FT: Africa adapts as aid fades, following Eritrea’s lead

Key topics.Eritrea rejected aid in 2005, prioritizing self-reliance over dependency.Trump's aid cuts have left African nations struggling with healthcare and security.Experts urge Africa to boost trade, investment, and regional self-sufficiency..Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here..Support South Africa's bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here..If you prefer WhatsApp for updates, sign up to the BizNews channel here..By William Wallis in London and Aanu Adeoye in Lagos___STEADY_PAYWALL___.Two decades after Eritrea expelled the American agency, other nations must now find a way to survive without it.Eritrea was an anomaly in Africa in 2005 when it expelled USAID, shuttered other development agencies and imposed taxes on aid imports, intentionally hastening an end to most western donor support..Explaining his rationale in an interview with the Financial Times that predated the expulsion, Eritrea's long-term autocrat Isaias Afewerki said: "If you need something and no one is giving it to you, you struggle even harder to do it on your own.".As USAID and the architecture of the global aid industry crumbles two decades later, the rest of the continent, which campaign group One said received more than a quarter of overseas development assistance in 2023, faces the prospect of a world with little or no aid..The future of aid.This is the third in a three-part series about how the US and other western nations' turn against foreign assistance is rippling across the world.Part one: Can international aid survive?Part two: China's plan to take on the US in AfricaPart three: The race to adapt to a world without aid."Whether Africa goes cold turkey or has methadone — that's the issue now," said a senior official at an African finance institution..In doomsday scenarios envisaged by some think-tanks and development agencies, millions of Africans would die avoidable deaths or drift back into extreme poverty. Diseases such as HIV and tuberculosis would rebound, conflicts would metastasise and ensuing chaos would visit Europe as undocumented migration surged..Short of that worst-case scenario, however, many African officials and thinkers glimpse, as Afewerki did in 2005, a silver lining.."It is clear that aid is drying up, and whatever little of it there will be, will have to be used much more strategically," said Ngozi Okonjo-Iweala, the Nigerian director-general of the World Trade Organization and former managing director of the World Bank. "We do have to take responsibility for our health as much as we can.".She appealed, however, for interim financing to bridge huge gaps, notably in healthcare, in donor-dependent countries.."African countries deserve some notice before being cut off," she said. "You need to give them two to three years to work this through their budget, and then you can give that funding in declining amounts.".Western contributions to aid in Africa have, in any case, been dwindling, hastened by the Covid-19 pandemic and the Russian full-scale invasion of Ukraine. The return of Donald Trump as US president has jet-propelled the trend..Trump ordered a review of foreign assistance after freezing USAID's $43bn annual budget in January. Marco Rubio, US secretary of state, confirmed last week that 83 per cent of USAID programmes would be permanently cut, with the remainder run from the state department..Eritrea was uniquely unaffected as the only African country not to receive US aid last year..Read more: 🔒 Musk and Trump Target USAID: Billions in aid Frozen, agency on brink of collapse.The country is hardly an exemplar, trapped as it is in a state of permanent war mobilisation since winning independence from Ethiopia in 1993 and with few personal or political freedoms permitted under Isaias's continuing rule..But, spurred by an almost bloody-minded sense of self-reliance, on some development indicators it has fared as well over the past two decades as other countries that have benefited from billions in donor largesse..According to UN data, life expectancy at 68 is the same as in Rwanda, which has been receiving in excess of $1bn in aid each year. More Eritreans proportionally have access to electricity, according to the World Bank, than people in Uganda, which in 2022 received $2.1bn compared with just $55mn, from UN agencies, for Eritrea.."Eritrea's approach from the outset, was anchored on avoiding structural dependency," said Yemane Gebremeskel, the long-standing information minister. He said this made Eritrea immune to the vagaries and demands of donors. "More importantly, [aid] stifles local initiative and capacity," he said..Elsewhere, the immediate impact of Trump's aid freeze has been tumultuous, underscoring the extent to which USAID buttressed wider efforts in healthcare, food security, water sanitation and climate mitigation across the continent..In Kenya, tens of thousands of highly trained health professionals were made de facto redundant overnight. In many African countries, patients with HIV are struggling to access antiretrovirals and prevention programmes..The humanitarian impact of the freeze in the Democratic Republic of Congo and Sudan, where wars are raging and food and medical supplies are running thin, has been devastating, according to aid workers..Timothy Kabba, foreign minister of Sierra Leone, told the FT his government had been forced to cut projects that were not central to "the survival of the country". This was in order to safeguard critical elements of hitherto US-funded projects in healthcare, basic education and food security that had not been budgeted for, he said..As it has slowly recovered from a civil war that ended in 2002, Sierra Leone has been among the states most reliant on donor support, with foreign aid at one point accounting for more than 15 per cent of GDP, although this has now fallen back..To safeguard the "functioning of the state", Sierra Leone would have to tighten its belt and raise taxes, Kabba said. Taxation, however, was already fuelling inflation and rebounding on the poor, he added. "These are very tough times," Kabba said..Africa is yet to recover from a series of external shocks, including a drop in oil prices, Covid-19 and reduced Chinese investment, which stalled what had been a prolonged period of continental growth in the first 15 years of the century..Many states have already raised taxes as much as their populations will tolerate after years of heavy borrowing raised debt payments to debilitating levels. Kenya's government learnt this last year when tax increases prompted weeks of rioting in the capital Nairobi, forcing it to reverse course..At the same time, said Donald Kaberuka, former president of the African Development Bank, "demography is galloping everywhere" and African urbanisation is "the fastest in human history"..Kaberuka said he had warned for years that donor-funded health initiatives were unsustainable and that African governments should plan for domestic financing..But both he and Okonjo-Iweala said they believed that the squeeze would focus minds on the need to stimulate regional trade and force governments to work harder to attract investment..Western donors, such as the US and UK, which last month announced it would slash its aid budget to its lowest level since 1999, appear more willing to continue funding development finance institutions. DFCs such as the US International Development Finance Corporation, British International Investment and Proparco of France provide risk capital to businesses in the developing world.."All countries were poor at some point. They became wealthier through trade and access to capital markets," Kaberuka said, adding that the trade that mattered most to Africa will be "intra-African"..Okonjo-Iweala agreed the continent needed to "think very, very sharply about how to pivot towards investment", taking advantage of its store of critical minerals, its green energy potential and by strengthening its place in global supply chains..Some US philanthropic organisations, including the Gates Foundation, are offering stop-gap funding..But adding to the uncertainty is the possibility that the US and other donors will now reduce their contributions to concessional lenders such as the African Development Bank and World Bank..Lower-income countries, which rely on aid typically for as much as 30 per cent of their budgets, have most to lose, said Zainab Usman, Africa director at the Carnegie Endowment for International Peace. She cited Rwanda, Malawi, Sierra Leone and Liberia as examples.."For the middle-income economies this may be the push they need to reduce their dependence on aid and convert resources otherwise lost to corruption," she said, mentioning Ivory Coast, Nigeria and South Africa..On whether that happens or not, many lives will depend..Read also:.🔒 Trump's foreign aid cuts shake NGOs and philanthropists🔒 RW Johnson: Ebrahim Rasool, the man from a moral superpower🔒 FT: Elon Musk's self-destruction.© 2025 The Financial Times Ltd.

FT: Africa adapts as aid fades, following Eritrea’s lead

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