The United States Agency for International Development (USAID) has extended its generous support worldwide for over 60 years. When the U.S. Government launched its first foreign aid program, Point Four, in 1950, the objective was to help underdeveloped countries improve their social, economic, and political conditions. The initiative particularly focused on sharing the U.S. agricultural productivity growth model to enable underdeveloped countries to achieve food self-sufficiency. Point Four partnered with U.S. universities to establish Alemaya and Jimma agricultural colleges in Ethiopia, laying the foundation for the creation of USAID in 1961. USAID was established with a broader mandate to promote bilateral interests and assist countries in disaster relief, poverty reduction, and socio-economic development.
USAID has remained the largest donor in many countries, including Ethiopia. While promoting U.S. Government interests, the agency has allocated significant resources to save lives, reduce disaster risks, enhance livelihoods, support businesses, and strengthen social services such as education and health. USAID has provided billions of dollars to aid drought-prone populations, malnourished children, and food-insecure citizens. As recurrent droughts and declining resilience among vulnerable communities persist, USAID has delivered life-saving and nutritious food. The agency has extended food, nutrition, and non-food support to refugees, internally displaced persons, and individuals affected by HIV/AIDS.
To enhance resilience, USAID has invested in natural resource management, livelihood options, agriculture, food systems, and businesses. These investments have improved household incomes and created job opportunities for youth. USAID has also played a leading role in the education and health sectors. Millions of students have accessed quality education due to investments in educational materials, and numerous higher education institutions have benefited from capacity-building support and research partnerships. USAID’s assistance has facilitated collaborations between Ethiopian and US universities, significantly enhancing the capacity of Ethiopian institutions. The agency’s support through the President’s Emergency Plan for AIDS Relief (PEPFAR) has contributed to a decline in HIV/AIDS-related deaths since 2004. Additionally, USAID has made substantial investments to combat malaria and strengthen Ethiopia’s health system.
Since 2010, Ethiopia has been one of the few countries included in the US Government’s Global Food Security Initiative, known as Feed the Future (FTF). FTF aims to eradicate poverty by improving agricultural productivity, strengthening community resilience, and enhancing nutrition for women and children. The program has enabled Ethiopian smallholders to adopt advanced agricultural technologies, including improved inputs, pest management, farm mechanization, post-harvest handling, and market linkages. As a result, Ethiopian farmers and pastoralists have increased their productivity, resilience, nutritional outcomes, and income.
Ethiopia is the second largest USAID funding recipient globally, with over USD one billion annual assistance, representing approximately 13 percent of the Ethiopian government’s annual budget. Some people argue that foreign aids go back to donors’ countries as expats salary and other overheads. If we assume that USAID projects implementers consume up to 40 percent of funds as overhead, the remaining amount still represents significant amount to reach millions of beneficiaries. These funds support capacity-building, food distribution, seed and breed provision, vaccine supply, financial assistance, and infrastructure development, including food processing facilities, water and sanitation systems, irrigation, and health services. Additionally, USAID’s financial support provides a crucial foreign currency injection into Ethiopia’s fragile exchange regime, creates jobs for hundreds of thousands, and stimulates local economies.
In recent years, over 20 million Ethiopians have relied on emergency food assistance annually, in addition to the 8 million permanent recipients of food or cash aid through the Productive Safety Net Program (PSNP). USAID has played a pivotal role in meeting emergency needs by supplying wheat, sorghum, split peas, plumpy’nut, corn-soy blend, and cooking oil. Of the eight million PSNP beneficiaries, nearly one million (12 percent) receive direct food assistance from USAID. In 2022, USAID temporarily suspended food aid to Ethiopia due to reports of large-scale food diversion. An investigation found that various actors, including government officials, were involved in the scheme. After several months of suspension, USAID resumed food distribution following government commitments to improve targeting and distribution mechanisms. The pause exposed the critical role of USAID’s assistance and the challenges that arise in its absence.
USAID’s impact on Ethiopia is significant. Many dairy and meat processing companies have received support to meet industry standards, enabling them to compete in domestic and international markets. Ethiopian farmers have benefited from USAID’s assistance in producing and marketing high-value commodities such as avocado, sesame, coffee, and poultry. Drought-prone pastoralists now have improved rangeland and livestock management systems. USAID has also strengthened ties between financial institutions and private businesses by providing loan guarantees and other financial support mechanisms. Furthermore, the agency has enhanced access to water and sanitation, pioneered GPS-based rural land mapping and registration systems, and encouraged both government and development partners to adopt similar initiatives. As a result, more than half of Ethiopia’s rural landholders now possess landholding certificates.
Without USAID’s substantial funding, the consequences for Ethiopia’s people, economy, and development efforts would be dire. While some argue that foreign aid is not a sustainable solution to poverty and food insecurity, it serves as a critical short- and medium-term intervention to bridge governmental gaps. USAID has never intended to provide assistance indefinitely; rather, its strategic approach has been to support self-reliance. For instance, USAID has pushed for at least 80 percent of PSNP beneficiaries to graduate from the program and achieve self-sufficiency. However, the Ethiopian government has been hesitant to implement this transition after two decades of PSNP operations.
Despite government institutions receiving budget allocations for sectoral responsibilities, they often lack the capacity to deliver comprehensive services. Many ministries and regional bureaus depend on donor-funded projects to cover operational expenses such as travel, training, equipment, and technical services. Although not a sustainable approach, donor funding helps fill financial gaps and supports the hiring of skilled professionals. USAID projects have seconded numerous high-level experts to key institutions, providing leadership, technical expertise, and advisory support. Without these secondments, government institutions will face operational difficulties. Recently, the Ministry of Health warned that over 5,000 staff positions could be terminated if US government funding ceases.
Following President Trump’s executive order to reevaluate foreign aid priorities, USAID’s future support remains uncertain. A complete withdrawal would severely impact developing countries like Ethiopia, leaving vital investments unfinished and vulnerable populations at risk. The Ethiopian government may need to reassess its spending priorities and prepare for potential funding shortfalls. This situation serves as a critical lesson in anticipating uncertainties and planning accordingly.
As a close observer of USAID’s work, the author of this article acknowledges the agency’s commitment to accountability, transparency, and rigorous financial oversight. Despite recent misinformation, USAID maintains stringent procedures for fund management, ensuring that programming and financial obligations are thoroughly scrutinized. The agency conducts due diligence to assess financial and programmatic capacities before allocating funds. As a result, many local institutions struggle to qualify for grant management. Furthermore, due to concerns over human rights violations, USAID has paused direct economic assistance to the Ethiopian government, which has yet to meet the financial management standards required for direct budgetary support.
International organizations, including the United Nations systems, are expressing concerns and analyzing the gaps and alternative options. Some institutions have even gone further, appealing to the US government to reconsider its decision. Despite the US government’s actions to dismantle USAID, there has been no visible reaction from the Government of Ethiopia. This absence of response raises the question of whether Ethiopian officials are unaware of the level of assistance provided or the actions being taken.
Interestingly, Government of Ethiopia’s recent report of very high increase of crop production in 2024 can be seen as supporting evidence to decrease donors support to improve the food security situation of the country. The report remains controversial because the size of farm land added in the 2024 cropping season turns to be over three million hectare and doubles irrigated land in a year difference. No country in the world has been able to achieve to this extent in recent years. Such misleading agricultural reports do not help to improve food security than contributing to the planned GDP growth nominally. The Author plans to write a separate article on agricultural production data management, but aims at showing this could couple with stoppage of aid without a phase out strategy and mechanisms in place.
Contributed by Orkaydo Gambora
