• AFRICA
• AID

Western aid cuts reshape the geopolitical landscape

As western countries slash aid budgets, China, Turkey and the Gulf States step up the competition for soft power and commercial advantage

The 90-day freeze on almost all United States aid imposed on 20 January by President Donald Trump, together with swingeing cuts in assistance by other rich western economies, will have immediate socio-economic effects and may also drive radical political change in several developing economies as governments struggle to replace the funds and expertise (Dispatches 28/1/25, Rubio deals hammer blow to US aid).

Trump’s decision to freeze most US aid spending – Washington spent over $8 billion in aid for Africa in 2024 – will hit the poorest countries hardest and has left healthcare systems across the continent trying to bridge vast funding gaps.

The shuttering of USAID could offer an opportunity for rival powers to increase their aid and reap the diplomatic benefits and influence that such soft power brings. Total aid budgets peaked at over US$230bn in 2023 – that is likely to be a high-water mark. Equally important as the volume of aid will be its scope and intention. Countries such as China, India, Saudi Arabia, South Korea, Qatar, Turkey and the United Arab Emirates have been stepping up aid programmes but in ways that are far more targeted to their commercial and geopolitical interests. That is emerging as a new model for international aid programmes – both for the new class of aid-giving states and for those western economies that are continuing with their longer established aid programmes, albeit much reduced in scope and volume. 

Sympathetic rhetoric has come from China and the European Union to developing economies – but neither are going to plug the aid gap left by the US. Officials in Brussels have said that they will, where possible, bring forward payments to partners facing cash flow crises. 

The reality is that the Trump administration is taking to an extreme what other western countries, particularly in Europe, have been doing to their aid budgets.

Germany, the second-largest Official Development Assistance (ODA) provider, has cut over €4.8bn ($5.3bn) of its core development and humanitarian assistance since 2022.  

Cuts all round
Similar deductions to 2024-2025 ODA budgets are being made by Europe’s other main aid givers. France plans to cut over $1bn this year and Britain had budgeted to cut the aid budget from £15.3bn ($19.6bn) in 2023 to £13.3bn before Prime Minister Keir Starmer announced that the government’s aid budget would be slashed from 0.5% of gross national income (GNI) to 0.3% by 2030 to help pay for major increases in defence spending. Starmer’s move, which means that British aid in 2030 will have been more than cut in half since 2020, prompted the resignation of Development Minister Anneliese Dodds (Dispatches 1/11/22, Ukraine costs hit Whitehall aid budget). And almost half of Britain’s aid budget will be spent domestically, accommodating asylum seekers. 

Others such as Sweden and the Netherlands are also planning cuts. The Netherlands in February set out plans to cut its annual development budget by €2.4bn from 2027, reducing the total budget from €6.1bn to €3.8bn. This will cut Dutch aid spending as a percentage of GNI from 0.62% in 2024 to 0.44% by 2029. The conservative government in The Hague will make the deepest cuts to climate and gender equality programmes. Like the European Union’s common budget, and a raft of national spending plans, the Dutch plan to increase aid spending on migration control, including potential agreements with individual countries on repatriation and returns. 

‘The consequences will be especially devastating for vulnerable people around the world,’ says United Nations Secretary-General António Guterres, adding that the cuts will ‘make the world less healthy, less safe, and less prosperous’. 

When support from regional and international financial institutions and multilateral bodies such as the UN agencies is included, the US provides up to 26% of all aid to Africa. That includes multi-country initiatives such as the President’s Emergency Plan for AIDS Relief (PEPFAR), the President’s Malaria Initiative, Feed the Future, Power Africa and Prosper Africa. The latter programme was set up during Trump’s first presidency and aimed at stimulating private sector investment in Africa by US businesses. 

These cuts will leave African governments facing major budget holes for healthcare, agriculture and education spending. At $1.35bn, Congo-Kinshasa was the biggest single recipient of US aid last year: $866 million of that was in ‘emergency response’ funding, $427m of which was spent via the UN World Food Programme. 

South Sudan is likely to be the region’s next biggest loser: $600m of the $726m Juba received last year was in emergency aid from the US, though it is unclear how much that will be affected since the Trump administration has stated that emergency food aid will be continued. However, civil society groups report that funding has already run out for programmes assisting refugees fleeing conflict in neighbouring Sudan. 

In Somalia, meanwhile, the only state in the region that does not receive significant health or HIV funding, $368m of the $546m it received from the US in 2024 was in emergency response aid. Some of that could survive but it will lose $45.3m in US funding for agriculture and $17.5m for basic education. 

Among the East African Community and Southern African Development Community states, cash for HIV/AIDS programmes typically accounts for over 50% of total aid.  

Despite being one of the continent’s wealthiest countries, South Africa received $323m in aid from the US, of which $220m was for HIV/AIDS and $43m for basic healthcare. 

There are a few exceptions. Malawi received $237m from the Millennium Challenge Corporation for road infrastructure. Though the fate of the MCC, which focuses on infrastructure projects, is also unclear, Nepal, another MCC partner country, has reported that its payments from Washington, as part of a compact worth $500m, have been suspended. For Malawi, comparable losses would represent a major hit far outweighing the shock of losing the $85m for HIV/AIDS that it received last year. 

The political consequences of the aid cuts and the potential loss of ‘soft power’ for rich countries are already starting to be seen. Jakkie Cilliers, founder of the Institute for Security Studies, a pan-African think-tank, warns the cuts will prompt an increase in anti-US sentiment across the continent.  

They will also hurt African economies as part of a cascade effect of lost funding and jobs linked to USAID.  

The cuts will also offer a convenient excuse for many African governments cutting public services. In East Africa, the biggest regional recipient of US aid, Kenya’s Social Health Authority has reclassified HIV/AIDs and TB drugs as ‘pandemic’ rather than ‘chronic’, meaning that patients will now have to pay for them. Funding for HIV/AIDS programmes was the biggest single item of US aid in 2024. 

That has prompted anger and concern among patients’ groups and civil society. However, Health Principal Secretary Harry Kimtai told the National Assembly in Nairobi at a hearing on 19 February that the government faces losses of Ksh30.9bn ($220m) for healthcare because of the US aid freeze (Dispatches, 3/3/25, Why Washington’s aid freeze could cost tens of thousands of lives and livelihoods). The implication by Nairobi that reclassifying HIV/AIDS and TB drugs was not a choice but an imposition is at best a half-truth – but a sign that governments will be quick to blame Washington. 

In South Africa, the head of the Desmond Tutu HIV Foundation, Linda-Gail Bekker, has warned that the USAID cuts could result in more than 500,000 deaths over the next decade from HIV/AIDS. President Cyril Ramaphosa has said that ministers are ‘looking at various interventions to address the immediate needs and ensure the continuity of essential services’.

Copyright © Africa Confidential 2025
https://www.africa-confidential.com