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This Week in Global Development
What is the impact of aid cuts in Africa?
00:26:55
This week we take a look at a https://www.cgdev.org/blog/aid-cuts-are-not-leading-reforms-sub-saharan-africa, which found that aid cuts have largely failed to spark reform in sub-Saharan Africa. The caveat, though, is that the authors analyzed...
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- [00:00]
A
Foreign My name is Rumbi Chakamba and you're listening to this week in Global Development hosted by myself, Ada Seldinger and David Ainsworth. And I am joined by our Africa reporters. I have Ayanat Mercy and Sarah Jerving who are joining me for the call today. It's so great to have you guys. So this is part of our Africa team here. All three of us are based in Africa. And because of that, this week we're going to dig into how African countries are responding to aid cuts, especially aid cuts from the US So to kick us off, CGD did this really interesting analysis of how African countries are responding to the aid cuts. And just to put a caveat on it, they looked at aid budgets in 2025. So this was right after the cuts. And I think they looked at this in June 2025. So these were the first sort of national budgets rather that came out right after the aid cuts. And they were trying to see if countries have adjusted in any way and, and what adjustments they've made. And I think some of their findings were quite surprising. Overall, they found that countries aren't really looking at raising more revenues but are rather cutting back on spending. And I found this quite surprising. A few countries reference the age the aid cuts and how they're going to affect them and how they're going to affect them economically. But I found it quite interesting that very few countries were looking at how to increase their revenue but rather cutting back on spending. Sarah, what did you find interesting about the CGD report and did anything surprise you in there?
- [01:31]
B
Yeah, it was a fascinating report as you mentioned. And what they, what they did know is that 12 of the 18 countries acknowledged the, the aid cuts in their budget documents. As you mentioned, it was from June 2025, but they only found two countries actually proposing raising revenues to replace lost, lost funding. So that included Sierra Leone where the government spoke about the need to broaden the tax base and improve revenue administration. But they found the most compre response in Tanzania. And Tanzania raised taxes on alcohol, imported vehicles, telecommunications, gaming, rail and air tickets. And then they also propose an import substitution strategy. So they, yeah, as you mentioned, it was kind of more of a kind of trend towards reduced service delivery. But it will be really interesting to see what happens this coming June in the budget documents because a lot has happened in the meantime and there's been, you know, the, the Accra reset was launched last August. So that was after these budget documents came out. So I think we're going to see, hopefully A lot of more kind of practical information in the next budgets.
- [02:48]
A
Definitely. And I think, I guess last year was a bit of a whirlwind because I think people were also quite unsure of what's going to happen with the US and what the final policy is going to be because there were so many changes, so much up and down. So I agree on part that I think the budgets coming out this year will be really, really important. But one country I want us to zone in on and one thing I want our listeners to know is that Devic will be doing deep dives into different African countries and how they're responding to the aid cuts. And one such deep dive that we published today actually is on Malawi. I'll call it Madalito K, who's based in Malawi is on the ground in Malawi and he was looking at how the government has responded. So Malawi is a very interesting case study. I had some notes here that I want to bring up cuz I the statistics in Malawi, very interesting. So first of all, 73% of the country's development projects are funded by donors. 55% of the health budget is externally funded as well. And then Malawi spends, I think it's 90%. I'm looking for the exact figure here. It consumes around 90% of its domestic revenue on the wage bill and statutory obligations. So if you take away development funding, that leaves very little to no money for actual, for actual development projects. So Malawi has been faced with funding cuts from the US and the US was contributing I think around 350 million annually to Malawi and is now faced with these funding cuts in response. It's done what most countries have done. It's raised taxes, it's raised income taxes, it's raised VAT and a whole lot of other and is also introducing other taxes in order to raise their amount. But analysts say this is not enough. And one, it's not enough and two, it's going to affect consumers and citizens who are already hard pressed here. What did you find interesting about the Malawi situation, Sarah?
- [04:47]
B
I think just as you mentioned, it really emphasizes how big the gaps are that these governments have to fill. And this story kind of outlines that. You know, the Malawian government allocated 13.3 million in the 2025, 2026 budget to mitigate impacts of aid pets to the health sector and is working to recruit 6,000 health workers and other other issues as well. But the country is also grappling with inflation and unsustainable debt. And so that creates, you know, just this ongoing tension of what the what the government can actually do.
- [05:30]
A
And also another interesting thing about Malawi, it's one of the countries that's acknowledged that the aid cuts themselves are actually going to affect economic growth. The do the gross domestic product for last year was projected to shrink by 127 million and that's quite a large amount. And that's purely because of the US aid cuts. This is an analysis that they did and CGD highlighted that Malawi is one of the countries that's actually acknowledged that this is actually going to affect the country's gdp. But in terms of responses as well, one thing that a lot of people keep saying is that it's not enough. No matter what the country does, it's very hard to fill in these gaps. Malawi has also signed one of the bilateral health compacts with the US and the thinking is it's going to assist, it's going to help, but it's not nearly enough as it is. The country has cut off 45% of PEPFAR programs. It had achieved the 95, 95, 95 target, which is one of and is one of the countries that have managed to do that. But experts are concerned that these cuts are going to affect that and lead to the country moving backwards. And I think this is a theme that we're seeing a lot of in a lot of different countries that they look at the aid cuts and they risk a lot of wins. I think this is something that you have experienced or went onto the ground to see for yourself in Kenya as well. I know you were on a reporting trip looking at FGM and I think these are probably some of the smaller projects that people don't really consider and look at. When they're looking at things that are cut, you're probably thinking of life saving things like food delivery, health, etc, but there are smaller projects that have also been cut that will have an impact and that probably no one is thinking of funding. What did you discover while you're on the ground in Kenya, Sarah?
- [07:20]
B
Yeah, and also just to kind of bounce off that there's these programs that like might not seem to be life saving from, you know, just looking at them, but they actually do, you know, like supporting like health workers in skill delivery and whatnot. But yeah, as you mentioned. So I've been working on this story on how the foreign aid cuts are impacting efforts to end female genital mutilation. And I traveled to Narak County, Kenya, which is on the border with Tanzania, and I visited rescue homes for girls that are escaping FGM and early marriage. And then also visited health clinics to better understand kind of what's going on in the clinics. So kind of the, the, the legal context is that FGM is illegal in Kenya, but in parts of the countries it's so ingrained in cultural traditions that some families go to great lengths to, to do the, the cutting secretly. And that includes crossing into the border over the Bo Tanzania where enforcement is lax. So one of the focuses of my reporting was on the health implications. So when girls are subjected to FGM and then forced into early marriage, they can become pregnant teenagers and face a series of delivery complications. So one of those is the sparring of the reproductive organs impacts the body's natural elasticity. So that can lead to obstructed labor. So the piece examines how foreign aid cuts have impacted programs to end FGM and kind of focuses in on this UNFPA and UNICEF joint program that works in 18 countries, that includes Kenya. But the program has faced a sharp reduction in resources and that includes funding cuts from the US and the uk but kind of the story also examines that these programs kind of beyond the program specifically targeting FGM aid cuts have also impacted whether there are adequate levels of skilled health workers available at health facilities that can handle delivery complications. And so we have a piece on this coming out in the, in the coming days that looks at kind of what's being done in southwestern Kenya.
- [09:35]
A
And one of the things that I found really interesting about you zoned in on one of the projects that were happening, it's kind of a rescue shelter to say for women who, for girls who have been subjected to cutting or might be subjected to cutting. And it takes in all these girls and there are all these programs that help them with like education, helping them with sponsorship, etc, but funding for that has also been cut. So can you tell us a little bit more about that project in particular?
- [10:04]
B
Yeah, so these rescue, these organizations, the one that we visited was called Mission with a Vision and they, this the girls actually leave their families and kind of it's this legal process for them to be taken in by this organization because they face FGM or early marriage. And yeah, and one of the concerns they have is that there is, you know, they have funding at the moment, but there is a kind of the long term sustainability of funding is in question. And one of the other areas that is having funding cuts is awareness building. And I think one of the big issues in, in the county that I visited is that you really need to get, it's a very patriarchal society and you need to get the men on board. So there's a lot of education campaigns targeted towards men who still believe in the tradition of, of FGM and educating them and getting them on board with rejecting it. And that's this very slow mo process of getting, you know, of convincing people and efforts to, to, to continue that are under threat with aid cuts.
- [11:26]
A
And I think one thing to highlight in that is that it's a slow moving process and I think a lot of times when you have projects like that that require behavioral change etc, they're still moving and you don't see the results immediately. And I think unfortunately because you don't see the results immediately, a lot of people look at it as something that necessary but it's the actually people with who you spoke to were actually saying that's the only way to really have this like systemic change to keep kind of digging away at it.
- [11:56]
B
Yes, donors have to be very patient with this. And one thing that we heard from the organization, mission with a vision is, is that they're kind of, their strategy is really focusing on younger generations because, because the older generation, it's very entrenched in the mind sets to, to keep, continue with fgm. And yeah, so it's, it's very necessary to kind of, I mean the, the SDGs have a goal set for the elimination of FGM at 2030 and that, you know, there's a very little kind of optimism that that could, could happen. So it's really a long term game.
- [12:37]
A
Thanks so much. And I found it like, I found it a little bit inspiring when you spoke to some of the young men there who are like we've w. We've had a friend who kind of led out because of this and because of that I will not do this to my daughter. So it does show that like long term it works.
- [13:01]
C
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- [13:40]
A
But I'm still on Kenya. Another story that we published, and this was last week, was from our colleague David Jangi who was also looking at the impact of aid cuts on Health and how different countries are responding. And the fear that a lot of health experts have is that basically in response to this, countries are going to raise taxes, etc, but it's actually going to. The cost is going to fall on the patient. He had some interesting statistics like, like the cost of condoms in Zimbabwe rose immediately after the aid cuts. Places in Nigeria and Kenya shut down because of the aid cuts. And as a result, patients now have to pay out of pocket in maybe private facilities as an alternative. And then a lot of countries are looking at increasing taxes as a solution. As we spoke about, Kenya actually proposed introducing taxes for the informal sector, which makes up, I think roughly 40% of the population. But that actually brings the cost back to the patient. And people are saying basically patients don't have the money to pay more for their healthcare costs, but this is what's eventually going to happen. Can you tell us a little bit more about David's findings and what you thought of that?
- [14:53]
B
Yeah, I thought David's piece was super interesting because I think it's an angle that sounds very realistic to me that expenses, costs will be transferred on to the patient. Because as kind of we talked about in the other stories is that if there is, if the response is that the governments aren't moving forward with the same level of services, then if a patient is able to go to a private facility or somewhere where they can pay out of pocket. But yeah, it speaks again to the enormous gap that must be filled by governments. And one of the most interesting quotes from that piece was from Daniel Mwai, who's the advisor for Health and Standards at Kenya's Presidential Economic Transformation Secretariat. And he said, kind of on that point of government raising funds, he said, quote, that money you're asking for does not exist. And I think that's a huge reality. Then another interesting point that I found in David's piece was he wrote about that kind of, that there hasn't been. The funding gaps for research and development have not been filled over the past year and that could have helped lower public health costs by working to enable the local development of medical products. And he wrote that that's been largely neglected. And I think that's an important point as well.
- [16:20]
A
I also found that. I can't say I loved that quote, but I also found that quote interesting. And I had that highlighted that money does not exist. Where do you expect us to get that money from? And I think that brings me back to Malawi. Malawi is paying more for its debt servicing than it does for both health and education combined. So that money literally does not exist and raising funds seems to be difficult. But I think an interesting angle that's also often overlooked when we look at aid cuts, we look at the loss in jobs, and we usually look at the loss in jobs for u. S. Foreign service officials, but then they were also lost in jobs in african countries for locals. And ayanat, you digged into this in Ethiopia, which had sort of become this development hub where a lot of employees were working there, and they've lost their jobs because of the aid cuts, and they're also struggling to find work which had like a huge impact on them. What were some of your findings when you're digging into this story?
- [17:15]
D
Yeah, absolutely. And this was really the reason why I wanted to look at this because, you know, the conversation has really a bit more about Americans. But yeah, I spoke to one health professional. We agreed to give him a pseudonym, so I'll call him Jonas. And his story really stuck with me. He's a guy who grew up in a rural village. He excelled academically, left home, he built a career in public health in the big city. And he was really like the pride and joy of his whole family, the pride and joy of his village. He sent money back home to support his family, his extended family, et cetera. And he was really a success story, right? And he was working in public health and really proud of the work he did. You know, he was like, I could have gone to something a bit more money making, but I decided to give back. And so then when the stop order order, stop work order came last year, it was really life altering. You know, all of a sudden he kind of. He descended into a really, really sad and depressed state and stress about, how are you going to send money to your family back home? Can he even go back home? He's from a part of Ethiopia that is affected by conflict. And if you go back home when you're or being perceived as being from the big city having money, it makes you a really big target in terms of potential extortion and things like that. And so he was like, barely leaving his bed for several weeks. And, you know, it just really struck. What really struck me is when he said, you know, I was so desperate that I was thinking of leaving Ethiopia for the first time and not obviously on a plane because, you know, you can't just jump on a plane and, you know, had east or whatever. It's, you know, he was like, should I go the red sea route? Should I go through Djibouti? What are my options? He started contacting people to smuggle him. And so this was the level of desperation that people were really experiencing last year. You know, these are people who were really holding their families and communities together. Because one thing that I learned as I was reporting this out is that, you know, if you're the best and the brightest for, you know, this generation, for a couple of generations in Ethiopia, you really go into eight. It's not necessarily the private sector entrepreneurship. So this was really like really, you know, pillars of their community, if you will. And so the, the loss of a job was really devastating for themselves, but also, you know, as a huge weight on their shoulders for, for their families and their communities. And so, you know, we have thousands of people like that because, of course, you know, USAID had around. USAID itself had around 4,500 workers internationally that were, that were, that were foreign, Foreign service workers that were of different nationalities. But the bigger impact was, of course, the people who were contractors working with USAID projects, like this guy was, who lost their jobs as a result of the Stop Work order. And so there's just thousands of staff like this, often in countries where you might be in really precarious economic positions. And so the loss of a job can really mean something like, are you resorting to irregular migratory routes? And so I was, you know, one person who I spoke to said she estimated that probably 70 to 80% of people who lost their jobs last year still don't have jobs in Addis. And she was a really interesting and impressive person who had lost her job herself at Palladium, which had a lot of American contracts. But she decided to make a telegram group for people. And it grew to a couple of thousand people. And this was for people who had lost their jobs. And this was meant to be a resource for them. You know, they can connect with each other, they can share tips, they can share jobs, they can share things like how to write a CV, how to use LinkedIn for work. A lot of these people haven't even really looked for jobs in years and sometimes even decades. So you see people like, trying to help each other out as a community. But, you know, one year on, you know, it's, it's harder and harder to help each other because, you know, as she said, around 80% of people are, are still out of work. So it was a really quite sad and, and unhaunting story. And I think that really, really will change the lives of, of like a, an emerging and stable professional class in lots of capital cities around the world.
- [21:14]
A
I see that happening And I think it's so fascinating that, well, first of all, he was considering the Red Sea route and luckily he did not, glad to say, he found a job. But then these are the African success stories, so to speak, that we're talking about. And this is not people who were unemployed before. These are the success stories. And they are now looking to these extreme measures to find a way out. And I think it's really gonna have an impact in so many C cities. And these are cities that were considered successful in a sense, or great places to find work and jobs, etc. And I think the UN has sort of been viewed like in, in the African perspective, as in like you are working for the un, you've made it, etc, and I think the breakdown of the organization is going to have such an impact on the continent. Well, not complete breakdown, I mean, just reduction in size, let's say, of the organization is going to have such a big impact on the continent. And unfortunately, I don't think there are any solutions in S. Because I think at the moment, people who lost their job, who are working directly for USAID are still struggling to find work. And I think these local, local workers as well are probably going to struggle for quite a bit and maybe have to pivot into a different career. So it'll be interesting to follow those stories and see where they're going. But inat, you are in Ethiopia as well this week and you're following the African Union summit. I'm curious to hear if any of these discussions around the aid cuts are on the agenda and what would you be following at this summit?
- [22:44]
D
Yes, absolutely. So aid cuts will certainly play out in the agenda and I think this will be, you know, we're going to have a lot of conversations about, you know, free trade, for example. That's going to be a big topic of conversation that I'm following really closely and we'll be reporting on. Specifically, we have the African Continental Free Trade Area. That was an agreement that was signed back in 2019 to basically facilitate free trade throughout the continent. It's been, it's, it's going, it's, it exists, but it's still been pretty slow at being implemented. And so I mentioned this in the context of aid cuts because it's like, you know, how can Africa help itself? And one of the ways is that the African continent really doesn't trade with itself very much. There's a huge number of barriers between countries that makes the cost of goods and services really expensive. So this is one major way that people are really resolving to improve the development outlook. And so that's something I'm following closely to see how we are on the rollout and the implementation of this all. Another major topic of conversation this, this year's summit is actually the official theme is water. So there'll be lots of conversations about sustainable water management, how to do climate resilient investments into water. And so that's going to be something that I'm following very closely as well. Another thing that I've seen already crop up, I mean today was really just the opening ceremony, but it has already appeared in a couple of people's statements was this mention that Africa still doesn't have permanent representation on the UN Security Council, which is, I know some that we probably everyone in our community has talked about and heard about quite a lot. But this is something that we can probably expect people to, you know, continue making statements on. I don't know if we'll be seeing something more strong come out of this, but this is already something that came out several times in the opening statement. So I thought that was, that was really interesting. And then lastly, because you know, of critical minerals being like the BINGO Word of 2026 and beyond. One thing that I thought was really interesting was in one of the opening statements today we heard something from Ethiopian foreign minister who mentioned that you global competition for critical minerals has become so high and basically all the world powers are viewing Africa as a site for competition. And he framed this moment as being like a really paramount moment for Africa to be uniting and to cooperating and to beholding each other. Because you know, you know, the thing is that Africa shouldn't be the subject of someone's ambitions. You know, it shouldn't be another rat race to, you know, almost like a neocolonialism. So this was like a common, there was a thread that went through his, his speech, the Ethiopian foreign minister that I thought was interesting like framing the need and the urgency for African cooperation in light of, of this critical minerals race. So those are some of the few things that, that I'll be covering in the coming days.
- [25:29]
A
That's quite interesting. And our colleague Jessie is actually following this critical minerals race and please do follow her on LinkedIn or social media and follow her stories because she's got a series of stories on critical minerals coming out and I find that quite interesting because I owe you also the linked is to the bilateral health deals because I think in the past, sort of like last decade, Africa has been doing a really good job of coming up as a united front, coming up with united policies and approaching all these things as a united front front. But as things are turning to bilateral deals and one on one negotiations, it'll be interesting to see if that united front stays strong, because I hear a lot of people saying this could literally be the second scramble for Africa, and this is our opportunity to do things differently. Look at benefication, look your addition and things like that. But if people are negotiating behind closed doors, it's very difficult to see what's happening within each space. So I think it'll be interesting to see if that unified front stays up. Thank you both so much, and we'll definitely be following your coverage. I think I could talk to you guys for an hour, but unfortunately, we have run out of time. So thank you so much for joining me for this. And we will be on the lookout for how the continent responds. Sam.