Poorly managed foreign aid reductions can have detrimental impacts on a country’s health system. Prior studies have shown that successful donor transitions out of a country require planning and pre-transition investments, the absence of which can lead to discontinuation of programs or deleterious effects on population health.

Recent changes have been underway in the priorities, size, and allocation of the UK government aid budget. Evidence is needed to identify the potential impacts of the UK’s aid cuts on health system financing among 134 UK aid recipient countries. We provide insights on how much a country will stand to lose, and therefore would need to cover, either by itself or by other donors, to address the budget shortfall following the UK aid cuts in the health sector. This analysis shows how concentrated of a donor environment a country’s health system has, and then puts this concentration in perspective to see how big of a role aid plays within a country’s overall budget and health budget. We identify several countries whose health systems may be at risk given changes to the UK aid funding portfolio.

While the 2021–2022 UK aid cuts may not have catastrophic impact in many countries, it could have negative impacts in a few countries highly dependent on UK health aid. Additionally, its departure narrowed the number of external providers of health aid and created a more concentrated donor climate in many countries. Although 34 countries were spared in this round of budget elimination, these countries may see a reduced budget and should proceed cautiously as discussions of future cuts may be on the horizon. Notably, many low-income countries in Sub-Saharan Africa are particularly reliant on UK funding for financing their health systems. Any sudden policy shift, reduction in funds, or departure could leave these countries with large funding gaps to fill.

The definitions of the indicators used throughout the paper are outlined in Table 1. We used several principles outlined in McDade et al. paper (12). In particular, we similarly looked at issues of donor concentration and donor dependence. There is no agreed up definition in the literature of how these phenomena should be measured and therefore, we proposed adopting the definitions used in our earlier working paper (12). However, we also provided raw data for each country in the analysis to ensure that the reader is able to make a different cutoff determination for what level they may or may not consider to be dependence or concentration (Supplementary file 1).

Donor concentration tells us whether a small number of donors make up the majority of ODA, and specifically, if the UK is a major contributor. We used UK ODA/Total ODA to capture donor concentration (Table 1). The primary concern with concentration is that it may create vulnerabilities for a country if one of the few major donors changes its funding level or approach; it could have undue impact on the portfolio of external resources available to a country.

Donor dependence on the other hand tells us whether or not a country relies heavily on external resources in comparison to what the domestic government spends. In the previously mentioned paper by McDade et al., dependency was defined as a ratio of external aid to domestic expenditures of 0.25:1. In other words, they believe a country would be considered dependent if donors financed 25 cents or more for every dollar the domestic government spends. The key concern with dependency is whether or not a country would find it difficult to fill such a gap in the event of a donor exit. In this paper, however, we are not making a judgment on whether or not these countries are “dependent” on UK aid. We simply used this principle to help portray how much of a gap a country may need to fill given aid cuts. The indicators used to assess reliance on external resources are listed in Table 1 (Indicators 6–9).

We conducted summary statistics for each of these indicators. Specifically, we compared the median (with 25th and 75th percentiles) between no budget and budget countries and visualize the distribution of individual countries by region (Table 1). We opted to use the median with 25th and 75th percentiles based on the skewed distribution of data.

Our primary data sources were the World Bank, Global Health Expenditure Database (GHED), the United Nations (UN) Department of Economic and Social Affairs, and the Organisation for Economic Co-operation and Development’s (OECD) Creditor Reporting System (CRS; Table 1). World Bank 2022 fiscal year data was used for country income-level, region, size (i.e., small states, or those with less than 1.5 million population size), and level of fragility (13–15). We included these country characteristics to add context to the type of countries that do/do not receive budgets from the UK in the 2020–2021 aid year since these characteristics indicate varying types of development challenges. For example, small states, according to the World Bank, “are particularly vulnerable to exogenous shocks” (15). We recognize that fragility is defined in various ways depending on the source. Given our use of the World Bank classifications for other country characteristics, we used their classification of fragility and conflict for (a) consistency and (b) because all underlying indicators are publicly available. All financial data are reported in 2019 US dollars.

We used Devex’s list of budget and no budget countries/territories (2). Two territories did not have any data available in databases and therefore were excluded entirely: Montserrat and St. Helena. Seven countries/territories had data for overarching characteristics, such as income level and fragility, but limited data across other various indicators. These countries/territories are: Democratic Republic of Korea, Kosovo, Libya, Somalia, Syria, West Bank & Gaza Strip, and Yemen. We have therefore only included them in the characteristics section and dropped them from the subsequent analyses. We have indicated the sample size for each indicator in Table 1.

In total, we analyzed the characteristics of 134 countries: 34 countries that continued to have a budget for the 2020–2021 aid year and 100 countries that did not have a budget for the 2020–2021 aid year. We assessed their income level, region, size, and fragility status, according to the World Bank classification.

More than half of all no budget countries are low or lower-middle income (n = 53, 53%) while 44% are upper-middle income (n = 44), and 3% are high-income (n = 3; Figure 1). The median GDP per capita of no budget countries is US$3,861 (Table 2). More than a quarter of countries are in sub-Saharan Africa (n = 27, 27%) followed by Latin America and the Caribbean (n = 23, 23%). Nearly a quarter of countries are considered fragile or conflict-affected (n = 24, 24%) while a third are small states (n = 34, 34%).

Three-quarters of all budget countries are low or lower-middle income countries (n = 26, 76%) whereas 24% are upper-middle countries (n = 8; Figure 1). The median GDP per capita of budget countries is US$ 1,339 (Table 2). More than half are in sub-Saharan Africa (n = 19, 56%) followed by South and East Asia (n = 8, 24%). Over a third (n = 13, 38%) are considered fragile-or conflict affected countries. None are considered small states.

Overall, budget countries are more reliant on external aid to finance their governments and health systems (Table 2). Budget countries have higher median ratios of ODA to GGE and Health ODA to GGHE-D than no budget countries. While the UK’s role in financing both is minimal, the UK is generally a more prominent donor among budget countries (Table 2). Although both groups of countries exhibit “need” based on their income-level and fragility status, a larger share of budget countries are lower-income and fragile.

Since the UK aid cuts are not specific to the health sector, we assess the role the UK contributes to a country’s total ODA across all sectors in addition to a country’s health-specific ODA. In general, we find that the UK contributes a larger share of total ODA and health ODA in budget countries than in no budget countries, with some exceptions.

For no budget countries, the median share of UK ODA out of total ODA is 1% (Table 2). Although the UK contributes a small share across most no budget countries, the UK does make up a larger share of ODA in some. Specifically, UK ODA contributes the largest share in Lebanon (14%), Malaysia (13%), the Gambia (10%), and Jamaica (9%; Figure 2). For health ODA specifically, the median share of UK health ODA out of all health ODA is 0% (Table 2). However, there are several exceptions where the UK is a large player, such as the Gambia (55%), Thailand (18%), Libya (14%), Malaysia (14%), Eritrea (13%), and Jamaica (8%; Figure 3).

United Kingdom ODA plays a more prominent role in budget countries for both total ODA and health-specific ODA. The median share for both UK ODA out of total ODA and UK health ODA out of health ODA is 7% (Table 2). In terms of total ODA, the UK is one of the top donors in several countries, including Sierra Leone (17%), South Sudan (16%), Zimbabwe (15%), Somalia (13%), and Pakistan (12%; Figure 2). We see even higher shares of UK contributions within health ODA, with the highest shares found in South Sudan (32%), Brazil (31%), Sierra Leone (22%), Somalia (20%), and Nepal (15%; Figure 3).

Assessing the role UK ODA plays across all sectors, and within the health sector, shows us how big of a player the UK is compared with other external donors. The UK is not a large player in the vast majority of countries that will not receive a budget for the 2021–2022 year and is a larger player in many of the countries that will still see continued aid programs. However, this indicator does point to several no budget countries where UK aid does make up a considerable portion of total ODA, and therefore could feel the impacts of UK exit more acutely.

To put into perspective how much external aid plays a role in financing a country’s government, and specifically to what extent the UK contributes to the pool of external resources, we assess the ratio of ODA to GGE and UK ODA to GGE. We find that ODA plays a considerable role in financing many countries across both groups. However, the extent to which the UK contributes is limited in most no budget and budget countries, with a few notable exceptions.

For no budget countries, the median ratio of ODA to GGE is 0.09:1, meaning that for every nine cents donors spend, the government spends a dollar (Table 2). Twenty-five no budget countries have a ratio of ODA to GGE of 0.25:1 or greater, meaning that for these countries, external donors spend 25 cents or more for every dollar the government spends (Figure 4). In all but two countries (the Central African Republic and the Gambia), the ratio of UK ODA to GGE is nearly zero, meaning that the UK is not a major contributor to ODA (Figure 5).

The median ratio of ODA to GGE among budget countries is 0.15:1, meaning that for every 15 cents donors spend, the government spends a dollar (Table 2). A third of budget countries have ODA to GGE ratios of 0.25:1 or greater (n = 11), most of which are located in Sub-Saharan Africa and are low-income (Figure 4). This threshold of 0.25:1 was used in McDade et al. to signal donor dependency (12). The reliance on the UK as a source of ODA is greater among budget countries than in no budget countries, albeit the UK is overall still a relatively small contributor to ODA in these countries. The UK ODA to GGE ratio is highest in South Sudan (0.17:1), Sierra Leone (0.11:1), and Afghanistan (0.7:1; Figure 5).

A number of both no budget and budget countries receive considerable amounts of ODA compared to their own government’s general expenditures. Although the UK does not seem to be a major contributor to high ratios of ODA to GGE, there are several countries, both no budget and budget, where it plays a considerable role, including the Central African Republic, the Gambia, South Sudan, Sierra Leone, and Afghanistan. These countries in particular will have the most external funds relative to their own expenditures that will need to be found from elsewhere in the event of a donor exit.

Looking specifically within the health sector, we analyze the ratio of health ODA to domestic government expenditures on health (GGHE-D). We focus on GGHE-D rather than all domestic financing sources since the government would be the main party accountable for financing the health system gaps in the event of a donor exit. However, we do recognize such funding gaps could in reality be filled by other sources, such as out of pocket payments by consumers.

We find a strong divergence between no budget countries and budget countries in terms of external health aid to domestic health expenditures. Although a number of no budget countries do have high ratios of health ODA to GGHE-D, the median ratio across budget countries is considerably higher (0.41:1) than in no budget countries (0.06:1; Table 2). While the UK does not appear to be a top contributor to health sector dependency on aid among zero-budget countries, it does seem to be in many budget countries.

No budget countries have a median health ODA to GGHE-D ratio of 0.06:1 (Table 2). One-third of no budget countries have a ratio of health ODA to GGHE-D greater than 0.25:1, an indicator that has been previously used to signal donor dependency in the health sector (Figure 6) (12). This means that in a third of the no budget countries, health ODA is a major source of financing for the health system: for every $1 the government spends on health, external donors spend more than 25 cents. In 12 countries, this ratio exceeds 1:1, meaning health aid contributes more to the health system than the domestic government: Central African Republic (4.7:1), Guinea-Bissau (3.1:1), Eritrea (2.6:1), Gambia (2.2:1), Cameroon (2.2:1), Haiti (1.9:1), Guinea (1.7:1), Comoros (1.6:1), Benin (1.6:1), Micronesia (1.4:1), Chad (1.4:1), and Mali (1.3:1). If we examine the ratio of UK health aid to GGHE-D, we can see how the UK spending on health compares to the domestic government. Among no budget countries, the median ratio of UK health ODA to GGHE-D is 0.0:1 (Table 2). Only two no budget countries have a sizeable ratio: the Gambia (1.24:1) and Eritrea (0.33:1; Figure 7).

For budget countries, we see aid play a much stronger role in financing health. Among budget countries, the median health ODA to GGHE-D ratio is 0.41:1, meaning external donors contribute $0.41 for every $1 the domestic government spends (Table 2). 62% of budget countries (n = 21) have a dependency ratio of 0.25:1 or greater, signaling potential dependency on external aid to finance their health systems (Figure 6). The role of UK health aid varies among these budget countries, however (Figure 7). While the median ratio of UK health ODA to GGHE-D is 0.02:1, several low-income countries in Sub-Saharan Africa have very high ratios, such as South Sudan (3.15:1), Sierra Leone (0.48:1), and the Democratic Republic of Congo (0.34:1), suggesting that donors match every US$1 spent by the host country by US$ 3.15, US$ 0.48, and US$0.34, respectively. While any change in UK spending in these three countries would likely be strongly felt, it is important to note that these countries are also all dependent on US support, in some cases even more so than they are on the UK: South Sudan (0.72:1), Sierra Leone (0.51:1), and the Democratic Republic of Congo (0.52:1). If the UK were to change its policy in these countries, these countries would then have a more concentrated donor environment and be even more reliant on other existing donors, such as the US. These countries are also dependent on financing from Canada and Germany, although to a lesser extent.