The sudden suspension of USAID funding should not be seen as a crisis but as an opportunity for African governments to accelerate reforms to build resilient economies, strengthen institutions, and mobilise domestic resources.
By Edward Githae
The world continues to grapple with the far-reaching consequences of U.S. President Donald Trump’s sudden suspension of foreign aid, enacted in late January.
Although the Trump administration insists it will maintain the U.S. Agency for International Development’s (USAID) “lifesaving and strategic aid programs,” the abrupt withdrawal of the world’s largest donor has caused severe disruptions over the past three months. Vulnerable communities dependent on this aid – particularly for infectious disease treatment, food security, clean water, and education in conflict zones – now face heightened uncertainty and hardship.
As USAID funding shrinks and global donor priorities shift, African nations find themselves facing a critical juncture. For decades, USAID has been a lifeline for sectors like healthcare, agriculture, education, and governance across the continent. But the era of aid abundance is waning — and African governments must now decide whether to step up, or risk seeing essential services and development programs fall into decline.
Warning signs are clear
From HIV/AIDS programs in Kenya to food security initiatives in Ethiopia, the fingerprints of USAID are everywhere. Yet recently, a combination of U.S. political gridlock, growing isolationist sentiment, and shifting geopolitical interests has translated into delayed disbursements and budgetary cuts. For instance, 2024 saw several USAID-supported programs in Sub-Saharan Africa suspended or downsized due to federal budget impasses and reprioritized global commitments.
This is not a one-off. It is a trend – and the time to react is now.
Dependency Dilemma a ticking time bomb
Africa’s overreliance on foreign aid, while understandable historically, is increasingly unsustainable. In some countries, donor funding still accounts for up to 70% of public health expenditure. The risks of this model are now manifesting. When external partners pull back, programs collapse. This is not just a fiscal problem – it’s a governance and sovereignty issue.
African governments cannot continue outsourcing essential service delivery. The USAID gap presents an urgent but necessary wake-up call.
Domestic resource mobilisation no longer optional
To mitigate this financing gap, countries must move aggressively toward domestic resource mobilisation. This means widening the tax base, cracking down on illicit financial flows, digitising public finance systems, and ensuring greater transparency and accountability in budget allocation.
Rwanda’s approach offers useful lessons – leveraging digital systems and performance-based budgeting to optimize internal revenues and development spending. Kenya, too, has seen success with its eCitizen platform, which digitised thousands of government services and expanded fiscal reach.
While domestic resource mobilisation is no silver bullet, it is the most sustainable pathway forward.
Countries must combat corruption through transparent governance and stronger institutions and also diversify economies to reduce reliance on volatile commodity exports.
Prioritise, reallocate, protect
Aid dependency often masks inefficiencies in public spending. Governments must also reassess spending priorities. That means reducing leakages from wasteful expenditures – including bloated bureaucracies and vanity infrastructure – and ring-fencing budgets for high-impact sectors like primary healthcare, education, rural development, and women’s economic empowerment.
Regional blocs such as the African Union and ECOWAS must step up as conveners of joint financing strategies, including pooled funding for cross-border initiatives once backed by USAID.
Improving public financial management
Governments must therefore enhance budget transparency to ensure funds reach intended projects as well as cut wasteful expenditures (e.g., excessive government spending on non-essentials). They should further strengthen public-private partnerships to attract investment in infrastructure and health.
Investing in homegrown solutions
Rather than waiting for donor-driven programs, African governments should boost local agricultural production to reduce food import dependency and also expand intra-African trade under the AfCFTA to stimulate economic growth. They must also prioritise education and R&D to foster innovation and reduce brain drain.
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Leveraging alternative funding sources
If traditional aid declines, Africa must explore diaspora bonds to tap into remittance flows that are estimated to be over US$100 billion annually. The continent must also delve into green financing for climate-resilient infrastructure as well as seek South-South cooperation with emerging partners like India, Turkey, and the Gulf states.
Call for innovation and philanthropy
It’s not just about plugging the gap – it’s about transforming the model. African innovation ecosystems, from fintech to agritech, have already shown they can deliver social impact at scale. Governments should partner with local innovators, invest in impact-driven ventures, and unlock capital from African high-net-worth individuals and emerging philanthropists to replace traditional aid channels.
Private foundations, diaspora investors, and sovereign wealth funds can all play a part in reshaping Africa’s development financing model – if given the right enabling environment.
Agency and Urgency
This is a moment of reckoning. The USAID slowdown is not just a funding crisis – it’s a test of leadership and long-term vision. If African governments want to assert agency over their development futures, they must treat this as an opportunity to restructure, reimagine, and rebuild more resilient financing models rooted in local ownership.
Because when aid begins to wane, only strong domestic commitment can fill the void.
What do you think? Should African governments move faster to reduce aid dependency, or is foreign assistance still indispensable? Share your views on our Social Media channels.
