Africa's Slow, Steady Shift Toward Self-Reliance in the Wake of USAID Cuts

A whopping 83 percent of foreign aid contracts were scrapped in February, a decision with wide-reaching consequences. According to UNAIDS, this resulted in the termination of 40 USAID-funded projects and the loss of thousands of President's Emergency Plan for Aids Relief (PEPFAR) jobs in South Africa.

"So, these PEPFAR funds, which were largely linked to USAID funding, supply what is known as the PEPFAR countries, particularly countries in Eastern, Southern, and, to an extent, Central Africa. When I hone in on South Africa, the PEPFAR funds were supplying about 18 percent of our fiscal spending on HIV. So, it's one-fifth, but it's quite an important fifth because that money helped us bring our epidemic under control. So, we're very concerned that that money is no longer available," Professor Linda-Gail Bekker tells OkayAfrica. Bekker is the director of the Desmond Tutu Health Foundation at the University of Cape Town. She is also a medical doctor and a professor of infectious diseases and medicine.

With these unexpected cuts, South Africa and other affected countries will have to find alternative funding models to continue with HIV/AIDS treatment services and research effectively. Finding sustainable funding resources to fill the gap that the cuts have created is now the challenge these countries face.

The Desmond Tutu Health Organisation is scrambling to find donors to assist where they can. "On the research and development side, we are trying to find other willing partners and funders who will pick up on at least our clinical trials because we had these clinical trials planned. We even had immunogens ready to go into vaccine trials. So, we are looking very hard for alternative donors or funders that will fund clinical research," Prof. Bekker says.

South Africa must turn to alternative models such as private-sector partnerships, local fundraising initiatives, and increased government support to compensate for the fund shortfall. Prof. Bekker would like to see the government step in, an idea that was on the table even before Trump's abrupt decision. "We are talking to the government. Because we ultimately believe that HIV and TB programs should be fully funded by the government. And honestly, the South African government has been moving in that direction. When we started PEPFAR, we were 100 percent PEPFAR funded. Now, we are 20 percent PEPFAR funded. So, there's been progress."

Dr. Wedi believes that the conversation around self-reliance is essential for South Africa and other African countries. "We have to get serious about what it means to be financially sustainable as a country on the continent without this over-reliance on donor money. USAID funding cuts have highlighted the need for dialogue between the private sector and private financing, as well as discussions about financial reform. We must explore new ways to tax and develop different tax models."

A country that has taken the bold decision to adjust its tax model to make up for debilitating funding cuts is Ethiopia. Last month, the nation introduced a new tax for all workers, to be collected by a new Ethiopian Disaster Risk Response Fund to pay for projects that USAID previously funded. Those in the private and public sectors will be expected to contribute to this new tax model, and percentages will be determined after the new bill is submitted to a parliamentary committee.

This alternative funding model may be challenging for South Africa, especially after citizens protested against a proposed two percent VAT increase last month, which was revised to a 0.5 percent increase. Given the country's history of widespread corruption and fraud within governmental bodies, it is crucial to rebuild trust in officials so that citizens can rest assured that their taxes are going toward the appropriate necessities. However, in the 2025 annual Budget Speech, Finance Minister Enoch Godongwana announced that an additional 28.9 billion Rand ($1.5 billion) would be earmarked for health spending throughout the year.

Rwanda is also demonstrating leadership in exploring internal health financing solutions by investing in homegrown approaches to finance its health sector. Meanwhile, the Nigerian government has committed to retaining 28,000 health workers whose salaries were previously funded by USAID.

Additionally, Zimbabwe is reallocating resources to cover the funding gap, particularly for HIV/AIDS programs. How other countries plan to manage the cuts is unclear, but conversations on potential strategies are essential to prevent dire global consequences.

Regarding healthcare funding, Prof Bekker says there is a higher likelihood of mitigating the impact of infectious disease if the world bands together. "So there's a real shrinking away from global health. We need to resist that and continue to advocate and make a case for global solidarity and health. I think the COVID-19 epidemic taught us that pandemics affect the world at large," she says.

Dr. Wedi emphasizes the need for Africa to continue the quest toward self-reliance. "One thing that Africa, for both good and bad, has always been known for is our resilience and ability to make beauty out of tough situations. We're in a tough situation, and we hope this will inspire our governments, the private sector, and philanthropic organizations to rethink how we approach sustainable development on the continent," she says.