As African nations navigate their development trajectories, they face a host of challenges, particularly amid a decline in global development assistance. This reduction stems largely from shifting global economic conditions, evolving political priorities, and rising geopolitical tensions that influence both donor and recipient countries.
Over the years, development aid has supported key sectors such as infrastructure, healthcare, food security, and socio-economic development. A reduction in funding, therefore, directly threatens progress in these areas.
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According to the World Bank Group 2020 statistics on net official development assistance in Sub-Saharan Africa, the region received $66.97 billion, from $597 million in 1960. However, the 2022 numbers showed a decreasing trend to $59.73 billion.
Most of the assistance received came from the U.S. With the current administration announcing deep cuts in dollars spent on international assistance, many African countries are left limping. The reduction of aid presents a threat to sectors that most benefited from the aid, including education and healthcare, among others.
According to the report by the Organisation for Economic Co-operation and Development (OECD) Development Aid Committee, despite a temporary spike in official development assistance (ODA) during the COVID-19 pandemic, recent figures show a reversal.
In 2019, total ODA amounted to $168 billion to a record $223 billion in 2023. But in 2024, for the first time in five years, there was a decline of 7.1 per cent to $208 billion.
“The real catalyst behind the cutbacks this year was the major reduction in ODA announced in early March 2025 by the new US administration, amounting to a 53 per cent cut to USAID programmes,” said Andrew Mold, Director of the UN Economic Commission for Africa (ECA) Regional Office for Eastern Africa.
Other major donors followed the US’s path. The United Kingdom (UK) announced plans to reduce its ODA from 0.5 per cent of gross national income(GNI) to 0.3 per cent by 2027.
The Netherlands announced in March that it plans to cut €2.4 billion, about a 40 per cent reduction in its development cooperation.
“There seems to have been a bit of a snowball effect. In the minds of the European donors, no doubt, is their desire to rachet up spending on defense, in the light of the ongoing Russian-Ukraine conflict,” Mold weighed in.
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Assistance decline timing
Africa contributes approximately 3 per cent of the world’s gross domestic product (GDP), a number that the continent has struggled to surpass over two decades.
Angelo Musinguzi, Senior Manager at KPGM, indicated that the continent still struggles with access to finance, maintaining that the decline in development aid only came at a time when countries needed it the most.
“The decline will significantly affect the development of these countries, especially the sub-Saharan African countries. It will impact infrastructure development and social welfare, thus leading to poverty,” he noted.
Mold also shares the same concerns, citing that in the sub-Saharan region, with the USAID cutbacks, DR Congo and Ethiopia are among the countries that will feel hardest hit, each set to lose $387 million in USAID funding.
He further explained that Uganda faces a cut of over $300 million, representing a two-thirds cutback in the USAID country programme.
“These are the first cutbacks to become apparent. But with other countries announcing cutbacks, I think the fear is that this is just the thin end of the wedge, with more cuts to come,” he added.
Mold observed that non-governmental organisations (NGOs), as well as governments dependent on US financing, are the first to be hit.
“Health spending is the most impacted sector, by far, with US cutbacks being most marked in areas like family planning and reproductive health, maternal and child health, among others,” he said.
The African Development Bank Group and African Development Institute report shows that African countries experienced a 14 per cent drop in government revenues in 2020.
At the same time, government spending increased by 1.2 percentage points of GDP, worsening the fiscal position. The report highlights that this combination of rising spending and falling revenue-to-GDP ratios further weakened public finances across the continent.
Musinguzi noted that the decline in development funds would slow business activities and related investments, impacting employment, reducing socioeconomic development, and increasing disease and health issues, “to the worst, may lead to political unrest in some countries if the youth are not employed.”
Wake-up call for Africa
Some countries in Africa had their economies dependent on aid, however, this could be a wake-up call for African governments to explore self-sustaining development models.
“The reduction in aid will act as a curtain raiser, where African countries will be able to think about improving domestic revenue collection and management. This will, however, be in the long run,” Musinguzi explained, noting that it is time for governments to strategise in developing home-grown solutions.
Mold echoed similar views, highlighting some bright spots in the continent’s financial landscape.
“Regional remittances have been quite buoyant, export performance was fairly strong in 2024, and some countries have been doing quite well in attracting more FDI(Foreign Direct Investment),” he said, citing Rwanda and Uganda as examples.
“But it is ultimately governments that will need to improve their capacity to mobilise domestic resources to pay for increased spending in the areas previously supported by donors,” he said. “That will be quite a challenge in the current juncture. But at least the hard-budget constraint will help focus attention on the need to strengthen government finances.”
Mold also emphasised the need for African countries to fast-track the implementation of the African Continental Free Trade Area (AfCFTA), especially following the US announcement of higher import tariffs, including on African goods.
