United States funding to Africa fell to its lowest level in at least a decade in 2025, extending a sharp retreat in external assistance and forcing governments across the continent to confront a hard reality: foreign aid can no longer be treated as a stable pillar of economic and social planning.

A BusinessDay analysis of the US foreign assistance disbursement records shows funding declined across almost all of the continent’s 52 countries, deepening a downward trend that began in 2022 and accelerated sharply over the past three years, following Washington’s aid freeze.

Between 2016 and 2025, total US assistance to the world’s second-most populous continent, amounted to $120.9 billion, spanning development, humanitarian and security support. But disbursements last year alone fell 35 percent to $7.86 billion, down from $12.1 billion in 2024, marking the steepest year-on-year contraction in the last decade.

Only a handful of countries bucked the trend. Equatorial Guinea recorded a 53.2 percent increase in funding to $1.21 million, while Eritrea has reported no disbursement data since 2021.

Smaller states hit hardest

The steepest declines were recorded among smaller and aid-dependent economies. São Tomé and Príncipe saw funding collapse by 97.9 percent, followed by Comoros (82.6 percent), Tunisia (80.3 percent), The Gambia (75.7 percent) and Seychelles (66.7 percent).

In absolute terms, however, large recipients still dominated. Ethiopia remained Africa’s biggest beneficiary at $638.8 million, followed by the Democratic Republic of Congo ($585.2 million), Nigeria ($551.3 million), Sudan ($516.6 million) and Kenya ($440.9 million).

Yet the cuts mark far more than a cyclical budget adjustment. They signal a structural shift in Africa’s external financing landscape, with lasting implications for public finances, social services and the continent’s development model.

According to ODI Global, the sudden and largely unplanned rollback in US aid — the world’s largest donor — threatens to reverse decades of progress in tackling HIV, tuberculosis, malaria, and child and maternal mortality.

Still, African leaders’ responses have increasingly focused less on loss and more on self-reliance.

“African governments responded proactively, despite significant fiscal constraints and limited clarity on what might happen after the pause,” the independent, global affairs think tank noted in a recent report. “Within the health sector, many governments quickly increased domestic budget allocations and established institutional arrangements aimed at longer-term self-reliance.”

Across the continent, governments are accelerating efforts to replace aid with home-grown revenue: broadening tax bases, digitising collections, cutting fuel and electricity subsidies, and courting private capital. Results remain uneven, but the direction is clear — aid dependence is no longer sustainable.

“We are not likely to return to the familiar status quo ante,” said Ngozi Okonjo-Iweala, Director-General of the World Trade Organization, speaking at an event in Morocco last August. “These shifts present Africa with obvious challenges, but they also contain opportunities.”

Large economies recalibrate

The aid retreat intensified after January 20, 2025, when the Trump administration paused all US foreign assistance for 90 days and later terminated 83 percent of projects run by the United States Agency for International Development. The move triggered widespread disruption across health, food security and governance programs.

Large African economies have responded by reframing the shock as a catalyst for reform rather than attempting to replace aid dollar-for-dollar.

Ethiopia — historically Africa’s largest US aid recipient — saw funding fall to $638.8 million from $1.31 billion. In response, Addis Ababa has pushed ahead with International Monetary Fund-backed macroeconomic reforms, liberalised sectors such as telecoms and logistics, and expanded export-oriented manufacturing, signalling a shift toward market-based financing despite ongoing conflict and foreign shortages.

Nigeria, where US aid dropped 37.3 percent, has taken a more fiscally driven path. The removal of petrol subsidies, tax reforms and a stronger focus on the digital economy reflect Abuja’s push to strengthen domestic revenue mobilisation and rely more on private and blended finance than traditional aid.

In the Democratic Republic of Congo, where assistance fell 53.8 percent, authorities have leaned heavily on resource-backed financing, monetising copper and cobalt reserves through mining partnerships and regional supply-chain deals. While this has provided short-term relief, it has raised concerns around transparency, debt sustainability and long-term value capture.

“In a context of strong governance, aid cuts can encourage local accountability and political ownership of public services,” said Serge Shambuyi, a project management and monitoring expert to DevelopmentAid.

Fragile states face harsher trade-offs

For fragile and conflict-affected states, the impact has been far more severe. In Sudan, where US. aid fell 25.7 percent, reduced support has coincided with deepening humanitarian catastrophe. Hundreds of US-funded soup kitchens remain closed, while millions have lost access to life-saving care, according to the World Health Organization.

East Africa’s biggest economy Kenya, has also felt the strain. Funding cuts to the World Food Programme have reduced rations in refugee camps, heightening insecurity and unrest, according to advocacy groups.

Small island states such as São Tomé and Príncipe and Comoros — with narrow tax bases and high import dependence — have had little capacity to absorb the shock, forcing painful spending reprioritisations and delays to development projects.

Tunisia, where aid dropped 80.3 percent, has increasingly relied on IMF-linked reforms, tourism recovery and remittances to stabilise its economy, but reduced external support has constrained social spending amid political tension. The Gambia, down 75.7 percent, has fared somewhat better by improving governance and public-finance management to attract alternative funding, though vulnerabilities remain.

An inflection point

For decades, US aid has played a stabilising role in Africa’s health systems, food security and governance. Its retreat has exposed long-standing structural weaknesses — particularly in aid-dependent countries — but it has also forced a long-overdue reckoning.

If the World’s most powerful nation’s assistance continues to decline in 2026 and beyond, Africa’s challenge will be to ensure that the shift away from aid does not erode hard-won social gains. Health, education and poverty-reduction programmes will require durable domestic financing solutions — not as a stopgap, but as the foundation of a more sovereign development model.