Inspired by insights from Zainab Usman’s “The End of the Global Aid Industry” (Foreign Affairs, May 2025)
For over six decades, many African countries have run on the engine of foreign aid. From mosquito nets in rural clinics to textbooks in underfunded schools, donor money, mostly from the West, has plugged massive gaps in basic services.
But in 2025, the fuel is drying up. One of the biggest players, USAID, has effectively been shut down. Its $20 billion aid budget is gone. The UK has slashed its aid budget by 40 per cent, and Germany is cutting back by $5.3 billion.
A continent that has long depended on donor flows must now find a different route forward. That route is industrialisation.
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Let’s be honest. Aid had its place. It kept children in school, supported fragile health systems, and provided emergency relief in conflict zones. But it rarely built factories, scaled up exports, or created long-term jobs. At best, it alleviated suffering. At worst, it created dependency.
Now that this tap is closing, Africa has no choice but to face a tough question: How do we grow wealth from within?
Take Malawi, for instance. According to World Bank data, more than 45 percent of its national budget in recent years has come from aid. But now, critical health and education projects are being frozen.
In South Sudan, where aid makes up over 70 percent of the national income, several UN-backed programs have been terminated, leaving thousands of families without food, medicine, or safe water.
These are not isolated stories; they are signs of a deeper global shift. Western voters, especially in the U.S. and Europe, are pushing back against foreign aid. A 2025 YouGov poll in the UK shows 65 percent of Britons now want defence prioritised over development spending.
“One answer lies in industrialisation, making and exporting more goods locally: and there are lessons Africa can learn from others who have walked this path.”
The narrative is changing: “Why send money abroad when we have problems at home?” The result is a drying up of the funds African governments once counted on.
But this crisis could be a blessing in disguise. Without the cushion of foreign aid, African countries are being pushed to stand on their own feet. That means asking a tough but necessary question: How do we build lasting wealth from within?
One answer lies in industrialisation, making and exporting more goods locally: and there are lessons Africa can learn from others who have walked this path.
Consider Vietnam. In 1986, Vietnam was one of the poorest countries in Asia. Instead of clinging to foreign assistance, the country turned its focus to industrialisation, building export-driven factories, investing in transport infrastructure, and attracting foreign manufacturers.
Today, it’s a global hub for electronics, textiles, and smartphones. According to the IMF, Vietnam’s GDP per capita has grown from just over $100 in the late 1980s to nearly $4,300 in 2024.
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Africa has similar potential. Ethiopia was on a similar path until its internal conflict stalled progress. From 2005 to 2019, Ethiopia’s industrial parks created over 80,000 manufacturing jobs and attracted firms from China, Turkey, and India. Countries like Rwanda and Ghana have also made strides in improving business environments to attract investment, rather than aid.
The challenge is not ideas; it’s action. Africa needs bold, coordinated strategies to grow its industrial base. This means building infrastructure that supports production roads, railways, and power grids. It also means investing in education that focuses on technical and vocational skills.
Right now, Sub-Saharan Africa has the world’s youngest population, with over 60 percent under the age of 25. If these young people are equipped with the right skills, they could become the backbone of a new industrial revolution.
Another big drain on Africa’s potential is illicit financial flows. According to the UN Economic Commission for Africa, the continent loses over $90 billion every year to corruption, tax evasion, and capital flight. That’s more than the total annual aid it receives. Fixing this doesn’t require aid; it requires strong laws, transparent institutions, and a commitment to block leaks.
And here’s the clincher: global investors are already interested. The rise of clean energy technologies, electric vehicles, and AI is creating demand for African resources such as cobalt from the DRC, lithium from Zimbabwe, and rare earths from South Africa. But to benefit, African governments must do more than export raw materials.
They must move up the value chain, processing, refining, and eventually manufacturing within their borders.
There’s also a huge opportunity in regional trade. The African Continental Free Trade Area (AfCFTA) could unlock a $3.4 trillion market across 54 countries. But for it to work, countries must reduce tariffs, ease border bottlenecks, and invest in logistics.
The truth is, aid was never going to transform Africa. It may have patched the wounds, but it never healed the system. Now that the bandage is gone, Africa must rebuild from the inside out.
It will not be easy. But if leaders seize this moment to invest in real industrial capacity, not just pilot projects or donor reports, Africa could shift from being the world’s aid recipient to one of its growth engines.
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Just ask Christelle Kwizera, a Rwandan mechanical engineer and entrepreneur who founded Water Access Rwanda at just 22. Her company builds locally manufactured water systems that now serve over 100,000 people. She started with little more than technical skills, a clear mission, and local resolve – no major foreign grant, no high-profile donor. In her words: “We need to stop waiting for saviours. Africa doesn’t lack ideas; it lacks investment in those ideas.”
Kwizera’s story is not an anomaly. Across the continent, young Africans are building, coding, and innovating. If governments can match their ambition with the right infrastructure, policies, and protection against capital flight, the future won’t be imported, it will be made in Africa.
The window is open. The time is now.
Oluwatobi Ojabello, senior economic analyst at BusinessDay, holds a BSc and an MSc in Economics as well as a PhD (in view) in Economics (Covenant, Ota).
