Reflecting on global aid cuts and the potential alternatives
Previous posts on this blog touched on the upheaval in the development sector due to aid cuts and its implications, both short and long-term. One of those implications is the rise of diverse approaches to development assistance. This latest article reviews a few of these potential solutions as organisations and stakeholders adjust to the changing aid environment.
2025 has seen massive global aid cuts by the West, particularly the US, UK and other major funders. As a result of this, decades of progress in global health and development, especially in areas like maternal and child health and infectious diseases, are at risk of being undermined. Shrinking development assistance also means low and middle-income countries (LMICs) dependent on international aid need to source for alternative funding to bridge the growing gap.
In other to adapt to these changes in external funding, experts advocate urgent measures to address the attendant financing crisis. From increasing domestic financing to improving efficiency in the use of limited funding - the race is on to implement strategies to mitigate the consequences of dwindling donor support.
There is no doubt that developing countries need to begin to take concrete action towards achieving self-reliance in the face of declining international aid. One critical aspect of this process is domestic financing. There have been repeated calls for LMICs, particularly those in Africa to prioritize domestic financing1. This way, governments can ensure that funding meets local priorities and protects the most vulnerable populations1. Some experts argue that aid recipient countries need to not only increase domestic financing, but also consider concessional lending and blending grants with loans2. Strategies such as documenting country responses to the funding crises, including policy options, have also been suggested2. Some of these countries have already begun making commitments to increased domestic revenue collection and transparency to better serve their populations3.
Another approach is examining alternative forms of support for poorer countries such as assistance with debt payments. Over 50% of African countries spend more on debt repayment than healthcare or education due to high interest rates and persistent inflation3. The continent’s debt burdens make investing in health and other aspects of human development more difficult. Indeed, African countries face a triple threat of rapid population growth, reduced resource availability as well as decreasing global support1. Rethinking how international institutions analyse debt is therefore needed1.
Increased efficiency in the use of limited funding has also been suggested. Some experts advocate a more simplified approach to project implementation. They argue that by prioritising a few high-impact and cost-effective interventions, limited funding can be used more efficiently and be more beneficial to recipient countries4. In line with this, the head of the Gates Foundation, Mark Suzman, advocates the adoption of existing funding models like Gavi and Global Fund. These models, while reducing cost, emphasize private sector partnership and encourage self-reliance of governments through capacity building of local health ministries3. Directing domestic funding to supporting local NGOs and community programs can also help reduce administrative costs and improve efficiency.
These strategies are definitely steps in the right direction with regards to rethinking development financing. African governments need to step up and take a greater lead in domestic financing. Debt support and increased efficiency in how existing funds are used, are also necessary. However, in light of the severity of aid cuts, it will require time and consistency before any significant progress can be achieved.
1. Saldinger A. (2025). As aid declines, Africans must take a greater lead on health financing. Devex. https://www.devex.com/news/as-aid-declines-africans-must-take-a-greater-lead-on-health-financing-110151?
2. Rasnathan K. et al. (2025). Navigating health financing cliffs: a new era in global health. The Lancet. https://www.thelancet.com/journals/lancet/article/PIIS0140-6736(25)00720-2/fulltext
3. Mark Suzman (2025). The head of the Gates Foundation on how to keep helping the poor as aid shrinks. The Economist. https://www.economist.com/by-invitation/2025/04/14/the-head-of-the-gates-foundation-on-how-to-keep-helping-the-poor-as-aid-shrinks
4. Glennerster R. and Siddhartha H. (2025). Radical Simplification: a practical way to get more out of limited foreign assistance budgets. Center for Global Development. https://www.cgdev.org/blog/radical-simplification-practical-way-get-more-out-limited-foreign-assistance-budgets