Nairobi, May 28 : The World Bank has cast a shadow of doubt over the sustainability of President William Ruto's ambitious universal Health coverage plan, being rolled out under the Social Health Authority (SHA).
The institution, has cautioned the Kenyan government that the Social Health Authority (SHA) risks collapsing if the current approach to its funding is not reviewed.
In its latest report titled Public Finance Review (PFR) released on Tuesday, the World Bank stated that the sustainability of the Social Health Insurance Fund (SHIF) is undermined by Kenya’s largely informal labor market.
The Multilateral lender, cautioned that the government's dependency on these Kenyans, majority of whom do not contribute—puts the government's annual target of Ksh157 billion at risk.
“SHIF is a contributory scheme financed through mandatory payroll deductions (2.75 percent) from employees in the formal sector. Workers in the informal sector, who account for up to 80 percent of the national workforce, are mandated to contribute 2.75 percent of their household income, but the majority do not contribute.
" As a result, SHIF is projected to collect only 67 billion Kenyan shillings per year—far below the target of 157 billion Kenyan shillings,” the report stated.
“The government plans to subsidize contributions only for indigent households, leaving a large portion of the population unfunded. Moreover, the payroll tax design discourages formalization, particularly for low-wage workers and small employers who face higher costs when joining the formal sector. This creates a structural contradiction: SHIF depends on formalization to succeed, yet it actively undermines it.”
The World Bank has therefore recommended that the government focus SHIF collections on formal sector workers and finance contributions for informal workers and poor populations.
Meanwhile, the Social Health Authority (SHA) has urged public and private employers across Kenya to register their organisations and submit monthly contributions without fail to the Social Health Insurance Fund (SHIF).
In a notice on Monday, SHA stressed that all employers must register their organisations via the official employer portal, enrol their employees along with their dependents and make contributions before the ninth day of every month.
"Any person who fails to pay any contribution in respect of a period on or before the day on which payment is due shall be liable to a penalty equal to two per cent of the amount due for contribution for the period in which the contribution remains unpaid and the annual contributions," the notice reads.
"Enrol all employees in the SHA system, ensure their details are up to date, and encourage them to add their dependents. Remit monthly contributions on or before the ninth day of each month. Not paying contributions to the Social Health Insurance Fund without a valid reason is an offence."
Besides legal consequences, the authority warned that employees of non-compliant organisations may also risk losing access to essential health services.
"Offenders may face fines up to Sh2 million and up to three years in prison. Non-compliance can also lead to financial penalties and loss of health services for employees," the notice reads.
In view of these potential consequences, the Authority urged employers to act promptly. An online portal has been provided to facilitate registration and ensure employee records, including those of their dependents, are up to date.
Employers in need of assistance with registration and compliance may contact SHA via the toll-free number 147, or access further guidance on the official SHA website or through email.
According to Health Cabinet Secretary Aden Duale, more than 22 million Kenyans registered with SHA since it was launched eight months ago, with April 2025 recording the highest monthly sign-up at 775,000 new enrollees.
Of the total, 18.5 million are active members, while over 3.6 million transitioned from the now-defunct National Hospital Insurance Fund (NHIF). Duale noted that 6.3 million of the registered individuals fall within the 18–35 age group, followed by 5.3 million aged between 36 and 55.
Another 4.38 million are children under 18, while 2.5 million are over the age of 55. On average, 50,000 new registrations and 25,000 means assessments are being done daily, generating around Sh20 million in daily contributions.
