On January 20th, the US administration issued an executive order pausing foreign development assistance. Subsequent guidance halted nearly all aid. Exemptions for life-saving programmes and emergency food aid have not yet restarted those critical activities.
This is an earthquake which is sending shock waves around the world. The United Nations estimates that 300 million people are in need of humanitarian assistance in Sudan, Syria, Gaza and beyond. The US is by far the largest bilateral donor, providing one-third of global aid and more humanitarian funding than the next five largest donors combined.
Irish NGOs which are recipients of USAid find themselves in the crosshairs; many of their local partners won’t be able to survive the 90-day pause without cash flow, unable to keep themselves going until they find alternative funding. Critical work on human rights, democracy and gender equality may be irreparably damaged – particularly if these programmes are cut permanently.
But the US decision marks a broader trend of rich countries retreating from developing countries. The EU, Germany and France cut aid by a total of €9 billion in 2024. Last month, Belgium cut 25 per cent of its aid budget.
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Ireland is an exception having protected aid spending and ensured that support for Ukraine is additional to spending in Africa. Recent polling by Dochas shows 67 per cent of Irish citizens are concerned about poverty in developing countries, 73 per cent agree that it is important for the Irish Government to provide aid, and 75 per cent believe it makes a difference.
But the broader trend has sparked soul searching about the way in which development aid is managed and delivered, and the long-term vision for international co-operation.
Supporting vulnerable populations affected by conflict and preventable disease is critical. But in some donor countries it has created a zero-sum dynamic between aid for people overseas and investing at home.
This kind of thinking masks opportunities for a different, more partnership-based approach that mutually benefits both sides, as opposed to more traditional colonial-style models of aid. The Marshall Plan, arguably the most successful aid programme in history, funded the reconstruction of Europe after the second World War and supported the creation of the world’s largest trading bloc; a boon for US commerce and global influence, all while promoting peace and prosperity in Europe.
The opportunity is not lost on China, or an increasing number of “middle powers” such as India, UAE, Saudi Arabia and Turkey – all of which are stepping up their engagement in Africa in an effort to bolster their global influence.
Outdated perceptions of the African continent driven by media reporting of conflicts belie a diverse region with a booming youth population that boasts the highest percentage of entrepreneurs of any continent. By 2050, one-in-four people on the planet will be African, creating a large market opportunity for investors. McKinsey estimates the region has $3 trillion in consumer spending potential. Fin-tech innovation, renewable energy solutions and a cultural renaissance are the norm not the exception. Artists such as Burnaboy regularly sell out stadiums and African companies are going global with listings on the New York Stock Exchange.
As we face an urgent need to transition our energy system, Africa has 70 per cent of the world’s solar potential, 60 per cent of wind energy potential and huge reserves of critical minerals essential for battery and EV production. Kenya secured 94 per cent of its electricity from renewables in 2023.
Thinking about Africa, not as an aid programme, but as a future engine of prosperity and an innovation hub presents an important opportunity for Ireland to invest for the future, diversify away from an over-reliance on US multinationals, and increase its soft power as other western nations step back.
Ireland should maintain the critical Irish Aid programme, increase commitments to high impact instruments like the World Bank’s low income country fund and Gavi, the vaccine alliance. It should lead new alliances to fight for these programmes in negotiations over the EU’s budget.
But the State should also reimagine foreign assistance. Using part of the Apple windfall it could create a “people and planet fund” to invest strategically in transitioning the global energy system, building resilience to climate change and fighting poverty. It could identify innovations developed by Irish firms and support their deployment in emerging markets, create jobs and support sustainable growth in those countries. In turn, innovations from these countries could be brought back to Ireland.
Profits from these investments would subsidise future investments and generate returns for the Irish taxpayer. A fund like this would not only be a business venture, but would support Ireland’s foreign policy and international development objectives, building strong allies and business partners in new regions.
It would not be traditional aid but concessional elements of the fund could be accounted as official development assistance supporting Ireland in reaching the UN’s target for spending 0.7 per cent of gross national income.
At a time when the aid sector is in crisis and searching for a new model, this approach would place Ireland at the forefront of a new kind of international co-operation that serves Ireland’s interest and values at home and builds prosperity and influence abroad.
David McNair is executive director at The ONE Campaign, member of the European Council on Foreign Relations, and author of Why Europe Needs Africa published by the Carnegie Endowment for International Peace
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