The decision by Donald Trump’s administration to freeze USAID funds could have severe impacts on Mozambique and other countries dependent on foreign assistance. This is analysed by Una Galani, a columnist for the Reuters news agency , who warns of the economic and social consequences of the measure, especially in a global context of growing financial instability.
In January, the White House announced a 90-day suspension of US-funded development assistance, citing the need to assess the programme efficiency of foreign aid and its alignment with US strategic policy.
The measure directly affected the United States Agency for International Development (USAID), which is responsible for around 65 per cent of the 72 billion dollars (4.6 trillion meticals) that Washington has earmarked for foreign aid in 2023.
According to data from Foreign Assistance (an official US government website dedicated to making data on American foreign assistance available to the public) Mozambique is among the countries where international aid represents between 11% and 52% of gross national income per capita, alongside nations such as Syria, Somalia, South Sudan, Niger and Malawi. The freezing of funds has put crucial sectors such as public health, food security and community development programmes at risk, increasing the country’s vulnerability.
However, last Thursday (6), the US government announced an ‘emergency humanitarian exception’, allowing the immediate resumption of mother-to-child HIV/AIDS treatment and prevention services in 55 countries, including Mozambique. The decision revokes part of the initial suspension of foreign aid, ensuring that millions of people continue to have access to essential medicines.
The US State Department said that the agencies implementing the US President’s Emergency Plan for AIDS Relief (PEPFAR) have been instructed to speed up the resumption of these services. PEPFAR is the largest global initiative in the fight against AIDS and, without this reactivation, the interruption of assistance would jeopardise the continued treatment of thousands of people.
Despite this humanitarian exception, the suspension of US aid continues to threaten other strategic areas for Mozambique, including support for economic development and climate and social resilience programmes. For Alan Boswell, director of the International Crisis Group’s Horn of Africa project, Washington’s decision could further destabilise low-income countries, which are struggling to fill the financial gaps left by USAID’s withdrawal.
‘Despite this humanitarian exception, the suspension of US aid continues to threaten other strategic areas for Mozambique, including support for economic development and climate and social resilience programmes’
The freezing of assistance also comes at a time when the most fragile economies are facing financial pressures aggravated by global crises such as the covid-19 pandemic and the war in Ukraine. A World Bank report points out that in 2023, developing countries spent a record 1.4 billion dollars on servicing their foreign debt (89.5 billion meticals), representing around 4 per cent of their gross national income.
At a global level, the cuts in USAID could have a knock-on effect, making it difficult to access funding from other donors and multilateral institutions. The International Monetary Fund (IMF), for example, often uses USAID programmes as catalysts to attract more investment to indebted countries like Mozambique.
Should the funding freeze become final, Mozambique could face even greater challenges in maintaining essential social programmes, while the US administration reformulates its international assistance policy towards a more transactional model, aligned with US strategic interests.
The uncertainty over USAID’s future reinforces the warning of analysts like Una Galani, who emphasises that Trump’s approach could represent more than a financial cut, becoming a factor of instability for the countries that depend most on foreign aid.
Text: Felisberto Ruco
