A Health Financing Reform Handbook for African Union Member States.
Executive Summary
Introduction
Africa’s health-financing landscape has entered a decisive transition. After two decades of progress supported by expanding development assistance for health (DAH) and disease-specific programmes, the continent now faces a convergence of fiscal pressures that threaten the sustainability of health systems and recent gains in coverage and outcomes. Declining external assistance, moderate economic growth, rising public debt, rapid population growth, and a shifting disease burden are fundamentally reshaping the financing environment. Without structural reform, African health systems risk becoming increasingly fragile, inequitable, and exposed to shocks.
The scale of the challenge
Africa bears approximately 22 % of the global burden of disease, yet accounts for 1 % of global health expenditure. Average total health expenditure per capita on the continent remains low, at US$85, with fewer than 40 % of African countries meeting the WHO-recommended minimum of US$86 per capita required to deliver an essential package of health services. While total health spending is projected to grow steadily—from about US$110 billion in 2023 to US$260 billion by 2050—rapid population growth will significantly dampen per-capita gains. Africa’s population will grow from 1.4 billion in 2025 to 2.5 billion in 2050.
The composition of health financing further compounds these challenges. Across Africa, government sources account for 35 % of total health expenditure, external assistance about 23 %, and out-of-pocket (OOP) payments, 35 %, with wide variation across countries and sub-regions. In many low- and lower-middle-income countries, reliance on OOP spending ranges between 40–60 %, exposing households to catastrophic health expenditures and pushing an estimated 15 million people into poverty each year.
At the same time, after peaking during the COVID-19 response, total development assistance for health for Africa has entered a sustained decline. From a high of US$25.8 billion in 2021, DAH fell to US$19.9 billion in 2022 and further to around US$13 billion in 2025, driven largely by sharp reductions in U.S. and European funding. Projections indicate that total development assistance for health will remain flat or decline further in real terms. As countries transition out of eligibility for concessional and disease-specific programmes, essential services once fully subsidised are increasingly shifting onto domestic budgets and households.
