PARIS – Over the past few decades, global health financing has relied on a narrow base. As of 2023, official development assistance (ODA) grants accounted for 75-95 per cent of health-related aid flowing into developing economies, making the system highly dependent on the public budgets of a handful of donor countries.

 

To be sure, this model has delivered major gains. Mortality rates among children under five in low-income countries, for example, fell by 19 per cent between 2011 and 2019, from 1,837 deaths per 100,000 children to 1,485. ODA-funded institutions also underpinned collective responses to global crises, including the COVID-19 pandemic. But dependence on a small number of provider countries has become a structural vulnerability, as shifts in their political and fiscal priorities reverberate across the entire system.

 

As a result, global health financing is at a turning point. In 2024, total ODA fell by more than $15 billion. Funding is estimated to have fallen by another 9-17 per cent in 2025, and cuts are expected to continue through 2027, placing $40-55 billion in development assistance at risk. Bilateral ODA for health is shrinking even faster, falling by 19-33 per cent between 2023 and 2025 to below pre-pandemic levels.

 

The consequences for multilateral health institutions and the world’s poorest countries will be severe. Of the 34 members of the OECD’s Development Assistance Committee (DAC), 22 cut their aid budgets in 2024.

 

Agencies are already being forced to adjust. The Joint United Nations Programme on HIV/AIDS (UNAIDS) expects to halve its staff and scale back its operations from 75 countries to 36 following a sharp reduction in US funding, while the WHO has proposed a 14 per cent cut to its core budget for 2026-27.

 

The impact will be felt most strongly in the world’s least developed countries. Bilateral ODA to LDCs fell by an estimated 13-25 per cent in 2025, following a 3 per cent decline in 2024. In Sub-Saharan Africa, the projected cuts are even steeper, at 16-28 per cent, potentially resulting in the loss of around one-quarter of total ODA in a single year. In the ten countries with the highest levels of extreme poverty, the top five donors provide 85 per cent of ODA, with the United States and the World Bank ranking among the top two in eight of them.

 

The decline in ODA reflects a structural shift rather than a cyclical shock. Between 2011 and 2024, health-related development assistance fell by roughly 24 per cent as a share of global GDP, despite a brief pandemic-driven surge. Over the same period, the rationale for health aid shifted away from solidarity and human development toward economic interests, national security, and pandemic preparedness.

 

Meanwhile, the development-finance landscape has become increasingly crowded and complex. BRICS+ (China, Russia, and India in particular) and emerging regional powers collectively have been providing over $100 billion in development funding since 2022. Roughly 80 per cent of these funds come from China and are primarily delivered through loans and other non-grant instruments.

 

The 11 BRICS+ countries, which account for 27 per cent of global GDP, are widely expected to overtake the G7 by 2050, enabling them to exert growing influence over both the volume and direction of development finance. These newer providers often favor bilateral, project-based approaches, loans over grants, and infrastructure-heavy investments. Their investment patterns are driven by geopolitical interests, concentrating resources in strategically important regions while leaving others, including parts of Sub-Saharan Africa, underserved.

 

Private and impact investors are also playing a more prominent role. Across Africa and Asia, health-care-focused private equity and impact funds are providing patient capital and innovative financing structures, creating space for investments that deliver both financial returns and measurable health benefits.

 

But not all health projects are suitable for this type of capital. A detailed analysis of Côte d’Ivoire and Uganda’s health-security action plans shows that only 25-30 per cent of budgeted projects combine direct, measurable health impact with predictable cash flows and clear revenue models. These are typically infrastructure investments, such as oncology centers and specialized institutes, that can generate service revenues and position countries as regional hubs. By contrast, core public goods such as disease surveillance and health-system planning continue to rely on grants and highly concessional financing.

 

More broadly, the Boston Consulting Group estimates that projects representing roughly 20 per cent of national health spending, and potentially up to 30 per cent of global portfolios, could attract return-seeking investors. To this end, such projects should be viewed through an investment lens, with clearer business models, cash flows, and risk-return profiles.

 

Unlocking that potential requires making health outcomes legible to investors. While public donors focus on traditional indicators such as lives saved and mortality reduction, private and impact investors often look for quantitative frameworks that link investments to the Sustainable Development Goals and to portfolio-level performance. A prime example is the SDG Blue rating system. Developed by Blue Like an Orange Sustainable Capital, it assigns each investment a score from zero to ten based on its contribution to selected SDGs.

 

We need more such models, because the latest wave of ODA cuts underscores the need to rethink how global health is financed. National and global portfolios should be broken down into distinct project types, each matched to the form of financing most suitable for its risk profile. Government grants and highly concessional loans should remain focused on low-income countries, vulnerable populations, and essential public goods, while infrastructure-heavy and service-based initiatives with clear revenue models can be structured to attract private and impact capital. Blended arrangements can bridge these two extremes, aligning public, philanthropic, and private resources.

 

Achieving such a reset will depend on how effectively governments, multilateral institutions, and development partners structure financing, sort projects by risk, and engage investors. By recognizing that impact and financial returns can be mutually reinforcing, the world can move toward a more resilient and diversified financing model that protects and builds on hard-won gains, even as public budgets become increasingly constrained.

 

Bertrand Badré, a former managing director of the World Bank, is Chair of the Project Syndicate Advisory Board, CEO and Founder of Blue like an Orange Sustainable Capital, and the author of Can Finance Save the World? (Berrett-Koehler, 2018). Johanna Benesty is Managing Director and Senior Partner at Boston Consulting Group. Copyright: Project Syndicate, 2025. www.project-syndicate.org