OPINION | Foreign aid won’t make SA a developed nation, we need to rethink path to sustainable growth

One of Donald Trump’s earliest decisions upon taking office as US president was to suspend several foreign aid programmes – an initiative that had historically benefited more than 20-million people globally, particularly in the health sector.

SA was not spared. Trump justified the cuts by citing the country’s land expropriation policy “without compensation” – a statement widely dismissed as misinformed.

The announcement was met with concern and disappointment in SA. President Cyril Ramaphosa, speaking at a Democratic Nursing Organisation of SA’s ninth national congress meeting, described the decision as a “wake-up call” for the country to become more self-reliant, particularly in the fight against HIV/Aids and tuberculosis.

SA lost approximately R365m in donor funding, including a five-year, $10.5m USAID grant. The cuts significantly disrupted HIV and TB programmes, immunisation campaigns, and community-based healthcare services – impacting 698 healthcare centres nationwide.

However, the decline in foreign aid did not begin with Trump. The UK has steadily reduced its global aid contributions, while the EU has redirected funding away from sub-Saharan Africa towards Ukraine. Critics argue that Trump’s approach represented not just a shift in strategy, but an overt dismantling of USAID, devoid of developmental foresight.

USAID, established during the Cold War under President John F. Kennedy, was initially designed as a strategic foreign policy tool. Over the decades, the rationale behind aid has evolved. Today, aid is commonly distributed according to three criteria: donor interest, recipient interest, or mutual benefit.

While early foreign assistance prioritised developmental outcomes, the post-millennium era saw a growing emphasis on recipient welfare. This trend is now reversing. The US and EU are increasingly motivated by geopolitical interests and reciprocal economic benefit.

In 2023, SA was one of several African countries – including Nigeria, Kenya, South Sudan, Uganda, Tanzania, Zambia and Malawi – that each received over $400m in development support from USAID. Others included Somalia, the DRC, and Mozambique.

But as global challenges such as climate change, migration, and economic transformation take centre stage, aid is increasingly framed around shared strategic concerns rather than humanitarian imperatives. Donors now look to foster partnerships in sectors like critical minerals and renewable energy. SA’s role in the production of these commodities lends it renewed strategic significance.

This shift in aid allocation priorities has diluted focus on traditional goals such as poverty alleviation, education, and public health.

Concerns have arisen over the structure of this funding. At Cop27 in Sharm el-Sheikh, Ramaphosa urged donor countries to honour their pledges, noting that only 3% of the promised funds comprised actual grants. The remaining 97% consisted of commercial loans – often with stringent repayment terms – undermining the unconditional support heralded at the Glasgow summit.

As these global dynamics shift, SA finds itself at a crossroads – confronting the loss of donor support while seeking new, mutually beneficial partnerships. The real challenge lies in ensuring these relationships are equitable and developmental rather than debt-driven.

Nonetheless, SA can continue to advance its development objectives without direct reliance on USAID. Human development indicators provide a broader lens to assess progress. In the 1950s, average life expectancy globally was in the 40s; today, it has risen dramatically.

In the wake of reduced USAID funding, SA must rethink its development strategy to address persistent crises: poverty, inequality, unemployment, and climate change. The country has made notable strides since 1994, yet it remains underrepresented on the global stage. The international system established after the second world war has marginalised voices from the global south, including SA.

SA’s exclusion from key global governance structures reflects a broader strategy by dominant powers – chiefly the US and EU – to preserve a system that advances their interests. Institutions such as the IMF and World Bank face legitimacy challenges due to their skewed representation. Developing nations have increasingly questioned whether these institutions remain fit for purpose.

Meanwhile, countries such as China and India are stepping in with alternative aid models, often focused on infrastructure rather than social development. These partnerships tend to prioritise commercial interests, as opposed to the US approach which historically linked aid to democratic reforms.

The withdrawal of USAID could thus accelerate China's rise as Africa’s primary development partner. But this comes with challenges. Many African nations – including SA – may soon need to shoulder the costs of essential services once funded by donors: HIV treatments, and vaccines.

In the coming years, debt sustainability is poised to become the central issue in global development policy. SA and its peers must now take charge of shaping a new era of development – one that transcends donor dependency, prioritises equity, and secures long-term prosperity.

• Mabasa is executive manager in the office of the deputy minister of mineral & petroleum resources