The recent pause in U.S. foreign aid funding has raised concerns across the globe, particularly in Africa, where such support plays a key role in health and education programmes. However, this moment also presents an opportunity for African nations to rethink economic models and pursue financial independence. For many, this funding freeze is a major setback, especially for African nations, which receive approximately $8 billion annually. Approximately 70% of U.S. non-humanitarian aid to Africa supports health programmes, with HIV/AIDS assistance taking the largest share. Additional funding strengthens agriculture, security, democracy, human rights, and access to quality education and social services. Much of U.S. aid to Africa is channelled through multi-country initiatives such as PEPFAR, the President’s Malaria Initiative, Feed the Future, Prosper Africa, and Power Africa. Direct government-to-government funding is minimal, with most assistance managed by U.S.-based contractors and non-profit organisations. While the funding pause raises concerns, it also serves as a critical moment for African nations to reassess economic models and unlock the full potential of their natural wealth. With strong governance and strategic investment, the continent can move beyond dependency toward a resilient, self-sustaining future. Each year, the continent loses an estimated $195 billion due to illicit financial flows, unregulated resource extraction, logging, wildlife trafficking, unregulated fishing, and environmental degradation, far exceeding the aid it receives. i.e., $ 8 billion from USAID and $59.7 billion as at 2023 of Official Development Assistance or Global Aid. Despite Africa’s wealth in natural resources from arable land to renewable (water, forests, fisheries) and non-renewable (minerals, coal, gas, oil) resources, the continent remains trapped in the ‘natural resource curse’. Why? Africa’s natural resource wealth is valued at $6.2 trillion yet it remains dependent on external aid. Sustainable management of these resources could unlock the continent’s economic independence and long-term development. Across the continent, some nations have already begun leveraging their natural resources to drive economic development, signalling a shift away from reliance on foreign aid. While these efforts showcase significant progress, they also highlight the need for continued investment in governance, sustainability, and value addition to maximise long-term benefits. Ghana has successfully leveraged its oil and gas reserves to stimulate economic growth through transparent revenue management. The Petroleum Revenue Management Act ensures that oil earnings are directed toward critical sectors like infrastructure, education, and healthcare. In the Great Lakes region, the KivuWatt Methane Gas to Power Project demonstrates how countries can turn environmental challenges into economic opportunities. By extracting methane from Lake Kivu, a shared transboundary resource between Rwanda and the Democratic Republic of the Congo, the project not only mitigates the risk of toxic gas eruptions but also generates 26 megawatts of power, enhancing regional energy security. Benin, a leading cotton producer in Africa, is investing €550 million to develop a vertically integrated textile industry. Through its “farm to fashion” initiative, the country aims to capture greater value from its cotton supply chain, fostering industrialisation and economic transformation. Namibia is harnessing its rich deposits of critical minerals such as lithium, which are essential for the global clean energy transition. With strategic investments in mining and refining capacity, the country is positioning itself as a key supplier in the renewable energy value chain. These examples illustrate that Africa is not lacking in resources. It is how these resources are managed that determines economic outcomes. While progress is evident, the continent must deepen its focus on environmental governance, industrialisation, and fair-trade agreements to ensure that resource wealth translates into broad-based prosperity rather than reinforcing dependency. To achieve sustainable development, Africa must strengthen environmental governance, ensuring transparent and responsible management of its natural resources. This requires stronger laws, institutions, and access to justice in environmental matters, along with inclusive decision-making that values indigenous knowledge in conservation efforts. Beyond governance, economic transformation is essential. African nations must improve infrastructure, land management, and tax structures to boost domestic revenue, reducing dependence on foreign aid. Proceeds from resource extraction should be reinvested into public services, ensuring that economic growth benefits the entire population. Fair agreements with multinational corporations (MNCs) are crucial. African states must negotiate equitable contracts, ensuring compliance with environmental and human rights laws. Mechanisms such as nationalisation clauses or contract termination rights can help protect national interests when corporations fail to meet obligations. Finally, sustainable mining, guided by the Africa Mining Vision, should be prioritized. Africa's green mineral reserves—cobalt, lithium, and graphite, position the continent as a key player in the global clean energy transition. Strengthening regional value chains through the African Continental Free Trade Area (AfCFTA) can expand industrial capacity and drive economic resilience. The abrupt halt in foreign aid is a wake-up call for Africa to take charge of its economic future. With $6.2 trillion in natural resources and vast renewable energy potential, the continent has the means to finance its own development, if managed properly. By strengthening governance, securing fair resource agreements, and investing in value-added industries, African nations can reduce aid dependency and drive sustainable, inclusive growth. Prioritising renewable energy and green mineral processing will not only boost economic resilience but also position Africa as a global leader in clean energy. The time for bold action is now. Governments, businesses, and civil society must work hand in hand to strengthen economic governance, invest in sustainable industries and ensure that Africa’s natural wealth, translates into long term inclusive development. The future is in our hands; will we seize it? Grace Vanderpuye is a policy analyst and development practitioner passionate about inclusive economic growth and governance. She is part of the Transformational Governance Team at UNDP Rwanda.
