Nigeria: Assessing the Impact of the USAID Funding Freeze On Nigeria's Health Sector

The World Food Programme, a USAid partner, distributes food to people in South Sudan.
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Since the inauguration of the 47th U.S. President, Donald J. Trump, the news waves have been dominated by coverage of the various Executive Orders he has signed. Among these, one that has had a significant impact on the development committee is the Executive Order placing a pause on new foreign aid spending, as well as issuing a stop-work order for existing grants and contracts

Over the past week, conversations among implementing partners in Nigeria have focused on the Executive Order directing the United States Agency for International Development (USAID) to pause its work. Section 3 (a) of the order mandates a 90-day pause of U.S foreign development assistance in order to assess programmatic efficiencies and alignment with U.S foreign policy. The order's scope extends to existing grants and contracts.

Opinions have varied, with some expressing little surprise at this turn of events. However, the consequences of this pause on foreign aid are particularly concerning for Nigeria's already fragile health system. USAID supports critical programmes in Nigeria, including a WASH programme focused on water resource management, nutrition investments, and humanitarian and development programmes in Northeast Nigeria. In addition, the cut in funding has affected the U.S. President's Emergency Plan for AIDS Relief (PEPFAR), which provides vital HIV prevention, care, and treatment services. A decrease in development assistance could severely disrupt these vital initiatives, which are essential to addressing Nigeria's public health challenges.

U.S Foreign Policy Rationales and Objectives

USAID currently manages an annual budget of about $40 billion, with a significant portion allocated to supporting the health sector in low- and middle-income countries (LMICs). In 2018, Development Assistance for Health (DAH) was estimated at $38.9 billion, with the majority of funds directed through direct bilateral assistance. The United States contributed 34% of the total DAH, followed by the UK at 8.4%. U.S. foreign aid and development assistance to LMICs primarily focuses on advancing global health, promoting economic development, fostering democratic governance, and addressing humanitarian crises. These efforts are designed to align with U.S. strategic interests. In the health sector, U.S. foreign aid prioritises disease control, maternal and child health, family planning, nutrition, and epidemic response.

Over time, three key rationales have shaped U.S. foreign aid policy: National Security, Commercial Interests and Humanitarian Concerns. The U.S. Department of State further categorises foreign aid into five strategic objectives: peace and security, investing in people, governing justly and democratically, economic growth and humanitarian assistance.

Among these broad categories, Health, Education, and Social Assistance programmes are cross-cutting, have considerable overlap, and have interconnected impacts.

A cursory look at Nigeria's aid transition preparedness

Nigeria relies heavily on external funding to support critical health interventions. A reduction in these resources would have a significant impact on maternal and child health outcomes, epidemic and disease preparedness, immunisation efforts, and overall public health, potentially halting progress towards achieving universal health coverage (UHC). The uncertainty caused by the current freeze on USAID funding places the health sector in a precarious situation as stakeholders contend with how to navigate the coming months. The consensus among health advocates and thought leaders is clearer than ever. Nigeria must mobilise and invest heavily in its healthcare system.

However, the challenges are undeniable. These include decades of underspending, insufficient investment and competing priorities such as high rate of poverty, insecurity, failing infrastructure, and inadequate education, all of which demand immediate attention. A study examining Nigeria's ability to maintain progress towards UHC without donor assistance highlights key obstacles, including poor policy implementation, weak governance and accountability, and the absence of transition plans for immunisation and HIV programmes.

From a fiscal standpoint, Nigeria's rising debt profile means more resources are being allocated to servicing domestic and foreign debt, which impacts the allocation of funds available for essential public services, including health. These fiscal constraints and their broader implications can be further analysed by fiscal responsibility experts.

The Health sector and our current reality

The current strategic direction of Nigeria's health sector, governed through the Sector-wide approach (SWAp) addresses fragmentation and coordination bottlenecks, ensuring that DAH is delivered in a way that strengthens the health system while addressing immediate population health concerns. The National Health Sector Renewal Investment Initiative NHSRII, designed with significant support from multilateral, bilateral technical assistance and funding projection, has made progress.

In its first year of implementation, evidence-informed programming and accountability measures have become increasingly clear, reflecting the current administration's willingness and commitment to focus on and address systemic issues such as the deterioration of Primary Health Care, Health Financing, Manufacturing, Supply Chain, and Human Resources for Health.

However, this nascent shift in the health sector requires deeper engagement and sustained investment, not disruption. The threat of a possible pull-out by a notable funder like USAID adds uncertainty. Evaluation of donor transitions in middle-income countries leaves gaps and, in many cases, erodes the tangible progress made while funding was in place. The jury is still out. However, this highlights the need for developing countries to take ownership of funding and implementing health programmes, especially in the context of current global realities. Nonetheless, we must take responsibility for our health and overall development. But a hard stop will not achieve this.

The coming weeks will be tense for both local and international implementing partners in Nigeria. Expectations of the SWAp coordinating office have arisen, and we now await guidance from the Coordinating Minister of Health and Social Welfare and his team.

As we navigate these uncertain times, all relevant stakeholders must remain engaged and work together to ensure the continuity of critical health programmes while also integrating mechanisms for self-sustaining programmes, ensuring the health system remains resilient in meeting the health needs of Nigerians.

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