US Aid Freeze Triggers UGX 604Bn Health Sector Funding Crisis

By Spy Uganda

Uganda’s health sector faces a major financial crisis following the U.S. government’s decision to cut foreign aid, leading to a funding shortfall of UGX 604 billion. Minister of Health, Dr. Ruth Aceng, has urged Parliament to mobilize resources to ensure the sector’s sustainability and reduce reliance on external funding.

Dr. Aceng made the appeal while appearing before Parliament’s Health Committee, to present the 2025/26 Ministerial Policy Statement for the health sector. She detailed the projects affected by the funding cuts and outlined government interventions to mitigate the impact.

Impact of the US Aid Freeze The U.S. President’s executive order, which took effect on January 20, 2025, led to significant cuts in global foreign aid. As a result, Uganda lost over UGX 604 billion in funding for critical health programs, including:

• HIV/AIDS Program: UGX 243.2 billion lost
• Malaria Control Program: UGX 121 billion lost
• Support for Human Resources for Health: UGX 67.8 billion lost
• Tuberculosis (TB) Program: UGX 60.2 billion lost
• Health Information Systems: UGX 36.9 billion lost
• Healthcare Waste Management: UGX 22.2 billion lost
• Health Laboratory Systems: UGX 35.4 billion lost
• Nutrition Services: UGX 16.5 billion lost
• Neglected Tropical Diseases: UGX 780 million lost

Government Response and Proposed Solutions Dr. Aceng highlighted several measures to address the funding gap, including integrating affected services into routine healthcare, developing a Cabinet paper for policy discussions, and urging Parliament to mobilize alternative funding sources.

She further emphasized the importance of passing the National Health Insurance Scheme Bill, which could generate additional revenue for the health sector. Other proposals included expanding private health insurance, financing private wings at regional referral hospitals, and increasing public awareness on disease prevention.

Lubowa Hospital Project and Budget Concerns Dr. Aceng also updated the committee on the progress of Lubowa Specialized Hospital. As of December 2024, the government had certified works worth US$170.57 million (UGX 62.46 billion), although Parliament records indicate that UGX 774.47 billion has been approved for the project.

The total construction cost, including financing expenses, is estimated at US$379.71 million (UGX 1.39 trillion), with physical progress reported at 45%. In the 2025/26 budget, UGX 1.5 billion has been allocated for supervision of the construction works.

Key developments at Lubowa Hospital include:

• Completion and furnishing of staff hostels and a training school
• Ongoing construction of the hospital complex, with 30% progress
• Expected roofing of the main hospital building by April 2025
• Project completion anticipated by June 2026

Parliament recently approved a UGX 4.255 trillion supplementary budget, including UGX 298 billion for Lubowa Hospital. However, opposition MPs, led by Shadow Minister for Finance Ibrahim Ssemujju, opposed the allocation, demanding an audit to assess previous fund utilization.

Additional Unfunded Priorities Beyond the US aid freeze, Dr. Aceng outlined other critical unfunded needs in the health sector:

• UGX 46 billion for rehabilitating and equipping Masindi, Kabugo, and Itojo General Hospitals
• UGX 5 billion to operationalize the Uganda Organ Donation and Transplant Council
• UGX 8.6 billion for procurement of transformers to stabilize power supply for medical equipment
• UGX 17.6 billion for maintenance of the National Ambulance Call and Dispatch System (UGX 12 billion for fuel and UGX 5.6 billion for servicing)
• UGX 12.8 billion for establishing the National Ambulance Service System
• UGX 54 billion to procure 158 ambulances for constituencies without any
• UGX 12 billion annually for laboratory equipment and reagents to address shortages

With the loss of U.S. funding and several unfunded priorities, Uganda’s health sector is at a crossroads. The Minister’s appeal underscores the urgent need for domestic resource mobilization to ensure sustainability and resilience in healthcare delivery.