Sub-Saharan Africa: Facing the fallout of US aid suspension

Event

The executive order on ‘Reevaluating and Realigning United States Foreign Aid’ was one among many signed by President Donald Trump in his first weeks in office, but it stands out due to the far-reaching implications that it has had on US foreign policy. The Office of Inspector General stated that: “On January 24, 2025, the Secretary of State ordered a pause in all new obligations of foreign assistance funding pending an 85-day review of United States foreign assistance programmes. The Secretary additionally ordered contracting and grant officers to issue stop-work orders for all existing foreign assistance awards. As such, all USAID programmes were suspended, including those with funds already obligated and disbursed.”

According to its own data, the USA spent USD 68 billion on international aid in 2023, spread across several departments and agencies. Among these, the United States Agency for International Development (USAID) is the largest, with a budget of USD 40 billion. The USA is the world's biggest spender on international development, though international aid only corresponds to around 1% of government spending and 0.25% of gross national income (GNI), significantly lower than the UN’s 0.7% target. Despite the limited budgetary economisation, the assault on Official Development Aid (ODA) will result in reputational damage, loss of American soft power in low-income countries and an erosion in capacity to deal with global problems that have the tendency to spill over across national borders such as pandemics, refugee crises, security risks, terrorism, etc.

The USA’s ODA spending is allocated to a diverse range of recipients: in 2023, Ukraine, Ethiopia and Jordan were the top three bilateral destinations for official net flows, according to the OECD. Sub-Saharan Africa is often the largest regional recipient of US aid, regularly receiving 35%-40% of non-humanitarian assistance provided by the USA worldwide, and over the past decade, State Department and USAID assistance allocated for Africa has generally fluctuated around USD 8 billion annually (in inflation-adjusted dollars). Nigeria, Mozambique, Tanzania, Uganda, Kenya and South Africa were all in the top 10 recipients of non-emergency aid allocations in 2022, according to an overview by the Congressional Research Service.

Impact

It is estimated that the USA represented about 40% of the world’s humanitarian aid spending, meaning that the most pressing issue confronting the rest of the world today is saving those lives at risk due to the enormous fallout on immediate humanitarian spending. The USA does not generally provide direct budget support to countries in Sub-Saharan Africa; instead, most US aid is administered through programmes managed by US-based contractors, non-governmental organisations and multilateral organisations. Because of this, the direct impact of the decline in USAID funding is unclear and difficult to compute on a country-by-country basis.

The importance of ODA also varies enormously by destination country. For the Central African Republic, ODA made up 27.2% of GNI in 2022, whereas for South Africa, this figure was only 0.3%. Somalia and Mozambique will likely be some of the most impacted countries, as ODA made up an important part of GNI in 2022 (19.1% and 14.7%, respectively), while these countries were also some of the biggest recipients of US ODA specifically (USD 1.2 billion to Somalia and USD 664 million to Mozambique). In countries such as Zambia, the Democratic Republic of Congo or Uganda, ODA also provides significant amounts of support, and each of these countries received more than USD 500 million from the USA in 2023.

Governments of recipient countries will need to decide to what extent they will take over the services provided by US aid actors, but they have been left with an unenviable choice: failing to provide health services could impact their legitimacy, while increasing spending on public health services will be challenging for countries already facing concerns with regards to debt sustainability. The World Bank estimated that the ratio of debt service to public revenue for Sub-Saharan Africa was 34% in 2023, reflecting a heightened risk of public debt default. Other traditional donor countries are not likely to fill the void, as fiscal constraints and weakening political support for international solidarity have been putting aid budgets under pressure. On the other hand, new donor countries such as China, India, Russia, the United Arab Emirates, Türkiye and Saudi Arabia might step up their engagements – those countries represent a growing share of global aid flows, driven by geostrategic and commercial objectives. Moreover, with global aid flows being increasingly targeted towards humanitarian crises, as well as climate and refugee costs, aid for poverty reduction at country level has declined considerably. Recipient countries are also increasingly opposed to the continuation of a system that fosters vulnerability through aid dependency. Therefore, a shift in the architecture of global development support appears to be irreversible.

Analysts: Louise Van Cauwenbergh – l.vancauwenbergh@credendo.com and Jonathan Schotte – j.schotte@credendo.com