The Impact of the USAID Funding Freeze: A Deep Dive into the Humanitarian Crisis

The US government's 90-day suspension of humanitarian and development aid has sent shockwaves through the international aid community. The unprecedented pause, which began on January 20, 2025, has affected crucial programs, deprived millions of individuals of essential services, and left a gap in global humanitarian efforts. Bond, a network of NGOs in the UK, has been consulting with its members to assess the short- and long-term implications of the action. This is a complete and thorough revision of all that we have studied and understood until now.

The Broad Range of the USAID Funding Freeze

USAID, or the United States Agency for International Development, proudly stands as one of the most significant and substantial providers of humanitarian aid and development assistance around the world. In the year 2023, the United States provided an unprecedented sum of $72 billion, which amounts to approximately £55 billion, to international aid initiatives. Such a massive fiscal input renders US aid a core foundation of efforts aimed at stimulating worldwide development as well as improving the lives of those in need around the world. By comparison, the United Kingdom provided a sum of £15.3 billion to international aid, while joint efforts of the European Union saw a phenomenal Official Development Assistance (ODA) value reaching EUR 95.9 billion, which is approximately £79 billion.

The freeze has had direct operational implications.

• Approximately 14,000 USAID employees have been placed on unpaid leave of absence.

• It was decided to impose a freeze on the initiation of new programs.

• Existing programs have been closed down under stop-work orders, halting important work.

Geographic Reach: Where Are Programs Most Affected?

USAID programs are centered in Sub-Saharan Africa, where they fund healthcare, education, food security, and economic development. Nevertheless, severe effects are being felt in the Latin America, Asia, and Pacific regions as well. These areas are dependent on US funding for basic services, and the freeze has exposed millions to risk.

Humanitarian Toll: A Crisis Unraveling.

The funding freeze has also had catastrophic implications for marginalized communities of women and girls. The most critical immediate impacts are the following:

1. Women's Health Services: 912,730 women each week are being denied access to contraception by the freeze.

 An estimated 3.8 million women have lost contraceptive care access from January 20 to February 18, 2025.

Almost 2 million girls and women lost access to contraceptive services in the initial two weeks of the freeze.

The halt on family planning services risks not just the health of women but also rolls back decades of advancement in gender equality and reproductive rights.

2. Interruption of Life-Saving Programs.

HIV vaccine trials in South Africa have been suspended, pushing back possible breakthroughs in the battle against HIV/AIDS.

Food and shelter programs in refugee camps have been cut or terminated altogether, subjecting displaced persons to the lack of essential needs.

The US exit has caused a power vacuum that has resulted in greater Chinese power in destabilized areas.

Which Programs Have the Highest Possibility of Facing Challenges and Complications?

While it is conceivable that some programs may be resumed after the comprehensive review process that occurs after 90 days, programs that fail to align or correspond with the new government's set priorities and goals are at a much higher risk of being terminated on a permanent basis. Especially programs that focus and prioritize significant concerns such as gender equality, family planning, and diversity, equity, and inclusion (commonly referred to as DEI) initiatives are in a situation of increased susceptibility and uncertainty about their future feasibility.

In order to see a more comprehensive and updated list of affected programs, one can utilize Devex's tracking tool, which offers real-time updates and insightful data regarding the status of projects that are funded by USAID.

Waivers: An Essential Lifeline for Some Programs That Rely on Them.

The waiver process, while it is important to note that it does not occur automatically, has still afforded some respite for essential programs that are instrumental to their operations. Humentum, a very reputable international organization dedicated to supporting humanitarian operations across the globe, has painstakingly outlined the following criteria that must be met to obtain a waiver:

1. This includes emergency food assistance and the different administrative expenses associated with the efficient distribution of this aid.

2. Remuneration packages, including wages, and travel-related expenses incurred by certain personal service contractors, other than those who are implementing partners.

3. Expenses that are considered legitimate and incurred before the January 24, 2025 date, or expenses that directly result from stop-work orders.

4. Exceptions officially approved by the Director of Foreign Assistance.

Furthermore, on January 28, 2025, Secretary of State Marco Rubio took the daring step of signing a memo where he declared certain exemptions.

The Broader Implications of the Freeze

The USAID freeze has broader consequences beyond the immediate halt of programs:

1. Loss of Credibility: The pause has undermined credibility in the US as a reliable partner for development worldwide.

2. Geopolitical Shifts: The vacuum left by the US has provided an opportunity for other nations, particularly China, to expand their influence in affected regions.

3. Long-Term Development Setbacks: The withholding of funds could reverse decades of progress in poverty reduction, health, and education.

What's Next?

As the 90-day review continues, the global aid community holds its breath. Advocacy is underway to get key programs reinstated and the impact of the freeze mitigated. Organizations like Bond and Devex are providing regular updates and analysis to try to keep stakeholders informed.

The USAID ban has exposed the weakness of humanitarian systems worldwide and how critical US funding is to supporting vulnerable people worldwide. While waivers and exemptions have provided some temporary relief, the longer-term ramifications of this step are uncertain.

As the crisis continues, the international community must come together to address the immediate crisis and demand the reinstatement of lifesaving programs. The stakes are high, and the issue requires a sense of urgency.