Government health expenditure in Kenya has declined from 8 per cent in 2001/2002 to 4.6 percent in 2009/2010 (Kenya National Health Accounts 2009/2010). This is a far cry from the Abuja Declaration (April 2011) where African heads of state committed to allocate 15 per cent of their national budgets to health as well as mobilize resources for improved access to HIV medications, vaccine research and prevention programs.

The Health Sector in Kenya has primarily been funded by the private sector (e.g. expenditures financed out of pocket and by private insurance). However, the private sector contribution of the total health expenditure has decreased from 54% in 2001/2002 to 37% in 2009/2010 with a decline in out of pocket (OOP) expenditure from 43% in 2001/02 to 24.5% in 2009/10.  This reduction in the number of households paying cash or in-kind payments to access health services is positive as it has a direct impact on social protection particularly of the poor as they are considerably vulnerable to catastrophic effects of out of pocket spending on health.

Donor contribution (e.g. expenditures financed by grants or loans from international donors) has doubled from 16% 2001/2002 to 35% in 2009/2010 with a focus on HIV/AIDS and TB. The public sector contribution (e.g. expenditures financed through governmental bodies or social insurance funds) has remained constant at 29% over the same period resulting in a continued reliance on the private sector and donors to principally finance the health sector.

According to the Kenya National Health Accounts (2009/2010), a comprehensive system that tracks resource flow in the country’s health sector there have been significant gains over the past decade in the Total Health Expenditure which has increased by 44% from Ksh82.2 billion (US$1,046 million) 2001/2002 to Ksh122.9 billion (US$1,620 million) 2009/2010. The Total Health Expenditure per capita has also increased from Ksh 2,636(US$ 34) 2001/2002 to Ksh 3,203(US$ 42) in 2009/2010.  Although the per capita health expenditure has increased it is still significantly low and falls short of the amount needed to provide an essential package of services for all Kenyans.

The Total Health Expenditure on Priority areas, 2009/10 Source: Kenya National Health Accounts 2009/10

Nevertheless, despite the fact that the government has not made significant progress increasing the allocation of government revenues to health, it has made efficiency gains by prioritizing health spending.

The German Development Cooperation has partnered with the government to achieve the objective of providing good quality affordable healthcare for all Kenyans, ensuing in the reduction of health inequities and reversing the negative trend of health outcomes. However, to achieve the ‘Abuja Declaration’ target, the government needs to prioritize and increase health allocations of government revenue