President William Ruto has secured a historic KES 207 billion ($1.6 billion) health investment from the United States, marking a pivotal shift in how Kenya's healthcare programmes are funded and managed. The five-year deal, signed in Washington D.C. on Thursday, makes Kenya the first African nation to enter into a direct government-to-government health funding arrangement under the Trump administration's new foreign aid strategy.

This agreement fundamentally alters decades of practice by channeling funds directly through Kenyan government systems, bypassing the third-party NGOs that traditionally managed such aid. The move is designed to anchor the newly launched Social Health Authority (SHA), the successor to the National Health Insurance Fund (NHIF), and accelerate Kenya's push towards Universal Health Coverage (UHC).

A New Funding Model

The partnership represents a significant change in U.S. foreign policy, following the Trump administration's decision to dismantle the U.S. Agency for International Development (USAID) and pursue bilateral deals. U.S. Secretary of State Marco Rubio, who signed the agreement with Prime Cabinet Secretary Musalia Mudavadi, emphasized that the new model aims to eliminate inefficiency and dependency from foreign assistance. President Ruto expressed his gratitude to President Donald Trump, stating the decision reflects "growing confidence in the strength, sustainability, and reform momentum of our healthcare systems."

Under the terms of the framework, the funds will be directed to key state institutions, including:

• The Social Health Authority (SHA)
• Kenya Medical Supplies Authority (KEMSA)
• The National Public Health Institute
• Ministry of Health and its financial management systems

The investment will primarily target the elimination of HIV/AIDS, tuberculosis, and malaria, while also bolstering maternal and child health, polio eradication, and disease outbreak preparedness.

Implications for the Kenyan Household

The establishment of the Social Health Authority is the government's most ambitious healthcare reform, replacing the 58-year-old NHIF. The new system, which officially began operations in October 2024, aims to provide more inclusive and comprehensive coverage for all citizens, including those in the informal sector who were often left out of the previous scheme. President Ruto has emphasized that the SHA model is designed for all Kenyans, not just the formally employed, and has pledged government support for 1.5 million vulnerable citizens who cannot afford the contributions.

The SHA is structured around three distinct funds:

• The Primary Healthcare Fund: Covers services at local dispensaries and health centres (Levels 2 and 3), which are now free for all citizens.
• The Social Health Insurance Fund: Financed by mandatory public contributions of 2.75% of gross salary, this fund covers general inpatient and outpatient services.
• The Emergency, Chronic and Critical Illness Fund: A government-financed pool to manage costly treatments for conditions like cancer, as well as emergency and critical care.

While the transition has seen millions register, challenges in implementation remain, including ensuring timely payments to healthcare providers to avoid disruptions in service.

The Path to Self-Reliance

This direct funding model is a cornerstone of the Trump administration's "America First Global Health Strategy," which requires partner nations to increase their own financial commitments. Alongside the $1.6 billion from the U.S., Kenya has pledged to contribute an additional $850 million (approx. KES 110 billion) over the five-year period, with a goal of gradually taking over full financial responsibility for its health programs. President Ruto assured that every shilling will be spent accountably to build a sustainable healthcare system. "This transformative framework prioritises the supply of modern medical equipment to our hospitals, the efficient and timely delivery of essential health commodities... and the expansion of health insurance to ensure that every Kenyan is protected," he noted.