The end of foreign aid

This blog originally appeared on the Nguzo Africa website.

The US foreign aid freeze is a wake-up call to the aid industry to find alternatives to sustain their programmes. In this time of crisis, the Trump foreign aid freeze can be a blessing in disguise.

Elizaphan Ogechi, Executive Director, Nguzo Africa

This is the beginning. Not the “in di biningging/beginning” meme of former South Africa President Jacob Zuma’s spelling struggles. It is a real beginning. A new start.

First, a disclaimer: For those who have tested it, USAID funding is heavy, sweet and addictive. Perhaps that is why the devastating impact of this funding freeze is touching raw nerves. There is panic, fear and uncertainty on the suspension of US federal grants and foreign aid shaking the billion-dollar industry that spreads widely in every corner of the globe. In contrast, despite this order and its confusion, we are seeing excitement from ordinary citizens and frontline communities saying that stopping the US aid flow will reawaken community philanthropy and re-ignite people, communities and governments to find alternatives to sustain development programs. Depending on foreign aid is no longer viable.

Despite a humanitarian waiver issued on 28 January 2025 by U.S. Secretary of State Marco Rubio for life-saving humanitarian assistance during a 90-day pause in foreign aid while Washington undertakes a  review, the signs are clear that Trump plans to implement a foreign aid funding freeze.

Rubio defined life-saving humanitarian assistance as core life-saving medicine, medical services, food, shelter, and subsistence assistance, supplies and reasonable administrative costs as necessary to deliver such assistance.

“This waiver does not apply to activities that involve abortions, family planning conferences, administrative costs…gender or DEI (diversity, equity, and inclusion) ideology programmes, transgender surgeries, or other non-life saving assistance,” Rubio’s memo said. The “America First” foreign policy roots out funds that go towards: “Marxist equity, transgenderism, and green new deal social engineering policies.”

That means foreign aid in development assistance is in trouble.

At this time, nobody in the development sector expected the extraordinary disruption of this proposition. We agree that the stakes are high, those in the sector are unsettled, analyzing and looking for immediate and long-term implications of the executive order. It is definite that jobs, livelihoods and lives will be lost.

“People and communities are unsettled and looking for courageous leadership as core tenets of our society, including the role of the non-profit sector, have come under unprecedented threat. At the Council on Foundations (COF), we recognize the gravity of this moment and are steadfast in our commitment to protecting philanthropy and the work you do in communities,” said Kathleen Enright, President and CEO of COF.

This order should not be seen as a surprise, but a catalyzing moment to actualize the campaigns that have been calling for change in the failed aid delivery system. The #ShiftThePower movement has been calling funders to bring communities to the frontline in foreign funding. We have been talking about these aid injustices that communities at the frontline get the last droppings of foreign aid, less than 2%.

The 2016 Grand Bargain that sought to enhance funding to local communities’ organizations has been slow, only achieving less then 17.6% of its targets. There is little to show on the OECD-DAC Panel on Aid Effectiveness. The 2005 Paris Declaration on Aid Effectiveness has failed to strengthen ownership, alignment, harmonization, results management and accountability in development aid to communities.

We have been campaigning against dead aid, tied aid and tired aid. Dead aid dies through government bureaucracies, wastage and corruption. Tied aid is lost through restricted policies, conditions and contractual obligations. Tired aid is a lazy aid that comes late to tick activity boxes with no tangible benefit to communities.

USAID Internal struggles

For many years, USAID has been talking about its commitment to shift funding and decision-making power to the people, organizations, and institutions that are driving change in their own countries and communities. However, this progress has been slow, and the agency has been defending itself that localization also requires systems and culture change across the whole agency. Internal resistance to reforms at USAID has slowed progress to aid effectiveness. Country offices teams have always said that effort of this magnitude will take place incrementally, at their pace.

According to the USAID Localization Progress Report, FY 2023, the percentage of funding going directly to local partners declined from 10.2% to 9.6%, against a target of 25%. The sad reality is that 90.4% of US funding to Africa was spent by contractors, intermediaries, International Non Governmental Organizations (INGOs) and associates to cater for their salaries, administration, consultancy, logistics, workshops and conferences, travels and other nuisances of delivering aid to communities.

We all agree that this aid delivery system in its current form has failed the American taxpayers, their government and communities they serve.

“I saw some people the other day crying that Trump has removed funding. Why are you crying? It is not your government. It is not your country. He has no reason to give you anything. You don’t pay taxes in America. This is a wake-up call for you to say: ‘What are we going to do to support ourselves?’ It is time for us to use our resources for the right thing,” said Uhuru Kenyatta, 4th President, Republic of Kenya.

Way forward

1. Flip the current aid funding model to bring communities to the frontline in aid delivery. Re-engineer the current aid models to address systematic power imbalances and offer new models that amplify the value of humanity, planet and the people. An equal funding that recognizes community power and assets.
2. Ignite and lift up community philanthropy by empowering and changing the mind-sets of people to embrace collaborative local resources as an alternative to dignified development. This is the time to bring back the genuine power of harambee and ubuntu to address Africa’s pressing needs.
3. Increase alternative philanthropy. Encourage individual donors, corporate foundations, philanthropies, businesses and wealthy people in poor countries to increase their giving to fill the gaps that have been left by the U.S.’s aid cuts.
4. Governments who have been dependent on foreign aid should change, take charge of, and deliver, quality public services to their citizens, without depending on donor aid. Government to set laws to repatriate stolen loots from Africa to address the aid gaps.
5. Strengthen and build financial resilience of local organizations through social investments and other avenues to gradually shift donor aid to mutual partnerships for sustainable impact.

Conclusion

It is critical that the changed mind-set of our people, communities, organizations, businesses and government will lift community consciousness, enhance philanthropy, and use our resources frugally to address the immediate and long-term community challenges. This is a transformative moment for the aid industry to transform and be responsive to the needs of the communities. It is time to re-imagine the new international model that serves communities with dignity and respect. We aspire for new aid models that flattens power dynamics, lift communities through equal partnerships, enhance solidarity and facilitate self-determination of people, their communities and our planet.

By: Elizaphan Ogechi, Executive Director, Nguzo Africa