health financing with the event entitled: "The Future of Domestic Financing for Health is Now: Africa’s Pathway to Sustainable Health Systems." Initiated by the Nigeria’s Federal Ministry of Health & Social Welfare and the Global Fund, the dialogue centered on transitioning from donor reliance to self-sustaining health systems. Thanks to the contributions of figures such as Dr. Donald Kaberuka and the proactive strategies of countries like Ethiopia and Zimbabwe, the conference highlighted innovative and inspiring financing solutions.
Introduction
On the margins of the 78th World Health Assembly, a side event titled “The Future of Domestic Financing for Health is Now: Africa’s Pathway to Sustainable Health Systems” was held on 22 May 2025. This high-level gathering was organized through the initiative of the Nigeria Federal Ministry of Health & Social Welfare and the Global Fund, and co-hosted by AU Member State governments, the Global Fund, and other partners.
The objective of the meeting was to explore the financial sustainability and effective transition of African health sectors from donor dependence to domestic financing. Discussions focused on strengthening national health financing, managing the impact of donor funding shifts on key health programs, and leveraging regional partnerships to build resilient and sustainable health systems. The ultimate goal: to accelerate Africa’s journey toward financial self-reliance in health.
In recent years, global health funding cuts have placed significant pressure on African countries to achieve financial independence in healthcare. Many nations face this challenge while simultaneously addressing high burdens of infectious diseases and rising rates of non-communicable conditions. In response, countries have begun implementing ambitious reforms. Nigeria, for example, has committed $1.07 billion to health reforms and the expansion of HIV treatment. Zimbabwe, in turn, has funded its HIV programs through a 3% income levy.
During the AU Summit, held alongside the 38th Ordinary Session of the Assembly of Heads of State and Government of the African Union in Addis Ababa (February 2025), President Paul Kagame urged African leaders to develop collaborative health financing solutions grounded in the principle of self-reliance. The event in Geneva thus represents a tangible step toward realizing the political will to achieve innovative and intentional financial independence in health.
"The Time for analysis is over"
Opening the session with characteristic candor, Dr. Donald Kaberuka - former President of the African Development Bank and former Global Fund Board Member - offered a blunt assessment: "We’ve spent too much time analyzing a problem we should have addressed years ago. External aid was never meant to be permanent, yet 25 years of reliance delayed the necessary planning for an inevitable transition."
He criticized the tendency to lament donor decisions, highlighting that Western nations are reprioritizing their budgets under geopolitical pressure. "The U.S. and Europe are cutting aid to boost defense spending. That’s their choice. Ours is to act."
Dr. Kaberuka pointed to Nigeria as a case in point: "With $25 billion in annual revenue (7% of GDP), Nigeria could double its health spending if it improved tax collection efficiency and ensured equitable budget allocation." He issued a clear challenge to African leaders: "The list of solutions is long. We must focus on implementation, not excuses."
In closing, he called for an end to “analysis paralysis” and emphasized the need for tangible action over rhetoric or regret.
Ethiopia's response to global health financing shifts
Ethiopia illustrates the difficult transition many countries face as donor support shifts from system strengthening toward commodity-based aid. Dr. Mulukem Argaw Haile, Executive Officer for Strategic Affairs at Ethiopia’s Ministry of Health, acknowledged the challenges this poses, particularly under tight budget constraints.
In response, Ethiopia has adopted a multipronged strategy. First, the Ministry of Health initiated high-level negotiations with the Ministry of Finance to secure domestic funding for essential health system functions, although replacing lost external support remains a difficult task. Second, Ethiopia is engaging non-traditional donors - including emerging philanthropic foundations, private institutions, and high-net-worth individuals - using a matching-fund model to maximize resource mobilization.
Additionally, the government is enhancing its Community-Based Health Insurance (CBHI) scheme, which currently covers over 13 million households. A shift from a flat-rate contribution to a sliding-scale model is intended to increase revenue while maintaining affordability for enrollees.
Nevertheless, challenges persist. The sudden nature of donor cuts has forced the government to reassess service delivery priorities and determine which health interventions can be maintained under constrained fiscal conditions. Authorities also recognize that both the willingness and capacity of citizens to pay limit the potential for increased revenue through insurance schemes.
Despite these difficulties, Ethiopia’s strategy - combining domestic budget advocacy, engagement with new donors, and insurance reform - reflects a proactive approach to a shifting global financing environment. The emphasis remains on sustaining essential health services while gradually reducing dependence on external aid.
Zimbabwe’s innovative health financing strategy
Zimbabwe has emerged as a notable example of how domestic resources can be mobilized to compensate for dwindling donor support. As explained by Hon. Professor Mthuli Ncube, Minister of Finance and Economic Development, Zimbabwe has implemented a layered and targeted approach to health financing.
At the core of this model is the long-established 3% AIDS levy on personal and corporate income, which has supported HIV/AIDS programs for over two decades. In anticipation of further donor reductions, Zimbabwe expanded its financing mechanisms through targeted “sin taxes” on cigarettes, alcohol, and sugar-sweetened beverages. Revenues from these taxes are earmarked specifically for cancer treatment equipment and diagnostic services.
Most recently, the government introduced a “fast-food tax” on items such as pizza, fried chicken, and chips, creating another ring-fenced stream of health sector revenue. While these measures have received pushback from businesses, the Ministry of Finance has emphasized transparency by inviting taxed companies to witness firsthand how their contributions are being used to fund health infrastructure and services.
Beyond taxation, Zimbabwe has pursued innovative financing options for infrastructure. The government secured a $200 million loan from South African banks, backed by export credit guarantees, to construct 30 mini-hospitals and six district hospitals. This creative financial structure demonstrates how African nations can tap into regional capital to address critical gaps in health infrastructure.
Complementing these efforts, Zimbabwe has prioritized local pharmaceutical production to reduce dependency on imported medical supplies and enhance the resilience of its health system. As Professor Ncube noted, this integrated approach - combining dedicated taxes, innovative loans, and domestic production - has enabled Zimbabwe to bridge funding gaps and move toward a more sustainable financing model for health.
Conclusion
In his closing remarks, Dr. Kaberuka applauded the determination and pragmatism demonstrated by fellow ministers, describing their strategies as bold and solution-driven. The examples of Nigeria, Ethiopia, and Zimbabwe illustrate that with political will, countries can develop creative financing mechanisms and mobilize domestic resources to address funding shortfalls.
Yet, Dr. Kaberuka also issued a sharp critique of international financial institutions. He argued that current debt sustainability assessments are flawed and disproportionately constrain investment in social and health sectors. "The methodology is wrong," he asserted, whether due to technical or political biases. He called for a fundamental reassessment of these frameworks to allow African countries the fiscal space to prioritize critical health investments.
Quoting President Dwight D. Eisenhower - "Plans are worthless, but planning is indispensable" - Dr. Kaberuka emphasized that adaptability is now essential. Long-term vision must be complemented by agile execution in a volatile global context. He urged ministers to establish robust budget implementation committees to ensure that allocated funds deliver real, measurable outcomes.
"The world is constantly changing," he concluded, "but our commitment to health financing must remain firm." His final message was unmistakable: Africa must champion homegrown solutions, challenge restrictive global frameworks, and remain relentlessly focused on delivering health outcomes for its people.
The time for rhetoric is over. The era of action has begun.
Introduction
On the margins of the 78th World Health Assembly, a side event titled “The Future of Domestic Financing for Health is Now: Africa’s Pathway to Sustainable Health Systems” was held on 22 May 2025. This high-level gathering was organized through the initiative of the Nigeria Federal Ministry of Health & Social Welfare and the Global Fund, and co-hosted by AU Member State governments, the Global Fund, and other partners.
The objective of the meeting was to explore the financial sustainability and effective transition of African health sectors from donor dependence to domestic financing. Discussions focused on strengthening national health financing, managing the impact of donor funding shifts on key health programs, and leveraging regional partnerships to build resilient and sustainable health systems. The ultimate goal: to accelerate Africa’s journey toward financial self-reliance in health.
In recent years, global health funding cuts have placed significant pressure on African countries to achieve financial independence in healthcare. Many nations face this challenge while simultaneously addressing high burdens of infectious diseases and rising rates of non-communicable conditions. In response, countries have begun implementing ambitious reforms. Nigeria, for example, has committed $1.07 billion to health reforms and the expansion of HIV treatment. Zimbabwe, in turn, has funded its HIV programs through a 3% income levy.
During the AU Summit, held alongside the 38th Ordinary Session of the Assembly of Heads of State and Government of the African Union in Addis Ababa (February 2025), President Paul Kagame urged African leaders to develop collaborative health financing solutions grounded in the principle of self-reliance. The event in Geneva thus represents a tangible step toward realizing the political will to achieve innovative and intentional financial independence in health.
"The Time for analysis is over"
Opening the session with characteristic candor, Dr. Donald Kaberuka - former President of the African Development Bank and former Global Fund Board Member - offered a blunt assessment: "We’ve spent too much time analyzing a problem we should have addressed years ago. External aid was never meant to be permanent, yet 25 years of reliance delayed the necessary planning for an inevitable transition."
He criticized the tendency to lament donor decisions, highlighting that Western nations are reprioritizing their budgets under geopolitical pressure. "The U.S. and Europe are cutting aid to boost defense spending. That’s their choice. Ours is to act."
Dr. Kaberuka pointed to Nigeria as a case in point: "With $25 billion in annual revenue (7% of GDP), Nigeria could double its health spending if it improved tax collection efficiency and ensured equitable budget allocation." He issued a clear challenge to African leaders: "The list of solutions is long. We must focus on implementation, not excuses."
In closing, he called for an end to “analysis paralysis” and emphasized the need for tangible action over rhetoric or regret.
Ethiopia's response to global health financing shifts
Ethiopia illustrates the difficult transition many countries face as donor support shifts from system strengthening toward commodity-based aid. Dr. Mulukem Argaw Haile, Executive Officer for Strategic Affairs at Ethiopia’s Ministry of Health, acknowledged the challenges this poses, particularly under tight budget constraints.
In response, Ethiopia has adopted a multipronged strategy. First, the Ministry of Health initiated high-level negotiations with the Ministry of Finance to secure domestic funding for essential health system functions, although replacing lost external support remains a difficult task. Second, Ethiopia is engaging non-traditional donors - including emerging philanthropic foundations, private institutions, and high-net-worth individuals - using a matching-fund model to maximize resource mobilization.
Additionally, the government is enhancing its Community-Based Health Insurance (CBHI) scheme, which currently covers over 13 million households. A shift from a flat-rate contribution to a sliding-scale model is intended to increase revenue while maintaining affordability for enrollees.
Nevertheless, challenges persist. The sudden nature of donor cuts has forced the government to reassess service delivery priorities and determine which health interventions can be maintained under constrained fiscal conditions. Authorities also recognize that both the willingness and capacity of citizens to pay limit the potential for increased revenue through insurance schemes.
Despite these difficulties, Ethiopia’s strategy - combining domestic budget advocacy, engagement with new donors, and insurance reform - reflects a proactive approach to a shifting global financing environment. The emphasis remains on sustaining essential health services while gradually reducing dependence on external aid.
Zimbabwe’s innovative health financing strategy
Zimbabwe has emerged as a notable example of how domestic resources can be mobilized to compensate for dwindling donor support. As explained by Hon. Professor Mthuli Ncube, Minister of Finance and Economic Development, Zimbabwe has implemented a layered and targeted approach to health financing.
At the core of this model is the long-established 3% AIDS levy on personal and corporate income, which has supported HIV/AIDS programs for over two decades. In anticipation of further donor reductions, Zimbabwe expanded its financing mechanisms through targeted “sin taxes” on cigarettes, alcohol, and sugar-sweetened beverages. Revenues from these taxes are earmarked specifically for cancer treatment equipment and diagnostic services.
Most recently, the government introduced a “fast-food tax” on items such as pizza, fried chicken, and chips, creating another ring-fenced stream of health sector revenue. While these measures have received pushback from businesses, the Ministry of Finance has emphasized transparency by inviting taxed companies to witness firsthand how their contributions are being used to fund health infrastructure and services.
Beyond taxation, Zimbabwe has pursued innovative financing options for infrastructure. The government secured a $200 million loan from South African banks, backed by export credit guarantees, to construct 30 mini-hospitals and six district hospitals. This creative financial structure demonstrates how African nations can tap into regional capital to address critical gaps in health infrastructure.
Complementing these efforts, Zimbabwe has prioritized local pharmaceutical production to reduce dependency on imported medical supplies and enhance the resilience of its health system. As Professor Ncube noted, this integrated approach - combining dedicated taxes, innovative loans, and domestic production - has enabled Zimbabwe to bridge funding gaps and move toward a more sustainable financing model for health.
Conclusion
In his closing remarks, Dr. Kaberuka applauded the determination and pragmatism demonstrated by fellow ministers, describing their strategies as bold and solution-driven. The examples of Nigeria, Ethiopia, and Zimbabwe illustrate that with political will, countries can develop creative financing mechanisms and mobilize domestic resources to address funding shortfalls.
Yet, Dr. Kaberuka also issued a sharp critique of international financial institutions. He argued that current debt sustainability assessments are flawed and disproportionately constrain investment in social and health sectors. "The methodology is wrong," he asserted, whether due to technical or political biases. He called for a fundamental reassessment of these frameworks to allow African countries the fiscal space to prioritize critical health investments.
Quoting President Dwight D. Eisenhower - "Plans are worthless, but planning is indispensable" - Dr. Kaberuka emphasized that adaptability is now essential. Long-term vision must be complemented by agile execution in a volatile global context. He urged ministers to establish robust budget implementation committees to ensure that allocated funds deliver real, measurable outcomes.
"The world is constantly changing," he concluded, "but our commitment to health financing must remain firm." His final message was unmistakable: Africa must champion homegrown solutions, challenge restrictive global frameworks, and remain relentlessly focused on delivering health outcomes for its people.
The time for rhetoric is over. The era of action has begun.
