Data modelling reveals heavy toll of USAID cuts on Africa

Since returning to office in January, US President Donald Trump has signed more than 73 executive orders, many of which can be considered an assault on the rule of law and separation of powers in the United States, an attack on the country’s former Western allies, and on the liberal international order more generally. Most important for Africa, is his move to gut US development assistance and walk back efforts to fight corruption.

Following the 20 January executive order on Reevaluating and Realigning United States Foreign Aid, USAID started distributing Notices of Suspension, instructing recipients to stop working on awards and not incur any new costs.

Subsequently, emergency food assistance and administrative expenses necessary to administer it were exempted by a 90-day waiver, as was life-saving humanitarian support to several countries, including the Central African Republic (CAR), Chad, South Sudan, Democratic Republic of the Congo (DRC), Uganda and Rwanda.

In line with the Republican Party’s war on diversity, equity and inclusion (DEI), all activities related to abortions, family planning, gender or ‘DEI ideology programmes,’ transgender surgeries and other non-life saving assistance are specifically excluded from the waiver.

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The effect on Africa is considerable since spending on health is the largest component of US aid to Africa. HIV/AIDS prevention and treatment projects are readily categorised as part of support for family planning, which has been under attack by successive Republican administrations for several decades. On 26 February, US President’s Emergency Plan for AIDS Relief (PEPFAR)-funded HIV organisations were notified by the US government that their financial support had been terminated permanently, with immediate effect. Other USAID-backed health programmes were also closed for good, such as the United Nations Programme on HIV/Aids.

Other funding from the US supports agricultural productivity and economic growth, bolsters security, promotes democracy, human rights and governance, and improves access to quality education and social services. All of this is now under threat.

For all its detractors, aid remains important for many poor African countries. In 2023, total overseas development assistance (ODA) from OECD countries to Africa amounted to US$59.7 billion, more than a quarter of which is provided by the US.

Modelling using the University of Denver’s International Futures forecasting platform finds that 5.7 million more Africans would fall below the $2.15 extreme poverty income level in the next year if Trump’s administration succeeds in its aid-reduction ambition.

And by 2030, a cumulative total of almost 19 million more Africans would be considered extremely poor when compared with a business-as-usual scenario. The numbers differ by country, of course, with the DRC, Ethiopia, Somalia, Niger, Uganda and Tanzania being most affected given their large populations. By 2030, the economy of sub-Saharan Africa will also be US$4.6 billion smaller.

Given its outsized role in the provision of humanitarian assistance (the US is the largest provider globally), mortality amongst internally displaced and refugee populations will increase dramatically.

The reason for these alarming numbers is the huge role played by US aid. When support from regional and international financial institutions and multilateral bodies such as the United Nations agencies is included, the US provides up to 26 per cent of all aid to Africa. That would include multi-country initiatives such as PEPFAR, the President’s Malaria Initiative, Feed the Future, Prosper Africa and Power Africa.

In the scenario that was modelled, aid to Africa was reduced by 20 per cent (from the 26 per cent provided by the US) on the assumption that some aid will survive the cuts. But even then, the impact is still massive given the enormous spread of US assistance.

All African countries except Eritrea received aid from the US in 2023. Ethiopia was the largest recipient of USAID funds, receiving more than $1.7 billion. Other large recipients of economic development support from USAID were Somalia, DRC, Nigeria, Kenya, South Sudan, Uganda, Mozambique, Tanzania, South Africa, Zambia and Malawi – each of which received more than $400 million in 2023.

Exasperated by the apparent limited effects of aid, and concerns about corruption and dependency, most donors argue for trade, not aid, and push for private-sector engagement as an alternative. The problem is that foreign direct investment (FDI) does not come to low-income countries that generally also trade little.

We tested this again by modelling the extent to which increased FDI of the same volume can offset the impact of the US aid reduction, but found no evidence. In fact, for most poor countries, more FDI tends to increase inequality and poverty in the short and medium term given the benefits that accrue to skilled rather than low-skilled labour. Eventually, things change, but it takes a long time and requires a suite of policies.

Meanwhile, USAID has paused much of its funding, started laying off most of its employees and moved the remainder into the State Department. USAID staff posted overseas have been given 30 days to return to the US, after which they have to cover their own expenses.

Mr Trump and Elon Musk want to reduce the number of USAID staff to 300, enabling only a very small number of projects and disbursements – even if former employees were brought back as consultants to manage the subsequent administrative nightmare.

A number of Mr Trump’s executive orders are being challenged in court. Several are unlikely to withstand judicial scrutiny, including that on USAID since the agency was established by an act of Congress and is now being dismantled by Presidential decree. Last week a US district court judge issued a temporary restraining order challenging the USAID staff cuts, only for that to be overturned by a federal judge.

The US is not the only country cutting back on aid, but the speed and size are unprecedented. Domestic budgetary pressures have led other key donors, like Germany, the second-largest provider of ODA in absolute terms, to cut more than €4.8 billion ($5.3 billion) in development and humanitarian assistance between 2022 and 2025 with additional reductions likely.

Similarly, France reduced its 2024–2025 ODA budget by more than $1 billion, while the United Kingdom cut more than $900 million after almost £1 billion ($1.28 billion) was diverted to housing asylum-seekers in the country.

Compared to these more gradual reductions – which are themselves hugely problematic – the deep and hurried cuts in US aid to Africa will seriously damage attitudes toward the US, increase poverty and reduce economic growth. China may cheer at the damage the US is doing to its standing in Africa, but African people won’t.

Instead of dismantling USAID, the Trump administration would have been better served by aggressively implementing the localisation strategy started by outgoing USAID administrator Samantha Power. This strategy envisioned 25 per cent of monies spent going to local organisations instead of US consultants and intermediaries. Only 9.6 per cent was thus spent in 2023, pointing to the extent to which aid is indeed in need of reform.

While Washington rethinks its approach, African governments and institutions must also recalibrate. Strengthening domestic revenue collection, simplifying and harmonising tax regimes, deepening ties with emerging donors, facilitating investment and reducing dependency on volatile commodity exports could help buffer against such geopolitical swings in the future.

READ ALSO: Trump to slash USAIDs foreign assistance budget by 92%

Reforming aid should not mean abandoning it. If US policymakers truly seek to pursue their national interests and counter China in Africa, they must rethink their approach – before the damage becomes irreversible.

A previous version of this article was published in Africa Tomorrow, the blog of the ISS’s African Futures programme.

Jakkie Cilliers, Head, African Futures and Innovation, Institute for Security Studies (ISS) Pretoria

(This article was published by ISS Today, a Premium Times syndication partner. We have their permission to republish).