US foreign aid halt to have major hit on poorest countries: report

A suspension of US foreign aid and possible dismantling of the US Agency for International Development (USAID) will have a major impact on some of the world's poorest countries, the Washington-based Center for Global Development (CGD) warned Tuesday.

For more than 20 economies, a year-long pause on US aid could mean a loss of over one percent of their gross national income, the CGD said in a blog post.

A person leaves flowers, next to a USAID sign which is covered over, at the agency's headquarters in Washington, U.S., February 7, 2025.Reuters

And eight economies including South Sudan, Somalia and Afghanistan could face a hit of three percent or more, the group added.

The impact is especially severe for those eight economies as more than a fifth of their foreign assistance comes from USAID.

The value comes up to 35 percent for Afghanistan, 36 percent for South Sudan and 40 percent for Somalia, the post added.

USAID 'too large to be fully replaced'

While "US support is too large to be fully replaced," the CGD noted that other providers' official development assistance could be refocused and this could alleviate some of the worst effects.

Sajad, 7, who has been displaced by flooding, holds his toy jeep outside his family tent with the weather sheet donated by USAID, while taking refuge on an embankment near Kari Mori, some 32 km (20 miles) from Dadu, Pakistan October 5, 2010.Reuters

The poorest countries are among the main beneficiaries of aid from the International Development Association under the World Bank, which provides loans and grants to low-income countries.

Other countries such as Germany, Canada, Japan and Sweden could also step up, the CGD added.

"While there's still time to change course and mitigate some of the worst effects, countries around the world would be wise to act now in response to a less globally engaged United States," said the CGD blog post's authors Ian Mitchell and Sam Hughes.

US President Donald Trump has ordered a 90-day review of USAID, which runs health and emergency programs in around 120 countries, including the world's poorest.

Less than a week after Trump returned to the White House, USAID told non-governmental groups they would have to cease operations immediately because the new administration had frozen its budgets.