Uganda’s health sector is grappling with a massive financial shortfall after President Donald Trump’s January 2025 decision to halt foreign aid from the United States, with the Ministry of Health requesting Shs503.263 billion in additional funding to mitigate the impact of the abrupt withdrawal of USAID support. This funding request is part of a larger Shs8.104 trillion supplementary budget approved by Parliament on December 2, 2025, as the government seeks to plug critical gaps in health financing.
The abrupt stoppage of USAID support has left a significant void, particularly in essential areas such as laboratory operations, health management information systems, WASH (Water, Sanitation, and Hygiene) interventions, and the control of neglected tropical diseases. According to documents presented to Parliament, the Ministry of Health initially needed Shs17.95 billion to cover the immediate gaps caused by the freeze in U.S. funding. The government now faces an uphill battle to stabilize its health sector, with Uganda’s total national budget rising from Shs72.376 trillion to Shs78.631 trillion, partly funded by external loans and domestic borrowing.
The health financing crisis has further exacerbated Uganda’s long-standing struggles with health sector underfunding. To prevent critical shortages of medicines and avert health emergencies, Parliament approved an additional Shs69.693 billion for the Ministry of Health. The money will help tackle the immediate risk of drug stockouts, which could have dire consequences on public health. National Medical Stores, which supplies medical commodities across the country, was one of the largest beneficiaries of the supplementary funding, receiving Shs115.76 billion to support wages, medical supplies, and operational needs, including for the newly completed UPDF Referral Hospital in Mbuya.
Another significant allocation was directed to the Uganda Heart Institute, which secured Shs40.047 billion to continue civil works for the long-delayed Naguru facility. Despite previous loans of $73 million (Shs255.372 billion) from international lenders such as BADEA, the OPEC Fund, and the Saudi Fund, progress has been slow due to insufficient funds for power installation and mismatched project timelines. Additionally, Shs10 billion was earmarked to revive the National Ambulance System, as many ambulances across the country have been grounded due to fuel shortages and mechanical failures.
The total Shs503.263 billion allocated by Parliament offers only a temporary solution to the crisis. The Ministry of Health had previously warned that the freeze on USAID funding, coupled with chronic underfunding, has left the sector facing an estimated Shs1.776 trillion shortfall. This deficit threatens to undo years of progress made in the country’s health sector, including in the fight against infectious diseases, maternal and child health, and public health infrastructure.
In response to this crisis, Uganda now faces the urgent challenge of stabilizing its health services while seeking alternative funding sources and managing the long-term consequences of losing one of its most significant development partners. The sudden withdrawal of USAID funding, which had supported a wide range of health initiatives in the country, is expected to have far-reaching effects, particularly in rural areas where health services are most vulnerable.
Uganda’s government has acknowledged the gravity of the situation and is exploring avenues for external financial support, including loans from international financial institutions and new partnerships to bridge the growing funding gap. The strain on the health sector is not just a financial challenge but a pressing issue of equity, as the loss of support could disproportionately affect the most underserved populations in Uganda. The need for long-term, sustainable solutions to health financing has never been more urgent.
