The U.S. Agency for International Development (USAID) has terminated contracts and grants in Kenya worth over KSh 108 billion, a sharp rise from KSh 32.5 billion in just two weeks. This move follows a comprehensive 90-day review of U.S. foreign aid programs initiated by the Trump administration.
Key Cancellations
- Trade Agreement with DAI Global: A major trade deal worth KSh 67.3 billion has been revoked.
- Education Program: An education initiative valued at KSh 8.4 billion has also been terminated.
- Total Cuts: In total, eight USAID contracts and grants have been canceled, amounting to KSh 108.34 billion.
The Foreign Aid Review
On January 20, 2025, President Donald Trump signed an Executive Order titled “Reevaluating and Realigning United States Foreign Aid,” which led to the suspension of all new foreign development assistance pending review. The administration’s goal was to ensure that these programs aligned with the “America First” agenda.
The review resulted in the decision to cut over 90% of USAID’s foreign aid contracts worldwide, amounting to nearly $60 billion. The move has sparked criticism from global humanitarian organizations, warning of dire consequences for health, education, and economic programs dependent on U.S. funding.
Impact on Kenya
The termination of these contracts is expected to have far-reaching consequences in Kenya:
- Employment: Approximately 40,000 direct and indirect jobs could be lost as organizations reliant on USAID funding face potential shutdowns.
- Healthcare: Critical health programs, including HIV/AIDS support, risk disruption, affecting thousands of vulnerable Kenyans.
- Economic Stability: The sudden withdrawal of funds could destabilize key development projects, leading to economic shocks.
Kenyan Government’s Response
In response to the funding cuts, the Kenyan government has announced plans to allocate KSh 24.9 billion to mitigate the impact of the USAID freeze. This emergency fund aims to sustain essential services and support affected sectors.
As Kenya navigates this funding crisis, concerns remain over the future of critical projects that relied heavily on U.S. support. The USAID cuts mark a turning point in Kenya-U.S. relations, raising questions about the long-term sustainability of foreign aid-dependent programs.
