How Africa can respond to foreign-aid cuts?
A global storm is gathering — and Africa is directly in its path. Under President Donald Trump, the United States has frozen $40 billion in USAID funding, slashing 83 per cent of grants. European donor countries are also drastically cutting their foreign-aid commitments, signalling a broader shift in priorities. The devastating effects are already being felt across Africa, particularly in sectors like health care, education and social services, which have long relied on external support.
For decades, African governments have depended heavily on foreign aid, often at the expense of building sustainable domestic financing systems. But the current wave of aid cuts underscores an uncomfortable truth: foreign aid is inherently unreliable. It can be paused, reduced, or redirected at any time, without warning and is often subject to political shifts in donor countries.
The current financial crisis, then, should serve as a wake-up call. African countries must reclaim control of their futures by adopting bold, innovative strategies to close funding gaps and build resilient, self-sufficient health systems.
To this end, African governments must invest in homegrown financing solutions for essential public services. In the health sector, the main focus should be achieving universal health coverage through a robust, well-funded primary healthcare (PHC) system. Most donor-funded health initiatives — vaccinations, childcare, nutrition, sanitation and disease control — fall squarely within the PHC framework. According to the World Health Organization, up to 90 per cent of an individual's healthcare needs can be addressed at the PHC level.
Focusing on prevention and health promotion thus remains the fastest and most cost-effective way to improve health outcomes across Africa. Preventive PHC measures such as childhood vaccinations, hypertension screenings, prenatal care and nutrition services could significantly reduce mortality rates among mothers and children under five. Malnutrition alone contributes to nearly half of all deaths among children in this age group, underscoring the urgent need for early, community-based care.
Unfortunately, more than four decades after the 1978 Alma-Ata Declaration defined PHC as the foundation of equitable healthcare, many of its goals remain unfulfilled. Consequently, African governments must develop independent health financing mechanisms to ensure long-term accessibility and accountability.
Health insurance represents an opportunity for African countries to draw on their cultural traditions of collective responsibility and community-based support. South Africa's Zulu people live by the principle of Ubuntu — 'I am because you are' — while the Igbo people of Nigeria uphold Ìgwèbụ̀íké ('strength in unity'). These deeply rooted values mirror the essence of health insurance: protect individuals by pooling resources.
Rwanda and Morocco offer compelling models for strengthening PHC systems and expanding access. Rwanda's community-based health insurance, rolled out nationwide in 2004, now covers more than 90 per cent of the population, making it one of Africa's most effective health financing models. The scheme is funded through a combination of member premiums, government contributions, international donors and other mechanisms. It is also supported by roughly 59,000 community health workers, who serve as vital links between households and formal services. Over the past two decades, the programme has reduced financial barriers and decentralised service delivery, bringing health care to the communities that need it most.
In Morocco, the government introduced a dual national health insurance system in 2005: Assurance Maladie Obligatoire (AMO) for workers in the formal sector and (Régime d'Assistance Médicale) for informal workers. In 2022, these programmes were consolidated into the AMO-Tadamon programme, enabling beneficiaries to access both public and private facilities.
This reform not only eased pressure on public-health facilities but also promoted equitable access through strategic financing, with insurance coverage surging from just 15 per cent in 2005 to nearly 80 per cent today. In 2023, the World Bank approved a $450 million programme-for-results loan to advance universal health coverage in Morocco and increase access to quality care.
The need for universal coverage in Africa is particularly urgent as the continent faces a surge in noncommunicable diseases (NCDs), including hypertension, heart disease, diabetes and cancer. Collectively, NCDs — driven by unhealthy diets, sedentary lifestyles and excessive alcohol and sugar consumption — claim 41 million lives annually, with 32 million deaths occurring in low- and middle-income countries.
As foreign aid shrinks, African leaders must adopt bold policies that encourage healthier lifestyles and boost domestic revenue. One such solution is taxation. As the WHO's Sugar Tax Report shows, taxing sugary beverages reduces consumption and lowers the risk of obesity and diabetes. Experts at the recent Global NCD Alliance Forum underscored the need for stronger excise taxes across Africa to curb the growing NCD epidemic and generate sustainable revenue streams for public-health investments.
South Africa and Mexico demonstrate the promise of such measures. Mexico implemented a one-peso-per-litre excise tax on sugar-sweetened beverages on January 1, 2014 and consumption of sugary drinks fell by 7.6 per cent over the two-year period from 2014 to 2015. In South Africa, a 2018 sugar tax led to a 51 per cent reduction in purchases of sugary drinks, 52 per cent reduction in calories and 29 per cent reduction in the volume of beverages purchased per person per day.
Diaspora remittances represent a promising and sustainable source of funding. While talent continues to leave Africa, remittances also create a powerful 'brain gain,' delivering a stable flow of funds to the continent. In 2024, remittances to Africa exceeded $100 billion, outpacing foreign aid. Diaspora Nigerians alone accounted for 20 per cent of this figure. Globally, remittances reached $590 billion in 2020, far surpassing official development assistance, which stood at $180 billion and philanthropic outflows, which totalled $70 billion. If African countries had allocated just 1 per cent of every remittance dollar to health insurance — as I proposed in 2019 — the $100 billion in remittances sent by the African diaspora in 2024 could have generated $1 billion for health care, bringing the continent closer to achieving universal health coverage.
But to unlock remittances' full potential, African governments must improve governance, strengthen accountability and foster trust with diaspora communities. Of course, Africa is not a monolith. Solutions must be tailored to each country's unique context, complementing broader efforts to boost domestic resource mobilisation.
What is clear, however, is that lasting independence depends on financial self-reliance. For African countries to control their financial futures, they must ensure that they can fund essential services like health care without relying on external support. @Project Syndicate, 2025
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