As development aid from external partners continues to dwindle, financial experts from across Africa are urging governments to take bold steps to optimize domestic financing for sustainable development.
The call was made as the economic experts and Civil Society discussed optimising domestic financing for development in Africa approach during the second day of the Evidence for Development conference in Nairobi that is championing the use of data, innovation and evidence informed policy and decision making.
They highlighted the urgent need for Africa to embrace innovative financing mechanisms, integrate technology, and drive efficiency in health systems to build resilient and equitable healthcare for all.
Dr Daniel Mwai, Presidential Advisor on Health Financing in Kenya, pointed to the fragmentation of services and vertical health programmes as key barriers to efficient health financing.
“We can cut the cost of healthcare in Africa by 40% if we reorganise and plan well in its delivery,” Dr Mwai stated, calling for integration and multi-skilled healthcare workers. He urged countries to focus on preventive healthcare as compared to curative healthcare.
Dr Jackson Otieno, Senior Policy Analyst at the African Institute for Development Policy (AFIDEP), painted a depressing picture of Africa’s fiscal landscape. He highlighted multiple challenges such as climate change, shrinking external aid, growing debt burdens, and global economic uncertainty.
“The era of aid is fading. We must look at innovative financing mechanisms and quantify the potential gains from addressing inefficiencies such as corruption, HR shortages, and drug wastage.”
Otieno noted that in 2020, Development Assistance for Health (DAH) accounted for more than 20% of health spending in 24 African countries and even surpassed government expenditure in 10 countries. The grim statistics also indicating that top three donors to the health sector accounted for 60% of aid to health in 2020 including the United States and United Kingdom.
“African countries should transition from donor dependency to domestic resource mobilisation,” Dr Otieno said, proposing innovative options such as health taxes, and robust anti-corruption measures that could unlock 5–10% in savings. He also highlighted the need for expanding health insurance coverage, integrating technologies like Artificial Intelligence to minimise waste, and strengthening financial oversight.
“There is a need to unlock the potential of new technology,” Prof. Victor Murinde, Executive Director of the African Economic Research Consortium (AERC), said. “The adoption of AI, big data, and machine learning is key in identifying best practices and reducing inefficiencies.”
Kwame Owino, CEO of the Institute of Economic Affairs (IEA-Kenya), emphasised the need for fiscal discipline and efficient resource utilisation in Africa’s healthcare systems: “Citizens across East Africa are reaching their limits, the protests last year in Kenya were a clear sign. We must get the most from the taxes by prioritising high-impact public goods and reducing wastage through corruption. Governments must spend conservatively in areas with the greatest public demand.”
Dr. Bona Chitah of the University of Zambia emphasized the importance of industrial restructuring. “Despite Africa’s diversity, there’s limited value addition. We must optimize how we mobilize resources to support industries that deliver economic returns.”
Experts also pointed to a lack of political will and oversight. “Our parliaments are asleep and need to wake up,” Owino stressed, noting that decisive legislative action is required to strengthen governance and ensure funds are directed to impactful areas.
Dr. Patrick Zimpita, Principal Secretary for Economic Planning and Development in Malawi, warned that rising debt is squeezing development budgets. ” There is a need for budget reforms as most of African governments spend 70% of their budgets in recurrent expenditures while 30% on development of which 80% of the 30% on development is donor funding,” he said.
The experts called for homegrown solutions, stronger stakeholder engagement, and strategic investments in health-focused technology and financing models.
As countries face pressure to deliver quality healthcare amid shrinking budgets, experts agreed that bold reforms, partnerships, and innovation should take centre stage.
The conference is co-convened through a strategic partnership between AUDA-NEPAD, AFIDEP, and SFA Foundation, along with leading institutions in the science, data, research, and innovations space in Africa and beyond.
