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The Trump administration plans to slash $555 million in funding for the African Development Bank’s main development fund as part of sweeping cuts to foreign aid. Under a proposal submitted to the US Congress on Friday, Washington would end all contributions to the African Development Fund for the continent’s low-income countries next year as the White House said it was “not currently aligned” to its priorities.
The move creates a hole in the AfDB’s own plans and will likely force a reset in the way the bank’s key fund operates. Its current $8.9 billion three-year funding cycle ends this year. Last October, African countries had been pushing for a $25 billion replenishment.
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The US has backed the African Development Fund since 1976 and is the AfDB’s second-largest shareholder. Other leading donors have also been cutting back on their contributions but none of the reductions have been anywhere near as drastic as those put forward by the US. The changes will be a challenge for the incoming AfDB president after leadership elections later this month when current president Akinwumi Adesina steps down at the end of his second term.
Yinka’s view
The Trump 2.0 White House has been nothing if not transparent in foreshadowing its plans to slash away at nearly all forms of foreign aid spending and reshaping (dismantling?) the eight-decade long Bretton Woods world order.
But many will still find it jarring to parse through some of the details of those plans as they start to come to fruition. Under the latest budget proposals, the African Development Fund, which backs some of the continent’s low income and fragile economies, will take a notable hit. The Washington-based US-African Development Fund, which has long been viewed with suspicion by Republicans, is being shuttered; and the $1.6 billion in funding for UN and other peacekeeping missions is deemed “wasteful” and will be cut as well.
However it’s worth noting the US has said the budget will include $3.2 billion over three years for the World Bank’s International Development Association, “where other donors and institutions should take on more of the burden sharing.” Under the circumstances some have considered this something of a win, even though it’s lower than former US President Joe Biden’s previous $4 billion proposal.
The Trump White House is also proposing an increase in backing for the US International Development Finance Corporation, which was founded in Trump’s first term. It will have a new $3 billion fund. Again, there are few surprises here: These proposals are said to fulfill US President Donald Trump’s promise to “no longer dole out foreign aid dollars with no return on investment for the American people.”