Way forward as EU, US shake up their aid policies

The EU’s decision comes hot on the heels of the Trump administration’s plans to shut down the US Agency for International Development (USAID).

Meanwhile, the European Commission is also grappling with the challenges of rising defence spending due to the war in Ukraine and radical new US policies.

The EU will thus review the provision of foreign aid and make it more “targeted for partners,” Bloomberg reported, quoting a draft document.

The EU seeks to restructure its foreign aid to meet its strategic interests, including strengthening alliances with like-minded countries, securing access to raw materials, and curbing the influx of migrants, according to the media.

The EU’s overall budget, which traditionally amounts to about 1 percent of the bloc’s GDP, is overstretched given the wide range of demands, from the green transition to defence.

In the coming weeks, the European Commission will outline ideas for improving its next seven-year budget from 2028 to 2034, Bloomberg said.

US President Donald Trump has targeted USAID from his first days in office. His administration has ordered a three-month freeze on nearly all international development funding and reportedly plans to lay off most of the agency’s global workforce.

The White House has repeatedly accused USAID of widespread waste and fraud, even though foreign aid comprises only one percent of the federal budget.

The administration earlier this week placed the agency under the control of the State Department. Crews were seen on February 7 removing the USAID signage from the front of the agency’s headquarters in Washington.

Since the start of Russia’s full-scale invasion in February 2022, USAID has provided Ukraine with $2.6 billion in humanitarian aid, $5 billion in development assistance, and more than $30 billion in direct budget support.

The agency’s programmes help to rebuild schools after Russian attacks, pay for bomb shelters, repair critical energy infrastructure and fund civil society initiatives.

Alternatives for Tanzanian CSOs

Tanzanian experts and civil society stakeholders have suggested a raft of measures civil society organisations (CSOs) could apply to survive and sustain their operations.

HakiElimu executive director John Kalage told The Citizen that Tanzanian companies should consider supporting and investing in CSOs to ensure their sustainability.

The government should allocate a developmental budget for CSOs to ensure their continued existence, he said.

“It is also high time and a wake-up call for the government to seek internal funding to support its development projects rather than relying on grants, soft loans and external funding,” Dr Kalage said.

“Foreign institutions that have not changed their stance on withdrawals should also consider providing us with physical funds instead, so that we can invest in sustainable projects and achieve long-term sustainability,”

Venture capital expert Salim Awadh said, “I have said many times that, if CSOs won’t change their financing model, they are doomed to extinction, one after the other. As I have said many times, 96 percent of CSOs in Tanzania, are not financially sustainable.”

He proposed a number of ways CSOs can sustain their financing and continue with their activities.

Mr Awadh said they need to change the whole operating model, from grant merchants, to social enterprises and that having commercial arms is not an option anymore.

He advised CSOs to reform and restructure instead of serving as their founders’ stepping stones to wealth.

Mr Awadh added that if a CSO still have some grants, it has to find an innovative way to leverage on that to transition into a social enterprise.

“A huge wave is coming in and it is advisable to get off the shore,” he said.

Mr Awadh also asked CSOs to change their mindsets and appreciate today’s reality and plan for an unpredictable future.

“We still need CSOs – the ethical and serious that are doing a great job as far as areas such as human rights, environmental sustainability, and empowering various groups are concerned. They should remember that one cannot can’t save others if they themselves are drowning.”