The recent executive order by U.S. President Donald Trump to halt USAID funding to organisations outside the U.S. has sent shockwaves across Nigeria. With USAID playing a significant role in supporting healthcare, agriculture, education, and Infrastructure development, the sudden funding freeze has already led to job losses, programme cancellations, and fears of a broader humanitarian crisis. As Nigeria grapples with the consequences, the government and stakeholders must explore alternative funding mechanisms to mitigate the impact.
One of the most immediate effects is the Disruption of critical health interventions. Nigeria has been a major beneficiary of USAID’s healthcare programmes, receiving over $1 billion in aid in 2023. These funds support life-saving treatments, including antiretroviral drugs for people living with HIV, Tuberculosis management, and primary healthcare services. Without USAID’s support, experts warn that a surge in preventable deaths and new infections could occur, further straining an already fragile healthcare system. The loss of funding for Family Planning services is also expected to lead to increased population growth, exacerbating Poverty and social inequalities.
Agriculture and trade are deeply affected by the funding freeze.
Moreover, the Agriculture sector is also at risk, with USAID’s Feed the Future Initiative helping to boost Food Security by improving market access and agricultural productivity. The funding halt means smallholder farmers will struggle to adapt to climate change, access resources, and expand their businesses. In a country where millions depend on agriculture for their livelihoods, this setback could push vulnerable communities deeper into poverty. Additionally, initiatives supporting Trade facilitation, customs reform, and infrastructure development could face setbacks, slowing Economic Growth and weakening Nigeria’s competitive edge.
Furthermore, the impact extends beyond economic and social disruptions, highlighting Nigeria’s heavy reliance on foreign aid. While the immediate consequences are severe, some experts argue that this could serve as a wake-up call for the country to take greater responsibility for its development. The Nigerian government has already responded by approving $1.07 billion under the Human Capital Opportunities for Prosperity and Equity (HOPE) programme and allocating ₦4.8 billion for HIV treatment. These efforts aim to close some of the gaps left by USAID’s withdrawal, but whether they will be sufficient remains uncertain. Given the scale of projects previously supported by USAID, local funding sources may struggle to fully bridge the shortfall, leaving essential services vulnerable to further disruptions.
Diversification of funding sources is essential.
A long-term solution lies in diversifying funding sources beyond reliance on U.S. assistance. Nigeria must strengthen partnerships with other international organisations, the private sector, and philanthropic institutions to secure sustainable financing for key development projects. Encouraging local Investment in healthcare, agriculture, and infrastructure can also reduce dependency on external donors. Additionally, improved transparency and accountability in Government Spending will be crucial in ensuring that domestic resources are effectively allocated to critical sectors. Many donor-funded projects have suffered from inefficiencies and mismanagement, and addressing these issues could encourage more local and international Investors to step in.
While the funding freeze presents significant challenges, it also offers Nigeria an opportunity to rethink its approach to development financing. By prioritising local investment, fostering international collaborations beyond U.S. support, and strengthening domestic institutions, the country can build resilience against future funding uncertainties. Although the transition may be difficult, reducing reliance on external aid could ultimately lead to more sustainable and self-sufficient growth. However, this will require not just policy reforms but also a shift in mindset from dependence on aid to proactive domestic investment. Governments at all levels must commit to long-term planning that prioritises self-sufficiency in key sectors rather than short-term relief efforts.
Related Article: Role of foreign aid in Nigeria’s economy
Altogether, the U.S. decision to halt foreign aid funding to Africa has undoubtedly placed Nigeria in a difficult position, but the crisis underscores the need for proactive reforms. Investing in local capacity, improving governance, and seeking diversified funding sources will be essential for maintaining progress in key sectors. If Nigeria takes bold steps now, it could emerge stronger and less vulnerable to external shocks in the future. The coming years will test the country’s ability to adapt, but with the right policies and commitment from both the government and private sector, Nigeria can turn this setback into an opportunity for long-term development.