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When the Tap Runs Dry
For decades, Nigeria has operated within a donor-led development finance architecture, with the United States Agency for International Development (USAID) as one of its most significant partners. Between 2015 and 2024, USAID channelled about $7.8 billion in foreign aid to critical sectors in Nigeria, such as health, agriculture, education, economic growth, democracy, human rights, governance, the environment, peace and security, and humanitarian assistance.
Through flagship programmes like the Feed the Future Nigeria Rural Resilience Activity (2019–2024), USAID facilitated economic recovery and livelihood support for over 500,000 people, including vulnerable women, persons with disabilities and internally displaced persons. The agency also provided vital HIV prevention, care, and treatment services through programmes such as the U.S. President’s Emergency Plan for AIDS Relief (PEPFAR) and the President’s Malaria Initiative (PMI). The U.S. Embassy and consulate in Nigeria have estimated that these interventions have protected over 31%, or 68 million Nigerians, from malaria, contributed to a decline in child deaths by 16 percent over 10 years and helped reduce national prevalence from 42 percent to 23 percent. Similar impact stories have been recorded in the education sector, where millions of children and youth have witnessed improved early-grade reading skills or expansion of access to children whose schooling was disrupted by conflict. Over time, this steady flow of external support has become deeply embedded in Nigeria’s development finance landscape, shaping both policy priorities and service delivery.
That architecture faced an abrupt shock in January 2025, when a U.S. executive order triggered a 90‑day pause on nearly all foreign aid, effectively halting most USAID‑funded activities in Nigeria. By March, 83 percent of USAID’s programmes worldwide had been terminated, including major health, education, and humanitarian projects, and over 5,200 contracts were cancelled. The funding freeze is most significantly affecting the Nigerian health sector. With over 80% of its funds tied to USAID, the USAID funding freeze disrupted HIV and malaria prevention efforts, stalled nutrition and maternal health programmes, and jeopardised emergency food assistance. In 2024 alone, the USAID assistance to Nigeria totalled $767 million, including $370 million in health funding, $25 million in education, and $7.8 million on agriculture. While a handful of critical health services received temporary waivers, the pause revealed how much essential public services and local development initiatives depend on sustained external financing.
While external funding has delivered undeniable gains, it has also left gaps in domestic capacity to finance, manage, and sustain these services independently. The USAID pause was not only a budgetary crisis but also a stress test of resilience, revealing both the agility of some state and non‑state actors to mobilise alternative resources and the structural weaknesses that leave entire sectors exposed to donor decisions. Yet, in the face of such shocks, Nigeria’s resilience has often emerged, demonstrated through the adaptive responses of both state institutions and civil society actors, which highlights the essential role of domestic development financing in navigating donor uncertainty.
This Blog was first published by the United Nations office for South-South Cooperation (UNOSSC)
