What you may not know about US aid to Africa under Obama

U.S. President Barack Obama with African leaders. Obama will be leaving Wednesday, June 26, for a weeklong trip to sub-Saharan Africa. Photo by: Pete Souza / The White House

On Wednesday, U.S. President Barack Obama begins his much-anticipated weeklong trip to sub-Saharan Africa, his first to the region since a 20-hour stop in Ghana in 2009. The U.S. president will visit Senegal, South Africa and Tanzania — three countries that fit nicely into the administration’s emphasis on promoting democracy and good governance.

While in Tanzania, Obama is expected to announce a major power generation and electrification initiative for sub-Saharan Africa. The move is almost certain to draw comparisons with his predecessor, George W. Bush, who will be making his own visit to the region next week. Just over a decade ago, then-President Bush had initiated the U.S. President’s Emergency Plan for AIDS Relief or PEPFAR, a landmark U.S. aid initiative that has saved the lives of millions across Africa.

Since succeeding Bush more than four years ago, Obama has rolled out three marquee development initiatives: the Global Health Initiative, Feed the Future and the Global Climate Change Initiative. While the three initiatives have poured billions in U.S. aid money into sub-Saharan Africa, none are singularly focused on the region, fueling the perception that Africa hasn’t been nearly as high up on the U.S. aid agenda under Obama.

Ahead of Obama’s trip to sub-Saharan Africa, here are six things you may not know about the current administration’s aid program to the region. (See infographic below on U.S. foreign aid to sub-Saharan Africa.)

1.  U.S. aid program in sub-Saharan Africa not spared from budget cut backs

After more than quadrupling during the Bush administration, U.S. aid to sub-Saharan Africa has fallen sharply since 2009 — a casualty of belt-tightening in Washington following the global financial crisis. For fiscal 2014, Obama has proposed $6.6 billion in assistance to sub-Saharan Africa, 4 percent above last year’s request but still 20 percent below fiscal 2009 levels. Only the U.S. aid budget for East Asia and the Pacific — roughly a tenth of U.S. aid spending in sub-Saharan Africa — is likely to exceed 2009 levels next fiscal year.

Yet buoyed by broad, bipartisan backing for U.S. development engagement in sub-Saharan Africa, the region does continue to receive the second-largest portion of U.S. foreign aid, after the Middle East and North Africa. In fiscal 2014, sub-Saharan Africa is slated to garner its largest-ever share of the U.S. foreign aid budget — 36 percent — up from 33 percent in 2009.

2. Global health programming garnering larger share of U.S. aid to sub-Saharan Africa

The rapid expansion of the Bush administration’s aid program in sub-Saharan Africa was largely driven by a surge in U.S. global health spending. The Obama administration has increased the share of Africa health assistance spending even further. For fiscal 2014, the Obama administration has set aside 70 percent of its aid budget for the region to health programming, up from 55 percent in 2009. Next year’s proposed U.S. health aid budget for sub-Saharan Africa of $4.6 billion will be just slightly above fiscal 2009 levels.

The Global Health Initiative — one of the administration’s marquee development initiatives — was first introduced by Obama during his 2009 visit to Ghana. Designed to strengthen and streamline the U.S. global health regime, 19 of GHI’s 29 focus countries are located in sub-Saharan Africa.

3. In higher-income sub-Saharan countries, PEPFAR plans to reduce footprint

The bulk of U.S. health assistance to sub-Saharan Africa continues to support HIV and AIDS programming under PEPFAR. The current administration has, however, set in motion plans to scale back PEPFAR programming in three of the four upper-middle-income sub-Saharan countries that are major recipients of U.S. foreign assistance: South Africa, Namibia and Botswana. U.S. aid officials emphasize that the three countries are well-positioned to gradually assume more of PEPFAR’S financial and managerial burden.

In South Africa — home to one of the largest U.S. aid programs in the region — PEPFAR funding is expected to drop to $250 million in fiscal 2017, down from $484 million in fiscal 2012. In Botswana, PEPFAR’s budget is anticipated to fall from $75 million in fiscal 2012 to $35 million in fiscal 2016. And in Namibia, PEPFAR has announced plans to cut aid to the country by $10 million to roughly $80 million for fiscal 2014.

4. Growth in U.S. democracy, human rights and governance aid funding for sub-Saharan Africa

U.S. officials have indicated that after its three marquee aid initiatives, democracy and governance is the administration’s next priority for its aid program in sub-Saharan Africa. “Africa does not need strong men. It needs strong institutions,” Obama had stressed before Ghana’s parliament in 2009.

In line with the administration’s policy statements, democracy and governance programming has been largely spared from cuts to Obama’s aid budget for sub-Saharan Africa. Since fiscal 2009, U.S. democracy and governance assistance to the region has actually grown by 19 percent to requested levels of $313.9 million in the current fiscal year. The democracy and governance sector currently claims about 5 percent of U.S. aid spending in sub-Saharan Africa. Moreover, according to the U.S. Agency for International Development’s country development cooperation strategies — including for Ghana and Senegal — the lead U.S. aid agency has also begun to integrate benchmarks for improving governance in its programming in the region.

5. Performance-based aid engagement with Africa extended beyond MCC

Also consistent with its pledge to promote good governance in sub-Saharan Africa, the Obama administration continues to channel a sizable portion of U.S. aid to the region through the performance-based U.S. aid agency, the Millennium Challenge Corp. Established by the Bush administration in 2004, MCC’s roughly $900 million annual budget is disbursed to countries which demonstrate a commitment to good governance, economic openness and social sector investment. Nine of MCC’s 15 active compacts are currently with sub-Saharan countries. In addition, MCC has selected six sub-Saharan countries — Benin, Ghana, Liberia, Nigeria, Sierra Leone and Tanzania — to develop proposals for either their first or second compact.

The administration’s backing for performance-based aid in Africa has not been limited to MCC. Ghana and Tanzania have also been named among the four participating countries in the administration‘s Partnership for Growth initiative. Launched in 2011, PFG is designed to mobilize resources and expertise from both the U.S. government and select bilateral partners to jointly address constraints to broad-based economic growth.

6. Sub-Saharan Africa a focus for U.S. aid regime’s engagement with the private sector

With its aid budget for sub-Saharan Africa significantly diminished, the Obama administration has been aggressively tapping the private sector for resources and expertise to support its development engagement in the region. Most notably, during the U.S. presidency of the G-8 last year, Obama unveiled the New Alliance for Food Security and Nutrition. Aiming to lift 50 million people out of poverty in the region by 2022, the global partnership of G-8 members, African governments, and both Western and African companies has mobilized more than $3.7 billion in private investment in African agriculture since May 2012. According to USAID, which plays a key role in the new alliance, 39 percent of the agency’s 200 active public-private partnerships are in sub-Saharan Africa — more than in any other region.

The administration has also stepped up efforts to incentivize U.S. private sector engagement in sub-Saharan Africa — particularly in the clean energy sector — through its trade and export promotion activities. Directed by its charter to expand its financial commitments in sub-Saharan Africa, in August 2012, the Export-Import Bank of the United States revealed plans to finance the transfer of up to $2 billion in U.S. clean energy technologies, products and services to South Africa.

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About the author

  • Lorenzo Piccio

    Lorenzo is a former contributing analyst for Devex. Previously Devex's senior analyst for development finance in Manila.