The French Development Agency (AFD) says development finance agencies are unlikely to replace the up to $50bn in annual foreign assistance provided by the US to African countries.
The expected reduction in aid from other countries, including dwindling aid from other countries such as Germany, Italy, the UK and the Netherlands, further complicates the situation, said Papa Amadou Sarr, AFD executive director for mobilisation, partnership and communication.
Meanwhile, EU leaders are preparing to ramp up their respective defence budgets after US President Donald Trump’s withdrawal of support for Ukraine.
“We’ve been discussing with our partners like [German development bank] KfW, Italians and the British … and I will not say it’s not possible, but it will be difficult to fill the gap,” Sarr told Business Day.
The AFD and other development agencies can provide some support through loans, subsidies and technical assistance, but they will not fully replace the resources provided by the US, Sarr said.
“The resources the USAID has been deploying [were immense] especially in sectors that are critical here in Southern Africa [including] in the area of health and disease control,” Sarr said, adding a reduction in US assistance could lead to a decline in these critical health programmes, affecting millions of people.
For SA, the US allocated $440m in aid in 2023, the latest year for which US government figures are available, of which $364m went to healthcare.
SA is also set to lose more than $1bn in US climate financing after the Trump administration pulled out of the Just Energy Transition Partnership (JETP), aimed at helping developing countries to decarbonise.
KfW has matched a $317m loan provided by AFD in 2022 as part of the JETP.
The decision to halt climate financing to SA follows a February 7 order to pause certain foreign aid programmes as part of a broader review of US foreign assistance.
The executive order signed by Trump also follows the signing of the Expropriation Act, which allows for the state to expropriate land in the public interest with nil compensation.
Trump has misleadingly cited the legislation as being behind widespread confiscation of farmland.
The SA government has sought to use diplomatic channels to counter Trump’s allegations and to restore relations between the two countries. But with the outcome likely to be unfavourable, its access to the US preferential trade programme under the African Growth and Opportunity Act is widely expected to be affected.
Trump’s administration has also been as critical of SA’s leading role in the genocide case against Israel at the International Court of Justice. The US has dismissed these allegations as baseless.
Update: March 10 2025
This story has been updated with figures regarding US climate financing.
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