The US$ 8 Billion Hole in Global Health: Why Private Capital Must Step Up Now [GUEST ESSAY]

Newsletter Edition #268 [The Files In-Depth]

Hi,

As the extent of the crisis in global health becomes clearer going beyond the immediate financing crunch, all kinds of measures are on the table. The range of implications of the lack of resources for health programmes over the medium to long term is yet to become fully evident. But what we reasonably know is that traditional donor countries will not step in significantly to fill the hole left by the withdrawal of the U.S. from the sector. Philanthropists are not likely to respond in equal measure.

In today’s edition, we get an indication of private capital’s appetite for global health.

We present a guest essay from a Switzerland-based global health investment advisory firm, Baraka Impact Finance, to give you a flavor on the types of conversations in the ecosystem, on the crisis we are collectively witnessing. This contribution argues that private capital can be a cornerstone for global health financing to address health inequities at scale, and a new social contract around finance.

Already, impact investing in global health exceeds $100 billion.

By one estimate, Switzerland accounts for over 10 per cent (nearly CHF 180 billion at the end of 2024) of the entire universe for sustainable investments. With Geneva as the capital of global health, there are questions on whether private investments into the staid world of global health policy-making, could to an extent, staunch the current bleeding in the field, albeit in return for efficiency and other metrics.

It has been our every effort to bring our readers diverse viewpoints. You will find today’s piece illuminating to understand how other actors are assessing the current crisis.

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Best,

Priti

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Illustration Credit: Amy Clarke, Chembe Collaborative

I. GUEST ESSAY

The US$ 8 Billion Hole in Global Health: Why Private Capital Must Step Up Now

By James Bair

Bair is a Partner and Managing Director of Baraka Impact Finance LLC, a Swiss-registered advisory and intermediary facilitating private capital investment in the health sector of emerging and frontier markets. Contact: jbair@barakaimpact.com

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The global health financing system is facing a crisis of historic proportions as traditional sources of Official Development Assistance (ODA) continue to erode.

The U.S., once the single largest bilateral donor to health programs in low- and middle-income countries (LMICs), has significantly reduced its contributions, with the Trump administration’s foreign aid freeze alone creating an $8.3 billion annual gap.

But this is not a uniquely American shift. European donors—including the UK, France, and the Netherlands—have also scaled back support, compounding the strain on already fragile health systems. Collectively, these funding contractions imperil millions of lives and risk unraveling decades of progress against HIV, tuberculosis, malaria, and other preventable diseases.

With longstanding models of global health assistance under threat, there is an urgent need to reimagine how the world finances health equity and resilience. While many are sounding the alarm, few are answering the question: What now?

Many are suggesting private capital must step into this vacuum, not as a stopgap, but as a cornerstone of a new and sustainable global health financing system. Already, in many LMICs, private actors provide the majority of healthcare services. Across Africa, roughly 65% of healthcare delivery is carried out by the private sector. Despite this, the potential of private capital to address these gaps remains largely untapped.

The challenge now is not whether to engage the private sector—it’s how to mobilize private capital in ways that tackle health inequities at scale.

Image Credit: Photo by Steve Johnson, Pexels