The United States Agency for International Development (USAID) has long been a pillar of American foreign engagement, providing humanitarian assistance, fostering economic development and supporting democratic governance worldwide. Yet recent policy shifts threaten this role, as the Trump-led US government considers budget cuts that could reshape the global aid landscape, prioritising domestic concerns over international stability.
A strategic tool in decline
Since its creation in 1961, USAID has been a key instrument of US soft power, delivering life-saving interventions in conflict zones, combating disease and supporting fragile economies. In the 2023 fiscal year, the agency allocated over US$40 billion across 130 countries, with Ethiopia receiving US$1.676 billion – the largest African aid package and second only to Ukraine. This funding targeted severe drought, conflict-induced displacement and acute food insecurity, stabilising a region critical to Horn of Africa geopolitics.
However, growing isolationist rhetoric threatens these efforts. The Trump administration proposed deep cuts to USAID, reflecting a broader ideological shift toward “America First” policies. If implemented, these reductions could weaken US influence in regions where humanitarian needs intersect with strategic interests.
The consequences of cutting aid
Reducing USAID’s presence in Ethiopia and similar countries would have immediate, far-reaching consequences. Ethiopia, recovering from a two-year civil war in Tigray, remains dependent on foreign assistance to rebuild infrastructure and address widespread food insecurity. The World Food Programme estimates that more than 20 million Ethiopians currently need humanitarian aid. A funding reduction could lead to famine and renewed instability, threatening regional security.
The geopolitical implications are equally significant. USAID has countered growing Chinese and Russian influence in Africa by providing transparent, development-focused assistance. Budget cuts could create a vacuum for these actors to fill, potentially altering long-standing diplomatic relationships and weakening US strategic interests.
The Ethiopia case
In November 2024, USAID launched the US$31 million Markets for Sanitation (M4S) project, a five-year initiative designed to improve access to sanitation and hygiene services across Ethiopia. The project, which builds on the success of the previous USAID Transform WASH initiative, aims to provide 5.4 million Ethiopians with access to basic sanitation and enable 180,000 women and girls to obtain menstrual health and hygiene products.
The M4S project will operate in multiple regions, including Tigray, Amhara, Oromia, Sidama, Somali, South Ethiopia, Central Ethiopia and Southwest Ethiopia. It seeks to foster a competitive sanitation market, ensuring that products and services are both affordable and accessible, while promoting market-based solutions for long-term sustainability. The mission is to “unlock the power of markets to drive change and give Ethiopian citizens ownership of that change,” said USAID Ethiopia Mission Director Scott Hocklander.
The M4S initiative is part of USAID’s expanding Water, Sanitation, and Hygiene (WASH) portfolio, which currently involves an investment of US$190 million aimed at improving access to safe water supplies and basic sanitation in both rural and urban areas.
The isolationist turn
The debate over foreign aid mirrors broader ideological shifts within the US government. While critics argue that taxpayer money should be used to address domestic needs first, proponents stress the preventive role of humanitarian assistance in mitigating crises that could escalate into costly interventions. Historical precedent supports this view: after post-World War II aid programmes helped stabilise Europe and East Asia, US policymakers recognised development assistance as a pillar of long-term security. Cutting aid to Ethiopia risks undoing years of progress.
Humanitarian organisations operating in the country depend heavily on US funding for critical services such as healthcare, education and agricultural support. Additionally, Ethiopia’s strategic location makes its stability essential to the broader Horn of Africa region. The country’s instability could encourage extremist groups, heightening security threats beyond its borders.
A path forward
Policymakers face a critical choice: maintain robust international aid commitments or accept the geopolitical and humanitarian risks of retrenchment. Experts advocate a recalibrated strategy that balances domestic priorities with international responsibilities, ensuring US leadership in global development remains intact. The potential end of USAID’s operations would not only jeopardise ongoing projects like the M4S initiative but also risk destabilising fragile regions like Ethiopia, where millions rely on American support for survival and recovery.
Mattia Fumagalli holds a Ph.D. in Institutions and Policies from Università Cattolica del Sacro Cuore, Milan, Italy with an excellent final evaluation. He is a university teaching assistant specializing in African history and international development cooperation and staff member of the ASERI (Alta Scuola di Economia e Relazioni Internazionali) of Milan. His monograph Contemporary Ethiopia: State Composition and Human Environment, published by EDUCatt, has been adopted in university curricula. He has presented at international conferences, including McGill University and ISOLA in Paris, and is a member of the Royal African Society and the Italian Society of International History. He is a Knight of Merit of the Sacred Military Constantinian Order of Saint George.
Originally published under Creative Commons by 360info™.
(Cover Photo: USAID humanitarian aid in Tigray by USAID, available at https://commons.wikimedia.org/wiki/File:USAID_Tigray.jpg Credits Public Domain)
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