The Trump administration’s drastic reductions to USAID funding, including a recent halt to some lifesaving humanitarian programs, have sent shockwaves from D.C. to remote communities around the world — including in Somalia, where I work.
These cuts, while sudden and poorly executed, are not surprising. They reflect an accelerating post-pandemic trend, a steady retreat from development aid. The Organization for Economic Cooperation and Development recommends that donor countries allocate at least 0.7 percent of their gross national income to development assistance. Few countries ever meet this target. The U.S. never has.
Even traditionally generous donors are scaling back: Sweden halved its aid budget in 2023, France cut 800 million euros (a 13 percent drop) and the U.K.’s aid budget fell to a 17-year low.
As an African woman working in the humanitarian and development sector, I don’t think this is necessarily a tragedy. The global aid system is broken — and has been for decades.
It’s not just critics like the Heritage Foundation, which decades ago wrote about “How American food aid keeps the Third World hungry.” Even insiders have acknowledged the system’s flaws. An ActionAid report from two decades ago concluded that aid “is not geared to achieving the poverty reduction goals.” More recently, the Lancet observed, “The humanitarian system is not just broke, but broken.”
Yes, USAID has saved lives and relieved suffering — including among my own people in Somalia. But despite decades of effort and substantial funding, it has not helped any country transition fully out of poverty and aid dependency.
That is why, while I deplore the reckless manner of these cuts, I welcome the opportunity they present: to build a better aid system that supports self-reliance and strengthens the social contract.
As Washington begins to imagine what could replace USAID, I wish to offer five guiding principles for a new approach.
First, address debt. In June 2024, Kenya spent nearly 70 percent of its revenue on debt service. Many other countries face the same crisis. Freeing these resources would allow governments to invest in essential services like health and education — services that should not depend on aid.
Second, reduce and rebalance the role of intermediaries. Aid today flows through a crowded web of intermediaries — including international non-governmental organizations, private contractors and United Nations agencies. While these groups offer valuable expertise, the humanitarian system they dominate is bloated and inefficient.
For example, only 11 percent of USAID funding goes directly to local organizations and governments. The rest is funneled through this network of intermediaries — American nonprofits and contractors, U.N. agencies and U.S. government agencies — diluting its impact before it reaches communities it is meant to serve.
It’s time to reduce the reliance on international NGOs and contractors. Instead, we must fund national governments and local actors directly, wherever possible. The U.N. should return to its core role: providing technical assistance, coordination and guidance — not running aid programs in ways that create parallel systems and erode trust in national institutions.
This kind of reform isn’t theoretical. Consider Nigeria’s recent decision to reallocate $200 million to sustain critical health services after U.S. cuts. This shows how aid dependency can lead governments to abdicate their responsibilities and how aid withdrawal can catalyze accountability.
Third, support civil society. When governments cannot meet basic needs, donors should fund local organizations directly. These groups fill essential gaps and hold governments accountable. Research shows they often deliver services more efficiently and cost effectively than larger international players.
Fourth, philanthropy must be more strategic. Rather than propping up large NGOs, philanthropy should support local organizations that are more effective and better aligned with community needs. Innovative platforms, like NEAR’s Change Fund or my organization’s Proximate Fund, offer mechanisms to reach grassroots groups directly. These models show what strategic, trust-based philanthropy can look like. The future of philanthropy should not be about sustaining a bloated humanitarian system but focused on fueling local solutions that reduce aid dependency.
Fifth, invest in infrastructure, which is the first pillar in the World Bank’s development trifecta: infrastructure, trade and industrialization. These are the enablers of a country’s journey from aid dependence to prosperity.
If the U.S. intends to adopt an outcomes-focused approach to aid — such as Secretary of State Marco Rubio’s proposed test: Does it make America stronger, safer or more prosperous? — then infrastructure is a natural focus. China’s Belt-and-Road Initiative has funded extensive infrastructure across Africa: 13,000 km of railways, nearly 100,000 km of highways, roughly 1,000 bridges and almost 100 ports.
While some criticize this model for fostering debt dependency, many African leaders view these projects as essential investments in their long-term development. They would welcome a similar approach from Western donors — one that delivers the infrastructure needed to fuel economic growth, not one that sustains an aid industry dominated by foreign actors.
The unraveling of the entrenched global aid system is an invitation — perhaps the most important one in decades — for us to build something better: a leaner, more effective and accountable system that truly delivers for the people it intends to serve.
Degan Ali is the executive director of Adeso, an African-led nonprofit incubating ideas and enterprises to decrease aid dependency.
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