The World Bank has raised major concerns about President William Ruto’s key health initiative, the Universal Health Coverage (UHC), and the Social Health Insurance Fund (SHIF), urging the Kenyan government to rethink how the program is being rolled out and funded.
This warning comes as many Kenyans continue to voice concerns over the growing financial burden brought about by the new health scheme.
In a detailed report titled Public Finance Review (PFR) released on May 27, the international financial institution highlighted the potential risks and financial strain associated with the SHIF programme.
The World Bank noted that the current model could place an unfair burden on citizens, especially those already struggling with economic challenges.
According to the report, Kenya’s economy, which is largely driven by informal employment, presents a major challenge to the successful implementation of SHIF.
The bank estimates that SHIF will only be able to generate about Ksh67 billion each year—significantly less than the projected target of Ksh157 billion. This massive shortfall in expected contributions could weaken the programme and make it unsustainable in the long term.
To ease this burden, the World Bank has suggested that the government should consider exempting low-income earners in the formal sector from paying SHIF contributions.
This move, the bank explained, would reduce distortions in the labour market, encourage more jobs to shift into the formal economy, and allow the state to step in and finance healthcare for poor households, informal workers, and low-wage formal employees directly through the national budget.
In addition to this, the World Bank is calling for full funding of other key healthcare initiatives such as the Primary Health Care Fund (PHCF) and the Emergency, Chronic and Critical Illness Fund (ECCIF).
These programs are becoming even more important due to the fast withdrawal of donor support that previously helped fund Kenya’s healthcare system.
The report stresses the need to continue funding important health programs that have been supported by international partners like the United States and Gavi, the Vaccine Alliance.
Immunisation campaigns and other public health services, the report says, must not be disrupted as donor support declines.
Moreover, the World Bank recommends that the SHIF should mainly focus on collecting funds from workers in the formal sector, while the government should offer direct subsidies to cover the contributions for informal workers and other vulnerable groups.
This, the bank argues, will help ensure fair and equal access to quality healthcare services for all Kenyans, regardless of their income or employment status.
To make SHIF successful, the World Bank also highlighted the need to strengthen the overall healthcare system.
This includes hiring more medical staff, ensuring that hospitals and clinics are properly equipped, and making sure that medicines and other vital supplies are always available.
Special attention should be given to improving healthcare services in remote and underserved regions, where people often face difficulties accessing quality medical care.
The report also laid out several key governance reforms to improve the efficiency and effectiveness of healthcare delivery.
These include better coordination between national and county governments, giving hospitals more freedom to manage their affairs, using KEMSA for bulk procurement of medical supplies to lower costs, and introducing funding models that reward good performance.
Additionally, the SHIF benefits package should be designed realistically based on available government resources.
Beyond the health sector, the World Bank also sounded the alarm about Kenya’s worsening public debt situation. The report shows that the country’s debt remains a serious concern, with nearly a third of all tax revenues being used just to pay interest on existing loans.
The bank warned that even though there have been some small improvements in the economy, Kenya is still in a risky financial position.
Revenue collection remains weak, economic growth is slow, and the government is increasingly relying on domestic borrowing to finance its operations.
As of 2024, Kenya’s public debt stood at 68% of its Gross Domestic Product (GDP), placing it in the high-risk category for debt distress.
The World Bank cautioned that without serious reforms in public finance management and healthcare implementation, the country could face even greater economic challenges in the near future.
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