Historic Aid Cuts: How is Africa Reacting?

Otaviano Canuto, Hafez Ghanem and Karim El Aynaoui

No 2607, Policy briefs on Agriculture Markets, Policies and Food Security from Policy Center for the New South

Abstract: There was a historic decline in Official Development Assistance (ODA) in 2025. Foreign aid to developing countries from members of the OECD-DAC fell by some 23%, the largest decline on record and the second consecutive annual decline. Aid to Africa fell by more than 25%. The International Monetary Fund (IMF) described this decline in ODA to Africa as “a shock like no other.” It differs from previous shifts in foreign assistance because of its scope and depth, as well as the speed, simultaneity, and unexpected nature of the cuts. Moreover, these cuts are occurring at a time when other sources of finance for Africa—including multilateral institutions and NGOs—are facing their own financing problems. Chinese lending to Africa has also declined. New Chinese loan commitments fell from a peak of $29 billion in 2016 to just $2.1 billion in 2024, while debt-service payments on earlier loans have continued to rise. As a result, Africa now pays more to China in debt service than it receives in new disbursements. At the same time, African countries are burdened by large and increasingly unsustainable debts. About half of Africa’s 54 countries spend more than 10% of their budget revenue on interest payments.

Date: 2026-10
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