Kenya re-enters the U.S. good books with $2.6 billion health and debt deals

Kenya has secured two separate agreements with the United States worth a combined $2.6 billion, including a $1.6 billion health compact and a $1 billion debt-for-food security swap, following its role in facilitating a peace deal between the Democratic Republic of Congo and Rwanda in Washington.

Under the health compact, signed by U.S. Secretary of State Marco Rubio and Kenyan President William Ruto, funding will flow directly through Kenyan government institutions rather than non-governmental organisations.

Kenya has committed to increase domestic health spending by $850 million over five years, giving U.S. officials confidence in its plans to strengthen the healthcare system.

Unlike the previous administration’s approach of channeling aid through the U.S. Agency for International Development (USAID), under which the U.S. provided $440 million to health programs in 2024, with $310 million allocated to HIV/AIDS, the new compact directs funding through the Kenyan government, ensuring greater accountability and alignment with national priorities.

Rubio emphasised that the move shifts support away from the “NGO industrial complex,” which had previously absorbed a disproportionate share of aid intended for patients. “We’re not doing this anymore,” he said.

The East African nation faces rising debt pressures, with public debt reaching 68.8% of GDP in FY 2024/25, up from 67.5% the previous year.

Domestic borrowing accounts for 53.6% of total debt, prompting the government to seek more affordable financing to free resources for infrastructure and development projects.

As part of the agreement, the DFC plans to deepen its engagement in Nairobi, including the deployment of a permanent representative next year.

Together, the agreements signal a shift toward government-led, accountable aid in Africa, rewarding countries with institutional capacity and strategic alignment.

For Kenya, the deals offer fiscal relief, strengthen institutional capacity, and reinforce its role as a regional anchor in East Africa.

The health compact will gradually transfer responsibility for health workers initially funded by U.S. aid to the Kenyan government, with faith-based providers receiving the same treatment as private facilities under government reimbursement programs.

The twin agreements may serve as a model for other African nations, linking aid to measurable outcomes, institutional development, and regional engagement.

President Ruto praised the Trump administration’s health initiative and credited past U.S. assistance with saving millions of Kenyan lives. “I assure you that every shilling and every dollar will be spent efficiently, effectively, and accountably,” he said, while reiterating Kenya’s call for broader international contributions to Haiti.