Life support or first aid for USAID?

By Rébat Jaff *

Under the Trump administration, there has already been a notable shift in U.S. engagement with the world, particularly in how the U.S. allocates foreign aid and approaches development strategies. While some analysts expected a significant reduction in U.S. funding to the continent, others suggested that the administration’s approach could be seen as a strategic pivot rather than a full retreat.

Changing Paradigms in U.S.-Africa Relations

A key element of the Trump administration’s foreign policy has been the « America First » approach, which emphasizes national interests, security, and economic prosperity. This policy has reshaped U.S. relations with the world, with a shift from traditional aid programs to a focus on business and trade partnerships.

In this new model, the Trump administration sees business investments as more effective than traditional aid in promoting sustainable growth and stability. Trump argues that this shift reflects a broader global trend where economic collaboration, rather than aid dependency, is prioritized. While this transition might involve fewer projects and less funding for sectors like climate change and gender equity, there will be a growing emphasis on sectors that align more closely with U.S. economic interests.

Key Focus Areas and Strategic Partnerships

For Africa, the Trump administration has identified specific nations and industries that align with U.S. economic goals. Some of these include:

• Kenya and Ethiopia for Textiles: These countries are positioned to provide textiles at competitive rates, benefiting from infrastructure and a skilled workforce.
• Ghana for Cocoa: With increasing demand for high-quality cocoa, Ghana is a critical partner in meeting U.S. needs in the chocolate industry.
• Democratic Republic of Congo for Cobalt: The DRC’s vast cobalt reserves are vital to the production of batteries and high-tech goods, making it a key component of U.S. strategies to secure essential minerals.

These shifts highlight a focus on mutual economic benefit, moving away from aid dependency and toward long-term, economically driven partnerships.

Business Over Aid: The Economic Argument

The Trump administration views the business-driven approach as having the potential to surpass traditional aid models. By fostering investment and collaboration, the U.S. argues, it will create long-lasting partnerships that promote innovation, job creation, and economic development. According to Trump, this shift also aligns with national security objectives, as a prosperous and stable Africa that aligns with American interests is less likely to fall under the influence of rival powers.

A central element of U.S. policy in Africa under the Trump administration has been countering China’s growing influence on the continent. China has established a strong presence in Africa through infrastructure investments, security partnerships, and trade deals. In response, the U.S. seeks to leverage its competitive advantage in market-based capitalism, claiming to offer African nations an alternative approach based on business and innovation.

For African leaders, the U.S. shift toward business-focused engagement requires new thinking and adaptability. Governments will need to foster economic collaboration on a larger scale, moving away from reliance on aid and focusing more on mutually beneficial economic partnerships. Those who successfully navigate this transition may find new opportunities for growth and development.

Pros and Cons of This Approach

Pros for the Business Sector:

1. Sustained Investment and Job Creation: The focus on business investments offers the potential for sustained economic growth, job creation, and industrial development, particularly in sectors like textiles, cocoa, and minerals.
2. Long-Term Economic Partnerships: Businesses can establish long-term relationships with African governments and industries, creating a more stable economic environment.
3. Innovation and Infrastructure Development: Business-driven approaches often spur innovation and infrastructure development, benefiting both the U.S. and African nations.
4. Increased Competition: The push for market-based approaches could lead to greater competition, fostering innovation and efficiency in industries across Africa.

Cons for the Business Sector:

1. Potential for Short-Term Profit Focus: While businesses may seek long-term gains, there could be a tendency to prioritize short-term profits over sustainable development, potentially undermining long-term growth.
2. Vulnerable to Market Fluctuations: Business investments are subject to market fluctuations, which could lead to instability in industries that rely heavily on external investments.
3. Limited Focus on Social Development: Business investments may not prioritize social sectors like health, education, and gender equity, which are critical for broad-based development.
4. Dependence on U.S. Interests: Countries that partner with the U.S. may become more dependent on U.S. economic needs, which could limit their ability to diversify their economies.

Pros for the Foreign Aid Sector:

1. Reduced Aid Dependency: A shift away from aid dependency can encourage African countries to pursue more sustainable, self-reliant development strategies.
2. Economic Growth and Development: Business-focused engagement may lead to greater economic growth, which can indirectly contribute to poverty reduction and improved living standards.
3. Increased Regional Stability: Prosperous economies are often more stable and less prone to conflict, which can enhance the overall security of the region.
4. Broader Engagement with Global Markets: African countries may gain better access to global markets through business partnerships rather than aid-driven relationships.

Cons for the Foreign Aid Sector:

1. Reduced Focus on Social Services: With less emphasis on traditional aid, critical sectors like healthcare, education, and social services may receive less attention and funding, potentially exacerbating inequality.
2. Vulnerable Populations at Risk: Some of the most vulnerable populations might not benefit from business investments and may continue to rely on aid for basic needs.
3. Potential for Unequal Benefits: Business investments may benefit only certain industries or regions within African countries, leading to uneven development and leaving some populations behind.
4. Impact on Global Humanitarian Networks: A reduced role for U.S.-funded humanitarian programs could strain global efforts to address crises and emergencies, especially in regions that require immediate relief.

While the shift from foreign aid to business-driven partnerships may be rooted in a genuine desire to foster long-term development and reduce dependency, such a transition demands careful, deliberate planning and an incremental approach. The strategic reorientation must be underpinned by a comprehensive vision that prioritizes inclusivity and equity, ensuring that the most vulnerable populations are not marginalized in the process. This evolution must be accompanied by targeted interventions that provide the necessary support for those who may require additional time and resources to navigate this shift. Only by maintaining a steadfast commitment to helping these groups transition successfully can we ensure that the benefits of this new strategy are distributed equitably. A thoughtful, well-paced transition, where economic self-sufficiency is pursued without abandoning the vulnerable, will create a foundation for truly sustainable and holistic development that benefits all segments of society, fostering a resilient and prosperous future across the continent.

*Rébar Jaff

Rébar Jaff is an expert in sustainable development program design, policy analysis, and humanitarian aid. He has held positions with NGOs, the OECD in Paris, the UN Secretariat in New York, and various UN agencies in the Middle East and the Caribbean. Notably, he served as Secretary to the Advisory Board of UN Secretary-General António Guterres on disarmament matters.