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Money from development financing is used to secure vital sectors such as food and health. This article is part of a focus section on development finance accompanied by a series of AI-generated images.
The US development agency USAID distributed over $ 30 billion in 2024. Billions that, for the time being, will not flow in 2025 – not into health, food or education worldwide.
What this means in practice can be seen, for example, in the Kenyan capital Nairobi, from where I am writing these lines. Condoms that were previously distributed free of charge through a USAID programme are now being sold for the equivalent of around 30 cents each. Around a quarter of the people here still live on less than two dollars a day. Among them are many people infected with HIV. Like almost everywhere in Africa, they face a particularly uncertain future. Immediately after the USAID stop, many no longer took their medication for a while. A social worker who works in a poor community in the metropolitan region told me that an Italian private organisation has now stepped in to help in his catchment area. The Kenyan government announced that its stocks of the required medication would only last for six months.
The situation is grave, and it would be naive to claim that it will get better soon. Deficits resulting from the cut in American development funds were not even factored into the OECD report “Global Outlook on Financing for Sustainable Development 2025” published in February. Nevertheless, the report predicts an annual financing gap of $ 6.4 trillion to reach the Sustainable Development Goals (SDGs) by 2030. The current deficit is already at $ 4 trillion.
Yet global development cooperation is not standing still. For example, the World Bank fund IDA, the most important funder of low-income countries, will be able to invest a record $ 100 billion in the next three years.
Actors who believe in multilateral cooperation and global public goods must keep going. The ability to do so will depend not only on governments, but also on the private sector, civil society and collaboration between them all.
One opportunity to work together is the Fourth International Conference on Financing for Development (FfD4), which will take place at the end of June in Seville. We must be realistic about what can be achieved, however: If the most powerful country in the world considers development cooperation a bad deal, the rest will likely have to focus on damage control rather than progress.
Giving up is not an option. These dire circumstances also create opportunities. Low and middle-income countries now have a chance to play a more active role in global finance reform. Now must also be the time to focus on the quality of finance in order to work more effectively and sustainably with fewer resources.
Development finance is about more than cash flows. Ultimately it is about survival – in the short term in countries suffering humanitarian crises, and in the long term in all places on a planet that must remain habitable.
Katharina Wilhelm Otieno is an editor at D+C and works half the year in Nairobi.
euz.editor@dandc.eu
