Impact of USAID Cuts: Global Ripple Effect

The U.S. decision to freeze USAID funding sends shockwaves through aid-dependent countries, potentially hindering their ability to attract private investment. The cuts threaten emerging economies' financial stability, affecting small businesses, healthcare, and infrastructure projects across various nations, with countries scrambling to find alternative funding sources.

The unexpected freeze in U.S. aid via USAID has sent ripples through countries heavily reliant on these funds. This decision could significantly impede emerging economies from attracting private investments, according to several investors.

USAID's substantial contributions, totaling $44 billion in fiscal 2023, have played a crucial role in enhancing the creditworthiness of nations from Sri Lanka to South Africa. The loss of this financial pillar could see these countries face steeper costs when borrowing in international markets.

Notably, the aid facilitated growth in underfunded sectors like agriculture and healthcare. Without it, startup ventures like Africa-focused Oko face existential threats, with CEO Simon Schwall warning of closure risks without finding new financial partners.

(With inputs from agencies.)