The government will slash the development budget to finance key programmes that could be affected by US aid freeze, Treasury Cabinet Secretary John Mbadi has said.

Mbadi said the government will revert to domestic health financing to ensure that programmes, especially those in the health sector like HIV/Aids, continue without interruption.

“We will have no alternative but to slash part of the development budget and use the funds to finance critical programmes that will be starved of cash if the US stops foreign aid,” Mbadi said.

The CS who spoke after attending the mid-term National Assembly retreat added: “There is no cause for alarm as I have started to put measures in place to ensure that health programmes that depended heavily on foreign aid are not paralysed.”

Mbadi however pointed out that the government was still awaiting official communication from America on freezing of foreign aid.

“President Trump took the action immediately after he assumed office and it is normal for that to happen during a change of regime in any country,” he added.

He noted that he was aware that the country depends on donor funding from the US on health and security programmes and thus acknowledged that withdrawal of funding would be a big blow to such programmes.

He however noted that it was important for the country going forward to break dependency on donor funding for critical programmes.

His statement comes hardly days after the Mission for Essential Drugs and Supplies (MEDS) in a memo informed Kenya Medical Supplies Authority (Kemsa) Chief Executive Officer, Waqo Ejersa, that the processing of all US-funded essential drugs has been put on hold indefinitely.

This includes crucial commodities funded by the United States Agency for International Development (USAID), affecting the distribution of life-saving treatments for HIV, malaria, and tuberculosis (TB).

MEDS was contracted by the US in 2020 to supply HIV commodities in Kenya, including ARVs, malaria, and tuberculosis (TB) drugs, among other medical consignments, following the Covid-19 billionaire scandal, which led to a loss of trust in Kemsa by the donor.

The memo outlined that all USAID-funded commodities would be suspended indefinitely following instructions received on January 26, 2025, from USAID Kenya and East Africa.