By CPA Gladys Masai
Strengthening Governance of Donor Funds
In January 2025, Donald Trump issued an executive order imposing a 90-day pause on U.S. foreign development assistance, halting new USAID disbursements while programmes were reviewed for “programmatic efficiency and consistency” with U.S. foreign policy (The White House, 2025; KFF, 2025). The directive sent immediate shockwaves through Africa’s aid ecosystem, where many civil society organizations rely heavily on U.S. support (Crowell & Moring, 2025; ONE Campaign, 2025). What initially appeared to be a temporary suspension soon escalated: by early March, the administration announced that more than 80% of USAID’s grant and contract portfolio would be terminated, cancelling thousands of awards and forcing programmes to scale down or cease entirely (Rubio, as cited in The Guardian, 2025; Lu, 2025).
Given Africa’s continued dependence on donor financing for health, education, and climate-related interventions, the freeze was particularly damaging. The European AIDS Treatment Group warned that the 90-day halt could be “devastating for HIV programmes in African countries” (EATG, 2025). The sudden disruption triggered widespread job losses across NGOs and UN agencies, closure of field operations, and termination of community projects, marking one of the most significant aid shocks in recent history.
CFK Africa, a non-profit organization serving informal settlements, reported severe interruptions to HIV and TB services after the USAID funding freeze, with access to PrEP and community surveillance activities coming to a halt and some clinics closing due to financial strain (CFK Africa, 2025a; CFK Africa, 2025b).
SoCha, a Kenyan consultancy specializing in monitoring and evaluation, also suffered major setbacks after USAID terminated a large contract supporting programme transparency and accountability (Business Daily Africa, 2025a). In the education sector, the cancellation of the Kenya Primary Literacy Programme, a five-year literacy initiative funded through USAID, placed early-grade reading interventions at risk (Business Daily Africa, 2025b). The cuts further affected critical water and sanitation infrastructure, with irrigation and water projects in counties such as Taita Taveta stalled at early stages of construction, leaving unsafe open sites and vulnerable materials (Reuters, 2025).
The health sector faces the gravest consequences. The Fahari ya Jamii programme, previously instrumental in HIV prevention and maternal health, was excluded from the list of preserved USAID initiatives, raising concerns about renewed outbreaks and weakening health system resilience (The Washington Post, 2025a, 2025b). Reports indicate that tens of thousands of health and community workers supported through PEPFAR-funded programmes have already been laid off or forced to halt services (The Washington Post, 2025a).
The event underscored a deeper structural issue: the over-reliance on external financing. As Catherine (2022) observes, “where many projects depend heavily on donor funding, this results in low utilization of internally generated resources.”The shock served as a critical reminder to African governments to strengthen domestic revenue mobilization and to explore sustainable, in-house initiatives to ensure the continuity of essential services. Njoroge and Muriithi (2018) emphasize that effective “financial planning, financial control, and fund utilization” are crucial determinants of project sustainability in Kenya, reinforcing the importance of local accountability and fiscal discipline.
Beyond the immediate funding crisis, the incident was also a wake-up call for governments to enhance transparency and governance in the management of donor funds. Mismanagement, waste, and embezzlement not only deter future funding but also hinder long-term development outcomes. Mwangi (2013) found that a high reliance on donor funds was negatively correlated with the performance of state corporations in Kenya, suggesting systemic inefficiencies that can only be addressed through stronger governance structures and audit mechanisms. In the same vein, Njoroge and Muriithi (2018) argue that the sustainability of donor-funded projects depends largely on sound financial management practices, underscoring the need for a culture of accountability and proactive financial oversight.
Significance of the Study
The dynamics of donor funding, climate vulnerability, and geopolitical shocks hold profound implications for policymakers, auditors, and finance professionals across Africa. For policymakers, understanding these interconnections is critical for designing strategies that promote economic resilience, ensure continuity of essential services, and reduce dependence on external funding sources. Auditors and finance professionals play a complementary role by strengthening governance, accountability, and transparency in the management of both donor-funded and domestic resources. By analyzing the impacts of funding suspensions, climate crises, and global economic disruptions, this study highlights areas where strategic planning, financial oversight, and policy interventions can safeguard socioeconomic stability and foster sustainable development.
Statement of the Problem
Africa’s heavy reliance on donor aid exposes governments and institutions to significant vulnerabilities during global funding disruptions. Over 60% of development budgets in many African countries depend on external assistance (African Development Bank, 2023), leaving programs susceptible to abrupt funding freezes or policy shifts by donor nations. Such dependency can lead to interrupted health, education, and infrastructure projects, job losses, and diminished public trust in governance structures. The problem is further compounded by weak internal resource mobilization, limited fiscal autonomy, and gaps in accountability mechanisms. Understanding and addressing this reliance is therefore essential to ensure that African nations can respond effectively to financial shocks while maintaining developmental progress and socio-economic stability.
Global Outlook
The economic effects of global conflicts further compound Africa’s vulnerabilities. The Russia–Ukraine war, which erupted in 2022, has had far-reaching consequences beyond Europe. Bohlmann, Anderson, and Gelb (2024) noted that “the transmission of the global impact of the Russia–Ukraine war has been evident through trade, commodity prices and financial conditions.” Global supply chains have been disrupted, leading to inflationary pressures and constrained access to essential commodities such as food, fuel, and fertilizer, which are disproportionately felt in developing economies (Frontiers in Sustainable Food Systems, 2025). These disruptions worsen poverty, unemployment, and fiscal deficits, eroding the developmental gains achieved in recent decades.
Africa’s Climate and Environmental Challenges
Compounding these financial and geopolitical shocks are climate-related crises that increasingly threaten Africa’s sustainability. The World Meteorological Organization (2024) reports that the continent faces a “disproportionate burden from climate change and adaptation costs,” as evidenced by extreme weather events such as floods, droughts, and heat waves. Yohannes and Mutiso (2024) highlight the interconnected nature of these disasters, describing “floods and droughts in Africa as interconnected water and climate hazards, influenced by unpredictable rainfall patterns worsened by climate change.”
These events have severe socioeconomic repercussions, including loss of lives, livestock, and biodiversity, destruction of infrastructure, and increased spread of waterborne diseases. In Kenya, recurring mudslides in regions such as Mai Mahiu and Baringo, along with prolonged droughts in arid counties such as Turkana, Marsabit and Garissa, illustrate how climate instability undermines food security and economic resilience (Climate Centre, 2024). Such occurrences deepen poverty levels, trigger migration, and heighten the risk of conflict over scarce resources.
Policy and Adaptation Outlook
The international community continues to emphasize the urgency of climate action. The Global Commission on Adaptation (2022) stresses that “climate change acts as a risk multiplier, both the changing realities of climate in Africa today and modelling of future outcomes show that Africa is one of the most vulnerable regions in the world to climate risk.” Upcoming global forums, including the Brazil Climate Conference (2025) and the outcomes from the 2023 COP28 Climate Action Conference in Dubai, continue to emphasize the shared responsibility of nations to curb emissions, strengthen adaptation financing, and promote equitable climate justice (UNFCCC, 2023). Building on these efforts, the forthcoming COP29 Conference in Brazil is expected to intensify global commitments to climate finance and adaptation support, particularly for developing nations. However, for these initiatives to yield lasting impact, African governments must complement global efforts with homegrown resilience strategies that prioritize accountability, innovation, and sustainable funding models that reduce reliance on volatile external sources.
Conclusion
The Trump funding suspension, the Russia–Ukraine war, and escalating climate challenges collectively reveal Africa’s exposure to external shocks. While donor assistance remains valuable, long-term resilience will require African nations to reimagine financial independence, strengthen internal control systems, and foster transparency in fund management. The continent’s path forward lies in leveraging innovation, strengthening governance, and mobilizing domestic resources to secure sustainable development amid global uncertainty.
Policy Recommendations
To strengthen Africa’s resilience to external shocks and climate-related crises, several strategic measures are recommended. Governments should enhance domestic resource mobilization through tax reforms, improved collection systems, and measures to combat illicit financial flows. Strengthening public financial management (PFM) is equally critical, ensuring that donor funds align with national priorities and that transparency and accountability are embedded throughout the budgeting and expenditure processes. In parallel, investment in climate adaptation funds, such as national green funds or climate resilience bonds, can help mitigate the socioeconomic impacts of extreme weather events.Regional collaboration, particularly through frameworks like the African Continental Free Trade Area (AfCFTA), can facilitate shared resource mobilization and joint responses to crises. Finally, continuous capacity building of public finance officers, auditors, and program managers is essential to enhance the effective management of funds, ensure sustainability, and strengthen governance across both donor-dependent and domestic initiatives.
Future Research
Future research should explore how internal audit mechanisms and technology-driven accountability can enhance donor confidence and ensure sustainable program outcomes in Africa.
This article draws on extensive research, including the sources listed below:
Reference
Bohlmann, H. R., Anderson, L., & Gelb, S. (2024). Impact of the Russia–Ukraine war on Africa. ODI Policy Brief.
Business Daily Africa. (2025a). Sh33bn Kenya contracts, grants axed in USAID purge.
Climate Centre. (2024). Kenya: Country climate and risk profile.
Frontiers in Sustainable Food Systems. (2025). Global supply chain disruptions and sustainability challenges amid the Russia–Ukraine war.
Global Commission on Adaptation. (2022). State and trends in adaptation 2022: Climate risks in Africa.
Reuters. (2025). Trump’s funding cut stalls water projects, increasing risks for millions.
The White House. (2025, January 20). Re-evaluating and Realigning United States Foreign Aid (Executive Order No. 14169).
The writer is a finance professional (Inspire Africa Initiatives Foundation), specialising in accounting, audit, and financial management in the agricultural and non-profit sectors, with a strong focus on transparency and accountability.
Email [email protected]
