Credit: Andrew Caballero-Reynolds/IMF Photo
By Chie Aoyagi, Maurizio Leonardi, Athene Laws and Hamza Mighri
WASHINGTON DC, Jun 26 2026 (IPS)
For decades, official development assistance has been a central pillar of financing in sub-Saharan Africa. That pillar is now weakening—quickly and broadly.
In 2025, bilateral aid to the region fell sharply, with early estimates pointing to cuts of about 26 percent in a single year. Multilateral support is also under pressure, with major institutions projecting sizeable budget reductions. More cuts may follow as donors reset priorities in a shifting geopolitical environment.
As we explain in chapter 2 of the IMF’s recent Regional Economic Outlook for Sub-Saharan Africa, this is not a routine fluctuation. It is hitting countries that have limited room to adjust and few alternative sources of financing.
Why aid matters
Sub-Saharan Africa had the highest aid dependency globally in 2024. On average, aid accounted for 3 percent of GDP at the regional level. But that average hid sharp differences. In low-income countries and fragile states, aid often reached the equivalent of 6 percent of GDP or more, and in some cases far higher.
Over half of that aid was used to finance essential services such as health, education, and humanitarian assistance. And because development partners and non-governmental organizations (NGOs) often deliver services directly to people in need, aid cuts can also curtail the very systems that people rely on. Effective responses to crises such as the Ebola emergency in the Democratic Republic of the Congo and Uganda, the high and rising needs of people forcibly displaced by conflict, and the ongoing drought in the Horn of Africa rely heavily on the health and humanitarian infrastructure that aid has consistently helped to build.
A different reality
Aid flows have always fluctuated. But this episode stands apart.
The recent cuts are large and broadly simultaneous across countries. They are driven by donor decisions rather than changes in recipient economies. And they come at a time when traditional buffers are weaker: multilateral institutions and NGOs, which have often cushioned past declines, are themselves facing funding constraints. While non-traditional donors, such as China and the Gulf States, have grown their aid presence in the region, the magnitudes are not able to cover the reduction in traditional donors.
The cuts are also difficult to manage because they follow six years of successive shocks—including the pandemic, tighter global financial conditions, and food and energy crises—that have already eroded fiscal space.
Tough trade-offs
Governments now face difficult choices. Many have limited fiscal space, rising debt, and low reserves.
IMF-administered surveys covering 28 African countries suggest four broad policy responses:
Each option comes with trade-offs. Replacing lost aid can protect services and growth, but at the cost of wider deficits and external imbalances. Not replacing it stabilizes budgets and protects debt sustainability, but risks lasting damage to human capital and development.
There are no easy choices.
How to respond
The policy challenge is to manage the adjustment while preserving core development gains. Three priorities stand out.
First, protect and target high-impact aid.
With resources scarce, allocation matters more. Aid should be directed toward the countries and sectors where it has the greatest effect—especially low-income countries and fragile states, and essential humanitarian needs. Stronger coordination can reduce fragmentation and avoid duplication.
Second, broaden the financing toolkit.
Grant financing will remain essential, particularly in humanitarian contexts. But other instruments can play a larger role. Blended finance—using public funds to mobilize private investment—can help expand financing for infrastructure, energy, and agriculture. It is not a substitute for aid: it is harder to scale, more complex, and can add to debt if poorly designed. Managing these trade-offs will be critical.
Third, strengthen domestic capacity.
With aid less predictable, resilience increasingly depends on domestic institutions. This means mobilizing more revenue, improving spending efficiency, and strengthening policy design and service delivery. Aid has often provided both funding and implementation; replacing that capacity will take time and sustained investment.
A turning point
The shift that began in 2025 is unlikely to be temporary. It reflects a broader reconfiguration of development finance, shaped by tighter donor budgets and changing priorities.
The implications will vary by country, depending on exposure, initial buffers, and policy choices. But the direction is clear: reliance on external aid will become more uncertain, and domestic policy will matter more.
The immediate task is to manage the decline in aid without backsliding on the significant human development achievements of the past decades. The longer-term challenge is to adapt to a world where aid is less abundant and less predictable. How countries navigate both will shape growth and development outcomes for years to come.
Chie Aoyagi, Maurizio Leonardi, and Athene Laws are economists in the IMF’s African Department, where Hamza Mighri is a research analyst.
IPS UN Bureau
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By Appolinaire Djikeng
NAIROBI, Kenya, Jun 26 2026 (IPS)
Smallholder farmers in Africa and Asia are likely to still be reeling from the fuel and fertilizer crisis caused by conflict in the Middle East when what forecasters expect to be a “super” El Niño arrives later this year.
Appolinaire Djikeng
When climate extremes and conflict converge to cause crop harvests to fail, livestock will once again offer a resilient source of nutrition, organic fertilizer and incomes. But the confluence of shocks will nevertheless reverberate worldwide in everything from global food supply chains to increased migration and social tensions.Consensus is increasingly clear that tackling climate change to avert such crises is a legal duty under international law. Bringing down emissions requires both short-term and long-term action. And yet one of the most effective levers available — sustainable livestock farming — receives just 1 to 2 per cent of climate finance dedicated to agriculture. That is a vanishingly small share for a sector that, in many low- and middle-income countries, accounts for as much as 80 per cent of agricultural GDP.
This funding gap matters because livestock offer something relatively rare in climate policy: the chance to cut emissions fast while also building resilience. Methane is a more potent greenhouse gas than carbon dioxide over the short term, which means reducing it delivers quicker climate benefits.
Cattle and other livestock are among the primary sources of methane emissions. But crucially, both direct and indirect methane emissions from livestock production are often higher than necessary because of the same factors that hold back productivity. Poor animal health, low quality feed and nutrition, and climate stress all undermine production and increase both direct emissions and emission intensity. Tackling these fundamental factors solves both challenges.
In Ethiopia, for example, poor animal health has been found to increase livestock emissions by 50 per cent while also resulting in lower meat, milk and egg yields. Parasites and other vector-borne diseases increase the methane produced in animals’ guts while stunting growth and development.
Simply by applying existing tools to improve animal health, such as vaccines, drugs that kill parasites and good nutrition, research suggests that emissions could be conservatively reduced by at least 15 per cent per unit of output. The same interventions also increase productivity and improve livelihoods.
New research is also uncovering new opportunities to reduce methane from livestock while also boosting productivity and resilience.
Scientists from CGIAR research centres and partners have analysed nearly 300 forage samples and found that varieties of African clover, cowpea and lablab could reduce methane emissions by up to 90 per cent. These plants contain compounds that alter the microbes in cows’ stomachs and block the process that generates methane.
Testing is now under way to identify varieties that could be grown as low-methane feed, which not only helps reduce emissions but also supports local seed systems.
Restoring rangelands adds another layer: it helps improve forage availability to support better animal nutrition, lower methane emissions and build stronger ecosystems. Last year, for example, participatory rangeland management (PRM) was strengthened across 340,000 hectares in Ethiopia and 50,000 hectares in Tanzania, improving rangeland health and supporting livestock production.
Many more solutions exist to improve livestock sustainability for short-term and long-term gains, including those developed by the Livestock and Climate Solutions Hub. But despite growing evidence of impact from livestock interventions, climate finance continues to flow elsewhere, away from the agricultural systems that hundreds of millions of people depend on most directly.
In a post-aid world, directing more climate finance towards sustainable livestock farming in low- and middle-income countries is an investment in global stability.
Investing in more sustainable livestock production has a ripple effect that improves food security, livelihoods, and economic growth and contributes to greater stability and resilience in the face of shocks like the “super” El Niño.
Climate vulnerability is costly. Building resilience through the primary sectors of low- and middle-income countries is an insurance against future crises.
Prof. Appolinaire Djikeng is Director General of the International Livestock Research Institute
IPS UN Bureau
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