President William Ruto’s flagship Social Insurance Fund (SHF) project faces significant challenges after the National Treasury slashed the Ministry of Health’s budget by Sh219 billion.
The recent return-to-work agreement between the government and the Kenya Medical Practitioners, Pharmacists and Dentists Union (KMPDU) is also jeopardized, as the Treasury failed to allocate any funds for it.
The Ministry plans to introduce an addendum to the budget to address this shortfall.
In addition to SHF and the doctors’ agreement, other health sector initiatives will be adversely affected by the budget cuts for the 2024/2025 fiscal year.
These include the procurement of HIV/AIDS, family planning, and vaccines commodities, as well as free maternity services. The Ministry of Health had requested Sh319.4 billion but received only Sh100 billion, leaving a substantial deficit of Sh219.4 billion. Of the allocated Sh100 billion, Sh60.5 billion is designated for recurrent expenditure, while only Sh39.5 billion is set aside for development.
Members of Parliament on the Health Committee, chaired by Endebess MP Robert Pukose, expressed shock at the significant budget cuts, which are expected to negatively impact the delivery of health services to Kenyans.
Budgetary allocations
Nyeri Town MP Duncan Mathenge said that based on the budgetary allocation, it is clear that the government is not interested in implementing the new health scheme.
“What are we telling Kenyans about this? Is the amount left really able to fund this? We have been telling Kenyans about this and we have even gone ahead and deducted money from salaries,” he said.
Seme MP Dr James Nyikal, who is a former Director of Medical Services questioned how the fund will work following the deduction of the said vote by more than Sh100 billion.
“I am wondering how this social insurance fund will work. Kenya Kwanza came up with this model and we need to be told how to move because as of now it leaves us not sure about what is going to happen in future,” Dr Nyikal, a medical practitioner observed.
Nandi Woman Representative Cynthia Muge sought to know whether the government was deliberating killing the Social Health Insurance Fund following the huge cuts on the Ministry’s budget.
She also questioned what the reduction of the monies meant for maternal health sector after the Ministry said that not all pregnant mothers will be covered by the insurance fund as beneficiaries are only the indigents.
Their sentiments came after Medical Services Principal Secretary Harry Kimtai tabled documents indicating the various critical sectors that have suffered as a result of the budget cuts .
“The resource allocation in the proposed annual estimates shows a significant deviation of the annual budget estimates allocation from the 2024 Budget Policy Statement ceiling,” Kimtai’s statement read.
The documents show that implementation of Social Insurance Fund had been reduced by Sh 94.9billion out of which 45.9 billion has been slashed from Primary Health Care which was only allocated Sh 4.1billion while the Emergency, Chronic and Critical Illness Fund has lost Sh49 billion after it was only allocated Sh500 million.
The budget cuts to the Ministry of Health have severely impacted several crucial areas:
1. Vaccines and Health Commodities:
– The entire Sh14.1 billion requested for the procurement of HIV, family planning, and vaccines commodities has been cut.
2. Semi-Autonomous Government Agencies (SAGAs):
– Lost Sh2.8 billion in funding.
– Kenyatta National Hospital (KNH) and satellite hospitals, including Mwai Kibaki Hospital and Mama Margaret Uhuru Hospital, lost Sh804 million intended for the implementation of the Affordable Housing Levy (AHL), National Social Security Fund (NSSF) contributions, and staff mortgage schemes.
– Moi Teaching and Referral Hospital (MTRH) lost Sh944.1 million meant for unpaid salary obligations and the staff pension scheme.
– The Kenya Medical Research Institute (KEMRI) lost Sh1 billion, which was intended for AHL, pension benefits schemes, and pending court order claims.
3. Cancer Fight:
– The National Cancer Institute received only Sh170 million out of the Sh800 million requested, severely impacting cancer treatment and prevention efforts.
4. Free Maternity Services:
– The budget has been reduced from Sh4 billion to Sh2 billion, affecting the availability of free maternity services.
5. Social Health Insurance and Health Acts:
– Funds intended for the scaling up of the Social Health Insurance Fund, implementation of the Social Health Insurance Act 2023, Primary Health Care Act, and Digital Health Act 2023 have been cut.
Kimtai, in his submissions, urged the Health Committee to reinstate the funds to avoid disruptions in critical health services. He highlighted that personal emolument issues have been a recurring problem, causing disruptions in service provision in key referral hospitals like KNH, MTRH, and other SAGAs.
“The state department requests the committee to consider the above additional requests to ensure Kenyans get specialised healthcare services, avoid stalling of ongoing projects and ensure Kenyans get return on investment in the health sector through better service’s provision,” the PS implored.
Health coverage
He added : “The deviation in allocation will significantly affect the implementation of the Universal Health Coverage which requires funding of the Primary Health Care Fund, Critical Illness and Emergency Funds, operationalization of Social Health Authority and the operations of the day to day running of the state department.
On procurement of HIV, family planning and vaccines, he regretted that there has been a perpetual rationalization of the said funds over the years during supplementary estimates.
he further regretted that there has been a steady reduction in donor funding for the said programs and called on the government to increase its counterpart funding to offset the deficit especially for the said commodities.
“ The state department further requests that these funds be ring fenced in the financial year 2024/2025 and the Medium Term and further be exempted from any budgetary cuts in supplementary estimates,” the PS noted.
