Malawians must brace for more tough times following the United Sates of America’s (USA) decision to terminate contracts worth $230.4 million (nearly K400 billion) under the United States Agency for International Development (USAid).
Based on a termination note of March 3 2025; HIV and Aids, maternal health, education, governance, economic development and education have all had their funding erased as the USA retreats from being the world’s largest benefactor under President Donald Trump’s ‘America First’ foreign policy doctrine.
USAid—the hitherto biggest development agency on the planet that in 2023 alone disbursed more than $43.8 billion (K78 trillion) —was forking $350 million (K630 billion) to Malawi yearly, according to the US State Department.
That amount is equivalent to roughly 12 percent of Malawi’s current 2024/2025 National Budget and represents just over a third of the country’s annual export earnings—making the cancellations not just a social crisis, but an economic one as well given the foreign currency losses for a nation with one of the highest current account deficits.
From the termination note, health is the most affected as just one area of HIV and Aids in Malawi has lost $163 521 653 (about K283.5 billion).
Projects affected under this programme include Empower, which aims to prevent new HIV infections among targeted populations; Protect, whose goal is to prevent new HIV infections among key populations and Core, which was working to cut new HIV infections as well as HIV morbidity and mortality rates.
Prevention (Kuteteza) aimed at granting men access to comprehensive, safe, high-quality and cost-effective voluntary male medical circumcision and condom is another casualty just as Ana ndi Achinyamata Patsogolo (Children and Youth First) is.
The Momentum project under components one and two, which aims to help efforts to reduce maternal, newborn and child morbidity and mortality through improved access and quality of health service delivery has also been affected.
The two Momentum components and another project aimed at improving nutrition outcomes and well-being of adolescents, pregnant women, and children have lost a combined $27 096 980 (around K48 billion).
Under Human Resource for Health, a component whose aim was to leverage local capacity to strengthen health service delivery, and a new award with Lilongwe University of Agriculture and Natural Resources (Luanar), have lost a combined $756 528 (about K1.3 billion).
Education
On the education front, Trump has also snatched away $2.82 million (about K5 billion) for the Tisamale Mabuku Activity meant to improve the capacity of school communities to ensure that teaching and learning materials are available, managed and used appropriately.
The Transforming Higher Education Systems Activity has also lost $1 057 846 (K1.8 billion).
The Economic Growth Policy project aimed at strengthening evidence-based, country-led, inclusive and consultative policy formulation and implementation that unlocks and advances agriculture and natural resource-led, climate-resilient, and inclusive commercialisation and industrialisation has also lost $2.64 million (K4.6 billion).
Governance and elections
The September 2025 General Election will not get $1 531 114 (K2.7 billion) through a Strengthening Electoral Integrity Project.
Two governance projects—one for Parliament of Malawi to better fulfil its legislative, oversight and representative functions, and another to address governance related bottlenecks to ensure effective service delivery—have lost a combined $13.5 million (K24 billion).
Which way now?
A development economist with expertise in analysing foreign aid said in an interview yesterday that the withdrawal of aid through USAid was only a tip of the iceberg.
The economist, who asked not to be named, but has worked in civil society, international development institutions and the Malawi Government as a top economic advisor, said Malawi should expect reduction of aid through all United Nations (UN) agencies where the USA has also cut funding.
Indeed, the USA is a so called fundamental funder for key international agencies such as those under the UN.
“Aid is a product of progress that those countries do, and the business environment is messed up, so countries like the United Kingdom [UK] and even the European Union will reduce aid because their fiscal space has reduced due to bottlenecks that the USA has put,” he said.
Early this month, the UK announced that it would cut its foreign aid to 0.3 percent of gross national product from 0.5 percent to free up money for defence spending amid growing threats from Russia and collapsing security guarantees from the USA.
Across Europe, France and Germany have in recent years, also progressively scaled back foreign assistance.
“Malawi needs to develop very strong relations with China, India and Russia, convince them to give us aid. For countries like India, they may attach that to business and we have to go for it. Let us look to the East,” said the foreign aid analyst.
National Planning Commission director general Thomas Chataghalala Munthali said they have commissioned a study into what the withdrawal of USA aid will mean for Malawi.
For health, economist Gowokani Chijrere-Chirwa said Malawi has to look into other financing models.
“For example, the housing and construction sector all are not taxed. Not only that, the lack of digitisation in business makes Malawi fail to collect required revenue since we are not sure who is making how much money.
“In other countries, they have a compulsory health surcharge for people coming in the country from other countries and it does not matter whether you will go to public or private facility, can we also try that?” suggested Chijere-Chirwa.
Meanwhile, Health Minister Khumbidze Kandodo Chiponda, who did not respond to our queries yesterday, said during the Boma Likutinji media briefing that Malawi still has HIV and Aids, Malaria and TB commodities until 2026 from the Global Fund.
Earlier, Ministry of Finance spokesperson Williams Banda said only K9.2 billion of USAid funding appears in the 2024/25 National Budget.
US President Donald Trump in January issued an executive order for a 90-day halt in foreign assistance pending a review of efficiencies and consistency with his foreign policy.
