Amid the USAID funding freeze, the Ministry of Finance, which is preparing the budget for the next fiscal year 2025-26, has set a ceiling of Rs83 billion for the Ministry of Health and Population’s expenditure. This amount is Rs3 billion less than the allocation for the current fiscal year.

The government’s budget cut could affect Nepal’s major priority health programmes including those related to maternal and child health, immunisation, nutrition, HIV, tuberculosis, epidemic control, non-communicable diseases, and mental health, officials say.

“USAID used to step in where the government’s investment fell short,” said Dr Prakash Budhathoky, spokesperson for the health ministry. “We are unsure if USAID-funded programmes will resume, and now even our new budget ceiling has been lowered compared to the ongoing fiscal year.”

Every year, the finance ministry sets ceilings for all ministries to prepare budget proposals for themselves. Based on these proposals, the finance ministry prepares the annual budget, which is then presented to and endorsed by Parliament.

For the ongoing fiscal year, the government had allocated Rs86.24 billion to the health ministry. This allocation also included health budgets for provincial and local governments.

Health officials said the health budget must be significantly increased to give continuity to existing healthcare programmes, especially as several vital programmes have already been affected by the USAID funds freeze.

“The healthcare sector needs at least 10 percent of the national budget,” said Budhathoky. “In the past, aid agencies funded sectors where the government would not, but when they suspend funding, the government should shoulder the responsibility to continue the crucial programmes.”

The US government suspended nearly all foreign assistance worldwide for three months in the last week of January soon after Donald Trump assumed presidency. Nepal is already feeling the impact, and officials say they are bracing for further consequences in the coming days.

The funding freeze has disrupted multiple healthcare programmes, many of which relied directly on USAID grants or indirectly on dozens of non-governmental organisations.

“Impacts of fund cuts may seem insignificant in the initial stage, but the consequences will be severe in the long run,” said Dr Bibek Kumar Lal, director at the Family Welfare Division of the Department of Health Services. “Years of progress will be jeopardised if we discontinue ongoing programmes.”

Among the terminated programmes are key health surveys, including the micronutrient survey, which was planned over the last 10 years, the lymphatic filariasis transmission survey, and the promotion of exclusive breastfeeding at 18 major hospitals.

Awareness programmes targeting female sex workers, homosexual men, and other high-risk groups have also been halted.

Health officials say an indefinite halt in health surveys and data collection puts the country in the dark about updated health indicators and affects efforts to track progress on Sustainable Development Goals (SDGs) targets.

“We won’t know how much progress has been made in healthcare or what adjustments are needed to improve the effectiveness of programmes, if we don’t have reliable health care data,” said Lal.

SDGs, a follow-up on the Millennium Development Goals (MDGs), aim to end poverty and hunger and all forms of inequality in the world by 2030, and Nepal has committed to meeting the goals.

Other affected programmes include ‘outbreak investigation training’ for doctors, neonatal care training for hundreds of doctors and nurses, and various programmes related to the Sustainable Development Goals, including maternal and child health, nutrition, reproductive health, and family planning. Programmes under the Integrated Health Information Management System have also been hit.

Nepal witnessed outbreaks of several diseases including dengue, cholera and diarrheal diseases, and other vector-borne diseases in the past years. As the country has been dealing with new and emerging health challenges of late, experts say more funds are required to address the new challenges.

Studies show that 71 percent deaths in Nepal are caused by non-communicable diseases, such as heart diseases, chronic obstructive pulmonary disease, lower respiratory infections and stroke.