President Donald Trump’s decision to retire the US Agency for International Development (USAID) has sparked debate across policy circles. Yet, a close examination of USAID’s operational history—its ineffectiveness in achieving economic development, lack of transparency, and its entanglement with politically-connected contractors—reveals that the decision is not only justified but overdue. Coupled with the testimony of voices like former African Union Ambassador to the US, Dr. Arikana Chihombori-Quao—who has criticized USAID’s role in Africa—the case for phasing out the agency grows even stronger.
The most damning criticism of USAID lies in its track record. Despite decades of financial commitment and organizational reform, foreign aid delivered through USAID has consistently failed to yield measurable economic growth in recipient countries. The evidence is overwhelming: there is no correlation between foreign aid and long-term economic growth, and the agency has often fueled unsustainable debt rather than development.
Foreign aid often ends up supporting autocratic regimes and bloated state bureaucracies. Instead of fostering private sector growth and free-market reforms, it props up central planning and entrenched elites. In India, for example, USAID poured more than $2 billion between 1961 and 1989—primarily to the state sector—with little to show in terms of economic dynamism.
Even attempts to use aid as leverage for market-oriented reforms have failed. Countries often delay or avoid reforms because of the cushion aid provides. South Korea and Taiwan—cited by USAID as aid success stories—only saw true economic takeoff after the aid stopped flowing. Aid, in practice, removes the pressure to reform rather than reinforcing it.
USAID’s contracting practices have been marred by favoritism, inefficiency, and opacity. A large portion of its funds—up to 80 percent—are funneled back to US-based firms, many of which have long-term, politically-entangled relationships with the agency. These firms are often located in or around Washington, DC—forming a tight circle of contractors that rotate personnel with USAID itself. This “revolving door” dynamic breeds rent-seeking behavior and undermines genuine competition.
Contractors are paid US rates for services that could be delivered far more cost-effectively by local organizations in recipient countries. Worse still, these foreign contractors and consultants are often unfamiliar with local contexts, reducing the effectiveness of the interventions they are tasked with implementing.
Moreover, USAID’s operations lack accountability. The agency has routinely resisted transparency, refusing to disclose contract details and often using “proprietary information” as a shield against public scrutiny. Requests from journalists, lawmakers, and watchdogs have often been ignored, reinforcing perceptions of systemic unaccountability.
Contrary to its stated mission, USAID has arguably undermined the very societies it claims to help. By supporting central governments—often authoritarian—USAID inadvertently politicizes local economies and institutions. Nobel laureate, Angus Deaton, points out that large flows of foreign aid change local politics for the worse, undercut democratic institutions, and stifle the kind of civic engagement necessary for sustainable development.
Africa has been particularly affected by these dynamics. Despite receiving billions in aid over the decades, many African nations remain mired in poverty, debt, and underdevelopment. According to a bipartisan Clinton-era task force, much of Africa was economically worse off in the 1990s than it had been two decades earlier—despite the influx of aid.
Dr. Arikana Chihombori-Quao—former African Union Ambassador to the United States—has been one of the most articulate critics of USAID’s impact on Africa. She argues that the agency has little to show for its decades of involvement, and rather than enabling African development, it has routinely interfered in local politics. USAID’s approach, in her view, prioritizes control and influence over partnership and mutual growth.
Dr. Chihombori-Quao rightly emphasizes that Africa should not have to “beg” the United States for engagement. If the US is not interested in pursuing a relationship based on mutual respect, Africa has every right to deepen its partnerships with other global powers like China, especially if such relationships promote technology transfer, infrastructure development, and capacity-building without the paternalistic overtones often associated with Western aid.
Critics of Trump’s decision to retire USAID often suggest that the US needs to counter China’s rising influence in the developing world through more aid. This is misguided. China’s Belt and Road Initiative (BRI)—while massive in scope—is already facing backlash due to corruption scandals, labor abuses, and unsustainable debt traps. Trying to outdo China in a game of “checkbook diplomacy” will only deepen US entanglement in inefficient aid schemes without yielding geopolitical dividends.
Instead, the US should allow its relationships with Africa and other developing regions to evolve based on mutual economic interests, technology collaboration, and private sector-led investment. Countries like Ethiopia, Ghana, and Rwanda are increasingly looking toward entrepreneurship and innovation as drivers of growth—something aid has historically failed to stimulate.
Economic freedom—not aid—is the most reliable engine of prosperity. Countries that liberalize their economies, protect property rights, and ensure rule of law tend to see sustained growth, irrespective of aid levels. USAID, in contrast, has consistently rewarded bad governance and stifled these very freedoms.
Rather than pouring billions into foreign bureaucracies and politically-connected contractors, the US should promote policies that incentivize private investment, trade liberalization, and secure legal environments in partner countries. As history and research show, these are the true foundations of prosperity.
Retiring USAID is not a retreat from global engagement—it is a strategic reset. The agency has failed to deliver on its promises, perpetuated a culture of unaccountability, and in many cases, hindered the very development it claims to support. The criticisms from economists, policymakers, and African leaders like Dr. Chihombori-Quao all point to one clear conclusion: it is time for the US to chart a new course, one based—not on dependency and politics—but on freedom, dignity, and true partnership.
The retirement of USAID offers a much-needed opportunity to rethink America’s development strategy and to build relationships based on respect, innovation, and mutual benefit—not aid dependency and control.
