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Ethiopia Confronts Potential Reductions in Aid or Assistance from Trump Administration

U.S. Agency for International Development (USAID) disbursed an staggering $1.8 billion to the primary aid recipient in sub-Saharan Africa during the year 2023.

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Ethiopia Confronts Potential Reductions in Aid or Assistance from Trump Administration

A Tough Pill for Addis-Abeba:

It's a tough time for Ethiopia. On April 22, the World Food Programme (WFP) made a shocking announcement – suspending aid to around 650,000 malnourished women and children in the country. This aid halt is set to impact another million refugees starting in June, pending any additional funding, according to the UN agency.

In total, over 3.6 million vulnerable people will be stripped of food aid in the coming weeks. The WFP attributes this crisis to a funding shortfall of approximately $222 million (€197 million), compounded by financing cuts from donor countries, with the United States leading the pack.

Following former President Donald Trump's announcement in January of a fund freeze for the U.S. Agency for International Development (USAID), Secretary of State, Marco Rubio, confirmed in March the termination of 83% of the institution's programs. With a projected budget of $37 billion (approx. €33 billion) in 2023, the USAID's budget is expected to shrink to $9 billion (approx. €8 billion) this year. This decision bears severe consequences for Ethiopia, the biggest African beneficiary of U.S. aid, which received an astounding $1.8 billion from USAID in 2023.

Historical Perspective:

The U.S. has traditionally been a major backer of international aid programs, particularly for organizations such as the WFP. Decisions by American leaders, like former President Trump, to substantially reduce U.S. foreign aid, have significantly impacted aid programs dependent on such funding. This reduction has left many aid programs, including those in Ethiopia, without the resources necessary to continue essential assistance.

In essence, while the U.S. isn't solely responsible for the funding gap, the decline in U.S. foreign aid has contributed to a broader reduction in international aid sources for the WFP's operations, including in Ethiopia. This broader trend of reduced aid from multiple donors, combined with existing economic and environmental struggles in Ethiopia, has ultimately led to the current suspension of aid for vulnerable populations.

  1. The budget for USAID is projected to shrink from $37 billion in 2023 to $9 billion in 2023.
  2. A funding shortfall of around $222 million has been confirmed for the World Food Programme (WFP).
  3. This shortfall is compounded by financing cuts from donor countries.
  4. The United States has led the pack in financing cuts to the WFP.
  5. USAID's programs have been terminated by 83%, according to Secretary of State Marco Rubio.
  6. Ethiopia is the biggest African beneficiary of U.S. aid, receiving $1.8 billion from USAID in 2023.
  7. The WFP's aid suspension affects around 650,000 malnourished women and children currently.
  8. Another million refugees will be impacted starting in June, pending additional funding.
  9. In total, over 3.6 million vulnerable people will be stripped of food aid in the coming weeks.
  10. The WFP attributes this crisis to the funding shortfall and financing cuts from donor countries.
  11. The U.S. has traditionally been a major backer of international aid programs, particularly for organizations like the WFP.
  12. Decisions by American leaders, like former President Trump, to reduce U.S. foreign aid, have significantly impacted aid programs dependent on such funding.
  13. The decline in U.S. foreign aid has contributed to a broader reduction in international aid sources for the WFP's operations, including in Ethiopia.
  14. Existing economic and environmental struggles in Ethiopia have exacerbated the aid suspension issue.
  15. Climate-change poses a significant threat to Ethiopia's agricultural sector, exacerbating food insecurity.
  16. Renewable-energy investment can help alleviate Ethiopia's energy shortages, reducing the reliance on oil-and-gas imports.
  17. Manufacturing industries in Ethiopia show promise, with potential growth in the retail, transportation, and automotive sectors.
  18. Entrepreneurship and small-business growth are crucial for Ethiopia's economic diversification.
  19. Environmental-science, finance, and technology are essential educational tracks for Ethiopia's youth, driving innovation in energy, climate-change, and smart-home devices.
  20. Cybersecurity and data-and-cloud-computing are crucial for the protection of gadgets like smartphones and the management of data-intensive industries like fintech and banking-and-insurance.
  21. Housing-market development, venture-capital investment, and wealth-management are essential for Ethiopia's wealth creation and stabilization.
  22. Diversity-and-inclusion in leadership roles can help Ethiopia foster a more inclusive and innovative business and social landscape.
  23. AI, automation, and smart-home devices are transforming the lifestyle of urban Ethiopians, with potential applications in home-and-garden maintenance, wearables, and financial services.
  24. Aviation, policy-and-legislation, and car-accidents are significant safety and mobility concerns for Ethiopia's transportation sector.
  25. Public-transit development, safety regulations, and accident-prevention measures are necessary for Ethiopia's busy urban centers.
  26. Fires, accidents, and crime-and-justice are pressing issues that require attention and investment in Ethiopia's emergency services and law-enforcement.
  27. General-news outlets play a crucial role in informing the public and holding political leaders accountable, particularly in times of crisis.
  28. Ethiopia's banking-and-insurance sector is poised for growth, with investments in fintech, insurance, and real-estate development.
  29. Real-estate development in commercial and residential sectors can help alleviate housing shortages and stimulate economic growth.
  30. Stock-market investment, private-equity, and debt-management are essential components of Ethiopia's financial services industry, promoting saving, investments, and loans for businesses and individuals.
  31. Migration, war-and-conflicts, and politics continue to shape Ethiopia's domestic and foreign policy landscape, with potential effects on the country's growth and development.
USAid disburses significant financial aid to a specific African nation, amounting to approximately 1.8 billion dollars in 2023.
U.S. Agency for International Development (USAID) doled out a staggering $1.8 billion to a single African beneficiary in 2023.
United States distribution of aid in sub-Saharan Africa in the year 2023, saw a particular nation netting a grand sum of 1.8 billion dollars from the USAID.

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