Cuts to foreign aid, particularly from the United States, are prompting African nations to re-evaluate strategies for growth, shifting focus from external assistance to economic transformation. The U.S. Agency for International Development, a major source of funding for years, has seen significant reductions.
The Trump administration reportedly cut 86 percent of USAID programs, closing its headquarters and terminating most employees. This action follows a trend among wealthy nations, with countries like Germany, the United Kingdom, Belgium, France, and the Netherlands also announcing decreases in Development Assistance budgets.
For many countries in Africa, Global Aid has historically represented a portion of gross national income. Experts warn reduced funding could push millions more into poverty unless alternative growth models are adopted, according to data modelling. Organizations relying on this funding face severe disruption.
Some observers argue traditional aid models, often focused on charity and spread across diverse sectors, have not driven the necessary structural economic changes. Zainab Usman, Director of the Africa Program at the Carnegie Endowment for International Peace, suggests decoupling development from aid and anchoring it in Industrialization. This approach emphasizes helping countries build productivity-enhancing sectors and move beyond primary commodity production.
Hakainde Hichilema, President of Zambia, echoes this sentiment, highlighting the need for investment in areas like manufacturing and processing, rather than simply extracting raw materials. Hakainde Hichilema stated that Africa needs capital to build factories, refineries, and data centers to drive sustainable growth.
The Democratic Republic of Congo extracts a majority of the world's Cobalt, and Zambia is a large producer of Copper. Yet, much of these resources are processed elsewhere. Zambia and the DRC are now pursuing initiatives to build value chains for industries like electric vehicle batteries within the Copperbelt region.
Africa is positioned as a future manufacturing hub and a large market. By 2050, one in four people globally will be African. The AfCFTA implementation is set to create the world's largest free trade area, presenting opportunities for investors.
African leaders acknowledge the need for internal efforts, including creating stable regulatory environments and investing in infrastructure and workforce development. Promoting opportunities and connecting businesses with investors is also a stated priority. The Invest Zambia International Conference this July aims to connect vision with capital.
President Hichilema described the aid cuts as a "painful but perhaps necessary wake-up call that African nations can, and will, do more to bolster their own development."
