The International Monetary Fund (IMF) warned this week that cuts in donor aid to African countries could reduce funding by up to $7 billion and represent “the biggest macroeconomic blow” these countries face.
Ethiopia, the Democratic Republic of the Congo, and Nigeria are the countries most affected. Compounding the situation is the fact that humanitarian aid agencies are also facing funding cuts.
“Aid cuts will deal the biggest macroeconomic blow to low-income countries and fragile and conflict-affected countries,” reads a special analysis distributed alongside the economic report on Sub-Saharan African countries as part of the Spring Meetings taking place this week in Washington.
In these countries, “the heightened uncertainty surrounding the cuts, capacity constraints, limited fiscal space, and painful policy choices mean that the reductions will translate into stronger headwinds to growth, worsened humanitarian conditions, and more intense fiscal pressures than in previous shocks.”
In the analysis, the IMF notes that there have been other waves of cuts in foreign aid to African countries, but warns that “this time is different,” emphasizing that “even countries with sufficient reserves to offset the cuts will face a deterioration in their fiscal positions.”
The amount of bilateral aid to African countries fell by between 16% and 28% last year, according to the IMF, citing OECD data, which puts the decline at between $4 billion and $7 billion, or between 3.3 and 5.9 billion euros compared to 2024 levels, mainly due to the closure of the U.S. Agency for International Development (USAID).
Ethiopia, the Democratic Republic of the Congo, and Nigeria are the countries most affected in terms of absolute value, but the IMF says the cuts will be felt most acutely in countries where the amount, though smaller, represents a larger percentage of international funding.
Thus, the IMF cites, for example, South Sudan and the Central African Republic, which could lose aid amounting to more than 10% of their public revenues, with humanitarian aid being the most affected.
Compounding the situation is the fact that international humanitarian aid agencies themselves are facing funding cuts, the IMF adds.
