Is the loss of aid an opportunity for Africa?
US and EU aid cuts could prompt Africa to end its dependency, but the task for poor countries will be especially difficult.
United States (US) President Donald Trump’s administration has wrought havoc across Africa and beyond by abruptly dismantling the multibillion-dollar US Agency for International Development (USAID). This has terminated countless development projects and put millions of recipients at risk.
The cuts are difficult to quantify because of the chaotic way the US has gone about them. But 5 341 USAID programmes worth US$75.9 billion have been wiped out, says Devex – an independent news organisation covering development issues, quoting a leaked USAID document. Some 898 programmes, worth around US$78 billion, remain. Devex says the US State Department also lost 2 100 aid programmes totalling US$4.6 billion.
Jakkie Cilliers, Head of the Institute for Security Studies’ (ISS) African Futures and Innovation (AFI) programme, summarised the possible global impact. Drawing on various sources, he noted: up to 18 million additional cases of malaria yearly; a million cases of severe and potentially fatal childhood malnutrition; 600% more HIV infections; and a spread of famine as US$489 million of life-saving and life-sustaining food assistance is at risk of spoilage, delay or diversion.
What has largely been ignored is that several EU states are also cutting their aid budgets
In Africa, AFI’s modelling estimates there could be about 5.6 million more extremely poor people by 2026, and the overall African economy could shrink by about US$4.2 billion by 2030. The impact on HIV/AIDS in Africa would be immense because of cuts to the President’s Emergency Plan for AIDS Relief (PEPFAR).
Cilliers notes that US official development assistance represents about 30% of the global total while the European Union (EU) contributes about 42%. And what has largely been ignored is that several EU states, including France, Germany, Netherlands and Belgium, are also cutting their aid budgets. So are the United Kingdom and Switzerland, by about 25% each.
This is mostly because in an increasingly perilous world – and particularly because Trump is threatening to withdraw US support from Europe just as it faces a greater threat from Russia – Western countries are diverting development aid to defence.
‘Europe is restructuring its development aid, shifting from traditional grants to investment-driven funding while cutting budgets and [prioritising defence], raising concerns about the future of global development,’ according to Devex.
African countries have been slow in determining how to fill the gaping holes in their development budgets, including finding ways to increase domestic revenues by for example more efficient tax revenue services.
South African President Cyril Ramaphosa last week acknowledged that America’s decision to slash PEPFAR, which contributed 17% of South Africa’s cost of fighting HIV/AIDS, was a ‘wake-up call’ to his government to fund that 17% itself.
The absence of democracy aid could entrench authoritarian leaders and provoke political instability in Africa
However, GroundUp and Spotlight noted that the crisis had erupted in January, yet it took South Africa’s Health Department until 3 March just to meet with USAID implementing partners in the country. And no money had yet been allocated to fill ‘the massive hole left by PEPFAR cuts which are estimated to result in hundreds of thousands of deaths over the next [decade].’
Others see this as Africa’s chance to change its relationship of dependency on donor countries – as Kenyan satirist and commentator Patrick Gathara did in a Resistance Bureau webinar last week on ‘Africa After Aid? The Impact and Possibilities’.
He lamented that the aid cuts discourse had largely been ‘a return to the old narrative of the hopeless continent that is incapable of taking care of itself without the help of good-natured westerners.’ Instead, Africa was a net creditor to the world and donor countries earned US$7-US$8 for every dollar they spent on aid, he said.
Gathara suggested that other African countries learn from Kenya, where young people especially protested last year against President William Ruto’s attempt to raise taxes. They demanded he balance the books by tackling corruption and excessive government spending instead.
Nic Cheeseman, University of Birmingham Professor of Democracy, agreed that the yawning gap in aid revenues would have to be filled by increasing public pressure on governments to be more accountable, shifting revenues away from corruption towards delivering services. He told the webinar that South Sudan, for example, spent a tiny percentage of its budget on providing healthcare, relying on the US to fund about 60-70% of it.
However, Cheeseman said that channelling that pressure was a problem, particularly as the aid cuts were also defunding civil society organisations pushing for democracy and good governance.
Cilliers said USAID had been a major funder of programmes to strengthen democratic institutions, human rights and governance across Africa. This sector would be one of those most affected by cuts, as over 90% of the USAID and State Department funding for this work was being abolished.
He said the absence of democracy aid could entrench authoritarian leaders and provoke political instability in Africa, making African countries more susceptible to the influence of undemocratic countries like China and Russia.
Cheeseman thought countries like the United Arab Emirates and Saudi Arabia would partly fill the vacuum in development financing. ‘So the new game might prove more problematic from the [viewpoint] of an African Renaissance,’ he said. Meanwhile, the US would be ceding a tremendous amount of soft power, including policy influence, to these other countries.
Cilliers told the webinar that AFI research showed that the levels of democracy in many African countries were higher than expected, given development levels. He attributed some of that ‘democratic surplus’ to conditionalities and the pro-democracy efforts funded by Western aid agencies.
Official development assistance ‘is the form our international cooperation took in the 1960s and 50s,’ French Development Agency CEO Rémy Rioux told Devex. ‘What will happen now is just consistent with what the world has become, and we need a new architecture. We need to turn from assistance to investment – sustainable, inclusive investment.’
Trade and private investment won’t solve Africa’s development challenges, especially for the poorest countries
However, Cilliers cautioned those now celebrating the end of aid dependency in Africa that it wouldn’t be easy for trade and private investment to solve the continent’s development challenges, especially for the poorest countries. He said Africa’s 22 least developed countries commanded only about 0.4% of global trade, and its 24 low- to middle-income countries enjoyed only around 1%.
‘Expecting these countries to trade their way out of poverty is at best a multi-generational project,’ he noted. ‘Large multinationals don’t invest in poor countries. Neither with global philanthropy nor funds from the diaspora will [Africa] be able to fill the hole that is being left. Africa is increasingly on its own but its financial independence comes with a price.’
Perhaps the only bright spot is that some gaps from USAID will be filled by European countries using the opportunity to leverage their own soft power as tensions and competition with the US intensify.
For all its manifold errors and challenges, European aid has traditionally been more transparent and based on political and policy dialogue compared to that from the US.
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