In July, after months of winding down USAID, the U.S. State Department announced that it was officially closing the agency and folding most of its remaining contracts into the so-called Department of Government Efficiency.
USAID had been the largest bilateral donor to Africa. In 2024 alone, it spent nearly USD 12 billion in sub‑Saharan Africa – less than 0.1 percent of the U.S. federal budget, but nearly 0.4 percent of the entire continent’s GDP.
The largest recipients were the Democratic Republic of the Congo (DRC) and Ethiopia, which received USD 1.3 billion and USD 1.2 billion respectively, while Sudan, Nigeria and South Sudan each received over USD 700 million. Most of these countries depended on USAID for more than 20 percent of their income.
The U.S. is not alone in cutting development aid. Several European countries, including the U.K., France, Germany, Switzerland and the Netherlands, have followed suit in reducing their aid budgets to fund domestic priorities such as defense.
Of USAID’s USD 3.7 billion humanitarian budget for Africa in 2024, 73 percent was allocated to health programs, with the rest targeting areas such as food security, education, gender equity and climate action.
This sudden cut in development aid threatens to derail Africa’s progress in achieving the Sustainable Development Goals (SDGs). Sectors such as healthcare, education and research, which were already weak, are now teetering amidst austerity measures.
According to a survey by ActionAid across six African countries, teachers have lost up to half their income, classrooms are lacking basic materials and 97 percent of health workers say their wages no longer cover basic needs.
This is just the tip of the iceberg of job and income losses triggered by these development aid cuts, which jeopardize food security and climate action across the continent.
Many projects have been abandoned without appropriate exit and continuity strategies. This is especially troubling in humanitarian emergency contexts such as refugee settlements.
To rub salt into their wounds, the U.S. has slapped tariffs on every African country. Algeria, Libya and South Africa currently face the highest tariff rate at 30 percent, followed by Tunisia at 25 percent. A further 18 countries will be taxed at 15 percent, with the rest at 10 percent.
These trade barriers could shut down a critical market for African export commodities, forcing countries to turn to other trade partners such as China and India.
These developments raise important questions – not only over the world’s commitment to achieving the SDGs but also around Africa’s development agenda.
Even before the aid cuts, African countries were walking on thin ice. The COVID‑19 pandemic significantly stalled and, in some countries, reversed progress on food and energy security and poverty reduction.
Without development aid, those goals are more daunting than ever. But the real issue is not the absence of aid. It is a development model built on aid dependency.
Africa is effectively a net creditor to the world. Illicit financial flows siphon off USD 88.6 billion annually – roughly 3.7 percent of the continent’s GDP, and more than the development aid it receives.
International profit shifting – in other words, the use of corporate tax havens – costs Africa USD 275 billion a year, while corruption accounts for a further USD 148 billion.
Many of these losses are tied to the degradation of the continent’s ecosystems. The UN Environment Programme estimates that Africa loses USD $195 billion each year through illegal mining, logging, the wildlife trade, unregulated fishing and environmental degradation.
Meanwhile, Africa continues to transfer its wealth abroad by exporting unprocessed raw materials. It produces most of the world’s platinum, cobalt and manganese, 46 percent of diamonds, 39 percent of chromium and 22 percent of gold – and yet the lion’s share of profits is kept outside the continent.
In terms of agriculture, Africa has become a net importer of food, spending more on imports than it earns from exporting unprocessed commodities.
In other words, Africa is merely a supplier of cheap commodities for the global economy – its materials, land, labor and energy systemically and structurally devalued.
The current development model, enshrined in the Millennium Development Goals (MDGs) and SDGs, is based on the premise that African countries need external programs to deliver social services. Yet it fails to tackle structural power imbalances.
The MDGs were drafted by a small group of experts without meaningful input from developing countries, and as a result, many of its goals were detached from local needs. Much of the poverty reduction since 2000 has resulted from rapid economic growth in China and India rather than MDG initiatives in Africa.
The SDGs replicated many design flaws of the MDGs: an expansive but non‑binding agenda, uncertain financing and universal targets imposed on countries without consideration for their circumstances.
Ten years on, Africa is only on track to achieve 6 percent of its measurable targets by 2030. On some indicators, it has moved backward: for instance, undernourishment has increased by 55 percent since 2015.
The MDGs taught us that goals designed without local participation and accountability create programs more in line with donor preferences than local needs. The SDGs repeat this by bundling environmental, social and economic objectives into an aspirational but insufficiently funded agenda.
Any successor framework must be co‑created with Africa, anchored in legally binding commitments, backed by predictable financing and flexible enough to reflect regional priorities and strategies.
Rather than a death blow, the end of development aid can be a turning point. This is an opportunity for Africa to usher in a new post‑aid, post‑SDG era built on mutual respect and transparency, recognizing its own agency, priorities and assets.
In most African countries, natural capital accounts for 30 to 50 percent of total wealth. The continent contains 65 percent of the world’s remaining uncultivated arable land.
The Congo Basin, whose critical minerals recently became Donald Trump’s fee for brokering peace between the DRC and Rwanda, is the world’s largest net carbon sink and provides services worth at least USD 55 billion per year.
Rather than deplete these assets for short-term gain, Africa should invest in them. Restoration, agroecology, regenerative agriculture and community-led conservation are not just environmental imperatives – they are economic strategies.
By valuing and investing in their natural landscapes, countries can create green jobs for their citizens while also conserving their ecosystems.
Emerging biodiversity and carbon markets could mobilize billions for Africa – if the right governance frameworks are in place. But without them, we risk locking up African resources in greenwashed contracts that benefit foreign interests while sidelining local communities.
A nature-based economy is not enough. Africa needs a bioeconomy that captures and circulates value domestically.
Rather than linear ‘value chains,’ Africa needs circular ‘value webs’ that minimize waste and maximize life. To complement its rich natural capital, a circular bioeconomy model with streamlined value webs presents an opportunity to reduce waste and generate more value from natural capital.
For instance, in Africa’s food sector, food waste and post-harvest losses account for between 30 and 50 percent of produce lost. Flipping this could provide food for nearly 1.6 billion people and shift Africa’s position as a net importer of food.
The concept of value webs presents an opportunity to retain value without relying on consumerism. African communities already live ‘more with less’ – demonstrating that prosperity does not require endless material accumulation. A new development model should build on this philosophy.
Africa has the world’s youngest population and is projected to contribute at least a quarter of the global workforce by 2050. Meanwhile, rapid growth in mobile connectivity, fintech and e‑commerce is creating a booming digital economy.
With supportive policies and critical skills development, this demographic dividend can provide the innovation, creative industries and value‑added manufacturing needed to build a nature-based economy.
China seized this opportunity – albeit at a massive ecological cost. Africa could learn from its successes and failures to tailor its own blueprint.
Africa has more regional trade and mobility barriers – legal, political, infrastructural and geographic – than any other continent.
That could soon change. If effectively implemented, the African Continental Free Trade Area (AfCFTA) could double the continent’s GDP, unlocking an estimated USD 3.4 trillion in economic potential by boosting intra‑African trade, diversifying economies and building cross‑border supply chains for the flow of labor, technology and other products such as agricultural produce.
AfCFTA could help keep these growing revenues circulating within Africa. But if uncoordinated, it could suffer from corporate capture and end up serving foreign interests instead.
Africa will play an important role in tackling the crises of climate breakdown, biodiversity collapse and land degradation. Its forests, peatlands and mangroves are climate stabilizers. Its minerals are indispensable for renewable energy and the AI revolution.
In return, Africa still needs knowledge and technological exchange, investment and fair trade. This means it must forge a new relationship with the rest of the world based on fairness and just reciprocity, as well as partnerships built on dignity, transparency and mutual benefit.
Africa’s leaders should no longer accept extractive and paternalistic contracts that lock the continent into the role of raw material supplier. Contracts and trade and development agreements must be based on the exchange of real value – not the plunder of resources.
Africa must move from depending on aid to mobilizing its own resources, attracting foreign investment and managing revenues transparently. It must close loopholes that enable illicit financial flows and renegotiate contracts that grant disproportionate profits to foreign firms and permit the reckless exploitation of its natural resources.
It should also embark on widespread value addition and build circular economies that allow it to capture the full value embedded in its resources.
This could include investing in processing and manufacturing and innovations such as biotechnology to keep more value within Africa, and supporting small producers, cooperatives and digital entrepreneurs in building competitive and reliable supply chains and reducing waste.
It also includes nature‑based solutions – not only restoring natural capital but also recognizing it in national accounts and reinvesting proceeds from emerging avenues such as carbon and biodiversity markets in local development.
The global financial, trade and economic system is currently stacked against Africa’s interests. To make it work for Africa, we must start investing in strategic diplomacy and relationships, including advocating for a reform of global trade and financial systems to ensure fair rules and valuation of our resources.
A new opportunity is also emerging in the Global South. Africa must forge alliances with other Global South regions to amplify their negotiating power as a collective.
This would reduce revenue and value drain through unequal and unfair North–South exchanges. It would also unlock alternative sources of financing, technology transfer and capital goods, creating a South–South market based on fairer rules and shared interests.
No model will succeed if corruption remains the status quo. Africa must stem the illicit flow of billions of dollars from its economy each year by building radically inclusive, accountable and transparent governance systems.
This means upholding the values of democracy with integrity, engaging citizens in designing and implementing policies, and adopting legal frameworks that uphold rights and promote accountability.
As old aid structures collapse, this moment is not a crisis to lament but a chance to imagine.
Africa must seize this opportunity to craft a new development blueprint – one that restores its landscapes, empowers its people, regenerates its natural, human and digital capital, restructures its economic system and redefines prosperity on its own terms.
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