U.S. seals USAID's fate as State Department takes over foreign aid — what it means for Africa

Business Insider

6 days ago

After months of uncertainty, the U.S. government has officially dissolved the U.S. Agency for International Development (USAID), transferring all foreign aid programs to the State Department.
The U.S. government has dissolved USAID, transferring its operations to the State Department starting July 1.
This decision marks a significant shift in U.S. foreign aid strategy, especially impacting initiatives in Africa.
Experts emphasize the need for sustainable partnerships over reliance on foreign aid to support Africa's long-term development.
The move, announced Tuesday by Secretary of State Marco Rubio, takes effect July 1 and represents a major shift in U.S. global engagement, especially in Africa, where USAID has been a key development partner.
Rubio defended the decision, stating, 'This era of government-sanctioned inefficiency has officially come to an end. Under the Trump administration, we will finally have a foreign funding mission that prioritizes national interests… USAID will no longer implement foreign assistance. Programs that align with administration policies will be handled by the State Department—with more accountability, strategy, and efficiency.'
The overhaul follows President Donald Trump's January 20 executive order pausing foreign aid for 90 days to assess its alignment with U.S. interests.
By March 10, Rubio had canceled 5,200 USAID contracts—roughly 83% of its portfolio—leaving the State Department to manage the remaining 1,000.
Before its shutdown, USAID operated in over 100 countries with more than 10,000 staff and was widely credited with advancing education, health, food security, and crisis response particularly across sub-Saharan Africa.
Its closure now leaves a significant gap in global development efforts.
What this means for Africa
While Rubio indicated that certain 'high-priority' programs would continue under the State Department, he did not specify which regions or sectors would be prioritized.
For now, African nations that have relied on USAID support for decades are left bracing for the fallout of a major geopolitical and developmental shift.
The dismantling of USAID poses serious challenges for Africa, where the agency has been a major external funder of health care, education, food security, and governance programs. In 2024 alone, USAID delivered $6.5 billion in humanitarian aid to the region, less than 0.1% of the U.S. federal budget.
In the 2023 fiscal year, U.S. foreign assistance directed $10.6 billion toward HIV/AIDS programs and $1.5 billion to combat Ebola, malaria, and tuberculosis, most of it in Africa. Programs like malaria prevention in Nigeria and Uganda, agricultural resilience in the Sahel, and civil society support in Sudan now face uncertainty.
Beyond health, USAID helped drive job creation and trade. Under the African Growth and Opportunity Act, its East African Trade and Investment Hub enabled $600 million in exports and created over 40,000 jobs between 2014 and 2019.
Through Feed the Future, USAID also cut rural poverty in Uganda by 16% between 2010 and 2013.
While the U.S. has not ruled out aid for Africa entirely, experts warn that the State Department may struggle to maintain continuity without a clear transition plan. The abrupt closure risks delays, funding gaps, and the collapse of critical programs without USAID's established infrastructure.
Does Africa need aid or partnership?
As traditional donors like USAID scale back, the question of whether Africa needs aid or partnership has become more pressing.
While foreign aid has helped in emergencies and basic development such as health care, food security, and education, it often fosters dependency and fades once funding ends.
Since 2018, aid to Africa has steadily declined as donors shift priorities. Germany, France, and Norway have all cut funding in the past five years, while the UK reduced its Overseas Development Aid from 0.7% to 0.5% of gross national income in 2020.
Meanwhile, African governments spend less than 10% of GDP on health—just $4.5 billion in capital expenditure falling far short of the $26 billion needed annually to meet growing health demands.
With foreign support shrinking, Africa must urgently expand domestic financing to sustainably fund its development needs.
What Africa increasingly needs are equitable partnerships built on trade, investment, and shared interests. Initiatives like Feed the Future and the East African Trade Hub show how collaborative efforts can boost exports, create jobs, and reduce poverty.
This was evident in the appeal made by African leaders at the recently concluded 17th U.S.-Africa Business Summit in Luanda, where they urged the U.S. to direct its investments toward human capital and infrastructure development.
During the summit, Angolan President João Lourenço called for a new chapter in U.S.-Africa relations, urging an end to aid dependency in favour of partnerships built on investment, innovation, and mutual respect.
'It is time to replace the logic of aid with the logic of ambition and private investment,' he stated. It is time to see Africa as a credible partner rich in potential, in need of financial capital and know-how, and eager to join forces for mutual benefit,' he added.