Issue No. 66

The Aid Suspension Fallout

The sudden suspension of US foreign aid is already having major reverberations around the Horn of Africa. Just days after Donald Trump's inauguration for his second non-consecutive term, a sweeping 90-day pause to foreign assistance was announced by the State Department– now led by Marco Rubio. The decision has been ostensibly motivated by an effort to cut 'waste,' end 'woke' programming, and align foreign aid to perceived American interests. Dozens of USAID officials have been dismissed, pulled back to Washington, or placed on indefinite leave. Hundreds of programmes have been suspended, ranging from mine clearance to protecting human rights defenders to elements of HIV/AIDS prevention in sub-Saharan Africa. Only military aid to Israel and Egypt, as well as emergency food programmes, have been exempted. 

It has certainly lain down the gauntlet--marking one of the most violent diplomatic about-turns in living memory. Since World War II, almost without interruption, the US has underpinned the Bretton Woods system and the international development order in the era of Pax Americana, backed by the world's largest economy and military. The US has continued to provide, by some distance, the most significant funding for humanitarian assistance and development programming. For instance, in 2024, the US provided USD 2.49bn to the UNHCR, making up around 20% of the agency's total budget. The Horn, too, is particularly dependent on Washington's funding. The US is the largest humanitarian and developmental assistance provider for nearly every nation in the region, including Kenya, Somalia, and Ethiopia.

Much of this aid may be restored in the coming weeks as the laborious task of reviewing all programmes and whether they align with a poorly prescribed 'America First' nationalist ideology is undertaken. What has been stated, though, is that anything related to the green energy transition and climate crisis, which the Horn is highly vulnerable to, as well as gender and family planning, is unlikely to be restored. Programmes are still able to apply for waivers for funding to be continued, and some have been approved, but these are few and far between, and the scale of the suspension remains immense. The speed at which the Trump administration has moved– and its apparent ease with the innumerable consequences of the suspension-- encapsulates the new government's agenda. Overnight, the US has upended the awkward foreign policy of the departed Biden administration, which preached human rights to Moscow while continuing to arm Israel. It was nevertheless the pre-eminent financier of development through traditional channels.

In turn, the US's dramatic retreat from the development space signifies a shift towards a far more conspicuous international realpolitik, with 'American interests' at its heart. For Marco Rubio, in a press statement on 22 January, this was centred around three questions, "Does it make America safer? Does it make America stronger? Does it make America more prosperous?" No US taxpayer's dollars will go towards anything that does not align with these vague principles, but it can be presumed that funding for civil society groups or democratic organisations is unlikely to be restored. Instead, Steve Witkoff– the new Middle East envoy– has already stated that reviving the Abraham Accords is one of its top foreign policy priorities. This was the normalisation of relations between a number of Arab countries, including Sudan, though never ratified, and Israel during the first Trump administration. Other objectives include a more forceful anti-China stance and resolving the rift between Saudi Arabia and the United Arab Emirates (UAE). However, as was the case during the first Trump administration, many of the foreign policy priorities in the next four years could appear on a whim.

There are plenty of critiques of the international aid system and the US's contribution to it, including issues of dependence and bureaucratisation. It is not solely out of the goodness of the US's heart that the humanitarian and development programmes have been sustained. It has provided immense soft power, kept countries within the American orbit, and aligned with Washington's foreign policy agendas, including the War on Terror post-2001. There are also domestic interests at play, such as the surplus grain from Kansas farmers supplying the World Food Programme. But it is also true that many of these programmes have done an immense amount of good around the world, feeding, educating, and housing millions of people.

Few programmes or organisations can easily weather a 90-day budget suspension, particularly in the harsh development funding environment. Key personnel are likely to be lost with programmes and organisations already shuttering operations, unsure when or if their support will be restored from USAID. And the brutal suspension comes amid a broader trend of European nations also cutting or freezing their foreign aid budgets.

In Kenya, despite the elevation of the East African country to a 'Major Non-NATO Ally', the suspension is also expected to hit businesses. Deals on renewables and promises of a supported green energy transition after the visit of President William Ruto to Washington in 2024 are likely to be slashed or not renewed-- hitting an already struggling economy. Kenya and others in sub-Saharan Africa are also certain to be impacted by the sweeping changes to family planning and healthcare programmes.

Somalia's federal government, meanwhile, is also highly dependent on US largesse, with two countries agreeing on a USD 68.5 million development assistance grant last October, intended to address a host of issues, including governance reforms, health, education, and the empowerment of women and youth. The Republican party is expected to be less sympathetic to the USD billions that have been sunk into Somalia and the limited progress to show for it. For Ethiopia, the consequences are also expected to be significant– with the country receiving USD 1.2bn in assistance in 2024, the most in Africa. That includes USD 118 million for food security, USD 85 million for health programmes, and USD 67 million for agriculture. 

Beijing and Moscow are both waiting in the wings for any further withdrawal of the US influence from the African continent. Their modus operandi may be different, but both China and Russia are motivated by a desire to undermine US supremacy and the efficacy of sanctions against their regimes. This, too, remains in the interest of nominal US allies, including the UAE, which is part of the BRICS multilateral coalition posing a challenge to the liberal international order. The suspension should also be placed into the broader context of a retreating US that has ceded significant decision-making and interest in the Horn to its favoured allies in the Gulf, namely the UAE and Saudi Arabia. The suspension of aid is the latest piece of the roiling shifts to an increasingly multi-polar world. The dust has yet to settle, but the consequences are already being keenly felt by communities and left projects scrambling across the Horn.

By the Horn Edition Team