One year after the USAID funding cuts: A wake-up call Africa needed

By Kwesi MBIR

A year ago, the unthinkable happened.

The tap was turned off. USAID, the largest bilateral donor to Africa’s development, was dismantled, leaving a dent in the continent’s aid-dependent economy. Many, myself included, predicted severe consequences. We were wrong.

In her book Dead Aid, Dambisa Moyo asks a question that once seemed impossible: “What do you think Africans would do if aid were stopped, simply carry on as usual?” (Moyo, 2009). Over 16 years later, that question is no longer hypothetical. Aid has been reduced, restructured, and in some cases withdrawn. The outcome aligns closely with Moyo’s prediction: ‘economic life for the majority of Africans might actually improve, and entrepreneurs would rise…’ (Moyo, 2009).

One year into the post-USAID era, the panic faded and reflection has taken its place. I remember discussions on the phone when the news broke, colleagues in the NGO space were worried. What once seemed radical now stands as a sober reality, a timely reminder that development rooted in dependency was never sustainable. While the reductions were widely criticised, they also forced a long-overdue reckoning: what happens when the aid tap is turned off? For Ghana, the answer has not been collapse; it has been adjustment.

Why aid has failed Africa

In “Dead Aid,” Moyo (2009) suggests that large-scale, long-term aid in the form of foreign handouts tends to undermine accountability. Moyo’s argument is that aid diverts the incentives of governments away from their citizens and toward the donors, and instead of creating productive capacities in the African states, the foreign money distorts the market, weakens its institutions and consolidates dependency.

A phenomenon that is being confirmed by African leaders themselves. As cited in Dead Aid, Rwandan President Paul Kagame asked bluntly: If aid has flowed to Africa for over fifty years, why are we still having the same conversations about poverty and underdevelopment? (Moyo, 2009). His point is not that aid has no value, but that it has failed to transform African economies structurally.

Ghana after USAID: Adaptation in Action

Ghana had long relied on USAID funding in health, agriculture, education, and governance. When funding was reduced, the pressure was immediate, but the response was telling.

In early 2025, President John Dramani Mahama directed the Finance Minister to take urgent action to fill the funding shortfall caused by the suspension of USAID programmes. The gap, estimated at US$156 million – a staggering US $78.2 million, going towards critical health programmes like malaria prevention, maternal and child healthcare, family planning, nutrition and HIV/AIDS. To avoid the disruption of life-saving services, the government prioritized reallocation of internal funds and scrambling for alternative income sources. (Mahama, 2025).

The main ways to combat the shortfall were: domestically absorbing the gap, which brought home the point that development is a government’s responsibility to its people, not that of donors, a much-needed push on tax reform and fiscal discipline, and boosting entrepreneurship in agriculture and technology that fill the void left by international initiatives. Strategic diversification also brought Ghana to rethink regional and South-South partnerships.

A wake-up call, not a crisis

The reduction of aid has not been painless. Some programmes were disrupted, and our organisation felt the impact directly, particularly those initiatives that depended on USAID support. The transition, without question, could have been better managed. But the deeper lesson remains: aid was never meant to be permanent.

As Moyo warned nearly seventeen years ago, the danger is not that aid ends; it is that it never does. Ghana’s experience over the past year shows that when aid steps back, ownership steps forward. Accountability sharpens. Innovation accelerates. Development begins to look less like charity and more like strategy.

A call to action: two lessons

As a Ghanaian watching this unfold, it has taught me two clear lessons.

For policymakers: The absence of donor cushioning must be met with transparency, fiscal discipline, and policies that reward productivity rather than rent seeking. I hope the current administration, under President John Mahama’s leadership, builds on the progress already underway since taking office in January 2025 and deepens reforms that prioritise accountability and long term strategic capacity.

For entrepreneurs: This moment is not a roadblock but an opening. As aid recedes, space expands for innovation, enterprise, and value creation. Africa’s development will be driven by people willing to build, take risks, create jobs, and solve problems at scale.

If Africa is to escape the grip of poverty, it will not be through more aid, but through better choices: choices to govern well and to finance development from within. Perhaps this moment disruptive as it is, is exactly the reset Africa needed.

References

• Moyo, D. (2009) Dead Aid: Why Aid Is Not Working and How There Is a Better Way for Africa. London: Allen Lane.

• Mahama, J.D. (2025) President directs urgent action to bridge USAID funding gap. Press Release, 11 February 2025. Available at: https://presidency.gov.gh/president-directs-urgent-action-to-bridge-usaid-funding-gap/?utm_source

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