It comes as no huge surprise that African countries are struggling to fill funding gaps in social sectors, such as health and education, following the loss of U.S. funding.
Malawi is a case in point. The country has long been heavily dependent on donor assistance, with external financing accounting for 55% of its health budget. Before USAID’s shutdown, Malawi was receiving more than $350 million annually for sectors including health, agriculture, and education.
Losing that funding has forced the country to reduce HIV and AIDS services, and some experts fear it could lead to shortages of antiretroviral medicines. In response, the government is attempting to integrate services — allowing patients seeking HIV care to also access other health services, such as family planning and diabetes screening.
It is also pursuing tax reforms, including raising income and value-added taxes, introducing levies on mobile money and bank transfers, subjecting lottery and gambling winnings to withholding tax, and reinstating additional duties on imported cement. The government is further considering taxes on pensions and inheritance, writes Devex contributor Madalitso Wills Kateta.
But with high inflation and the country still facing significant debt, on top of other state obligations, any additional revenue from these taxes may not be enough to fund essential services, which used to be supported by donors like the U.S.
But then that raises the question: How then can the government fund social services while fulfilling its cofinancing obligations with the U.S. government? Under the $963 million U.S.-Malawi bilateral health compact, Malawi committed to spending $143 million of its own money for health over five years. Yet the country currently spends 90% of its domestic revenue on its wage bill and statutory obligations.
Read: Malawi struggles to fill development gaps after US aid cuts (Pro)
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Nada, zero, nil
“I see a lot of proposals that governments should allocate more money to health care. … We have no money. That money you are asking for does not exist.”
— Daniel Mwai, adviser for health and standards, Kenya’s Presidential Economic Transformation Secretariat.If Malawi is any indication, Mwai’s comments ring true. Across the continent, governments are scrambling to boost domestic health spending — through higher taxes or increased borrowing. But experts warn these measures can carry unintended consequences, including higher out-of-pocket costs for patients.
In Kenya, David Njagi reports that the government is considering taxing the informal sector — a population already grappling with low incomes and limited social protection. In Uganda, the government is turning to domestic and external borrowing to plug the health financing gap left by USAID — adding to the country’s already mounting debt burden.
“It is almost like a perfect storm,” says Evans Osano, the chief financial markets officer at the nonprofit, FSD Africa. “When you take debt, even as an individual, essentially, what you have done is you are bringing forward your future revenues to use today. That means you are left with an obligation to pay in future from your own revenue. The future revenue for governments means taxes.”
Read: Will Africa’s health care reset leave patients footing the bill?
+ Listen: For the latest episode of our podcast series, my colleagues Rumbi Chakamba, Ayenat Mersie, and Sara Jerving discuss the various ways African countries are trying to address funding shortfalls caused by aid cuts.
Hidden casualties
Beyond the countries left in the lurch, U.S. funding cuts have also left thousands of local aid workers jobless, including health professionals who dedicated their careers to serving vulnerable communities. Without government support, many are now relying on one another — for everything from mental health support to professional development.
Ayenat reports that USAID employed more than 4,500 foreign service nationals across its country missions, and thousands more worked on U.S.-funded projects implemented by contractors and international NGOs. In Ethiopia, locals comprised the backbone of aid delivery.
But many are now out of work and struggling to find new opportunities. Without steady incomes, some have begun selling off assets, all while facing mounting pressure to support not only their immediate households but extended families as well. Some have shifted to private practice. Others have migrated to neighboring countries. Some have even considered crossing borders through irregular means in search of employment.
Read: One year after USAID’s shutdown, Ethiopian aid workers are still struggling
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Fighting back
Another U.S. policy that is expected to have significant implications for U.S. foreign assistance is the Mexico City Policy, which blocks U.S. funding to international NGOs providing services or information about abortion, even when those activities are funded by other donors.
Its recent expansion — prohibiting the use of U.S. foreign aid to promote “gender ideology,” “sex-rejecting procedures,” “discriminatory equity ideology,” and “unlawful DEI-related discrimination” and applying the rule to United Nations agencies, U.S. NGOs, and foreign governments — has raised significant concerns in the global health space. Health organizations fear it will increase unintended pregnancies, worsen maternal health outcomes, and disrupt many essential and urgent health services.
A group of global health experts championing gender justice and equity says organizations should push back and “organize collective resistance.” They recommended that “Health agencies, funders, professional associations, universities, and journals must reaffirm that evidence, ethics, and professional autonomy are nonnegotiable — even under political pressure.”
“Silence may feel pragmatic. But it is not neutral. And it is precisely what allows harm to spread,” they write in an opinion piece for Devex.
Opinion: As the US exports ideological harm in health aid, here’s how to resist it
Related: New US funding rules tie aid to abortion, gender ideology, DEI bans (Pro)
Is silence the best answer?
Silence can signal many things — indifference, calculation, or simply that there’s nothing left to say. At last week’s World Health Organization executive board meeting, it seemed to be the latter when the subject of the U.S. withdrawal surfaced.
A WHO report laid out the mechanics of Washington’s exit, including unresolved questions over whether the conditions for withdrawal have been fully met. But when member states were invited to respond, the room was — largely — quiet.
Israel broke the hush, declared that the U.S. withdrawal came into effect on Jan. 22, and that “there is no valid reason to further discuss this matter in any WHO forum.”
“Further discussions only consume the limited resources this organization has without carrying any actual impact on the ground,” the Israel representative said.
China chimed in, warning that major powers — without naming the United States — “should not treat the WHO as something to be used as it fits” nor “bypass the WHO” by setting up alternative mechanisms.
As for Argentina — which has also signaled its intent to leave WHO — several member states said that while the move is regrettable, they respect the country’s sovereign decision. Others noted that Argentina and WHO appear to hold differing legal interpretations of international law. Still, no delegation objected to a draft decision recommending that the World Health Assembly acknowledge Argentina’s withdrawal, effective March 2026.
Background reading: Can the US formally withdraw from WHO without paying its debts? (Pro)
Side note
ICYMI, at the same meeting, WHO member states also debated a super important topic: whether to keep the current dates for the World Health Assembly in May … or bump it back by a week.
The issue? Logistics. The Palais des Nations can’t accommodate all three main WHA meetings in May, meaning one committee would need to decamp to the WHO headquarters. For some member states — particularly those with smaller delegations — that’s less than ideal.
After some back and forth, they decided to stick with May 18-23.
So bring your walking shoes. We’ll see you there — just in time for Devex Impact House @ WHA, which is happening that same week. Get early access now.
MIA
Where oh where is LEN?
I’m talking about lenacapavir, the promising HIV prevention injectable, which WHO says is the next best thing to an HIV vaccine. The U.S. government said it plans to bring this latest innovation to 2 million people over three years. But Brendan Foley, who previously worked for PEPFAR, says it is “nowhere to be found” in the U.S. bilateral deals except for some mentions in press releases.
“Press releases do not stop HIV transmission,” he argues, urging African governments to set ambitious HIV prevention targets as part of their deals, helping signal the demand for LEN. One analysis suggests that there needs to be 10 million LEN users by 2030, to help bring its generic pricing down to as low as $25 per person per year.
Opinion: Where is HIV prevention drug lenacapavir in ‘America First’ health deals?
What we’re reading
In Uganda, U.S. funding cuts have led to condom shortages and the closure of clinics serving key populations — increasing the risk of HIV transmission. [The Intercept]
A study published in The Lancet suggests people living with obesity are 70% more likely to be hospitalized or die from infectious diseases such as flu and pneumonia. [The Guardian]
American pharma company Moderna says the U.S. Food and Drug Administration refuses to consider its application for a new flu vaccine, with the FDA citing concerns about the trial it conducted for the new vaccine. [Associated Press]
About the author
Jenny Lei Ravelo@JennyLeiRavelo
Jenny Lei Ravelo is a Devex Senior Reporter based in Manila. She covers global health, with a particular focus on the World Health Organization, and other development and humanitarian aid trends in Asia Pacific. Prior to Devex, she wrote for ABS-CBN, one of the largest broadcasting networks in the Philippines, and was a copy editor for various international scientific journals. She received her journalism degree from the University of Santo Tomas.
