How new Trump order on foreign assistance will hit your pocket

Numerous projects in Kenya funded by the US government could stall as the Trump administration starts a clean up of its foreign development assistance programmes.

This is after new President Donald Trump embarked on his first agenda during his first day in office following his second return after thrashing Kamala Harris of the Democratic Party in last year’s elections.

The American government funds numerous projects from health, including HIV and AIDS, to security, energy, agriculture and startups in Kenya through its agencies. Data by the US shows it disbursed to Kenya Sh84 billion ($647.2 million) in 2024 in foreign assistance, which is largely aid and grants. This was however a reduction from Sh115.32 billion ($887.08 million) disbursed in 2023.

The bulk of the funds disbursed last year was channeled to emergency response including emergency food assistance at Sh29.5 billion ($227 million), HIV and AIDS Sh24.36 billion ($187.4 million) and basic health Sh7.4 billion ($56.82 million). Majority of the funds were managed by US Agency for International Development (USAid).

President Trump on Monday issued an executive order shortly after being sworn in, halting for three months foreign development assistance to assess and see whether the programmes are in line with US foreign policy. 

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The order was subject of heated debate online among Kenyans, who on one side noted the impact that it would have on certain health programmes and could put lives at risk. On the other hand however, some Kenyans want prudent use of their own resources and not depend on US taxpayer funds.

“It is the policy of United States that no further foreign assistance shall be disbursed in a manner that is not fully aligned with the foreign policy of the President of the United States,” reads the executive order.

Trump ordered a “90-day pause in United States foreign development assistance for assessment of programmatic efficiencies and consistency with United States foreign policy.”

Over the period, US agencies will not release funds to projects in different countries being undertaken by the governments, non-government organisations, international organisations and and other entities while at the same time undertaking reviews to ascertain efficiency of the programmes and that they are as also in consistency with US foreign policy.

“All department and agency heads with responsibility for US foreign development assistance programs shall immediately pause new obligations and disbursements of development assistance funds to foreign countries and implementing non-governmental organizations, international organisations, and contractors pending reviews of such programs for programmatic efficiency and consistency with United States foreign policy, to be conducted within 90 days of this order,” reads the order.

Trump had earlier in his inauguration speech said he would start a complete review of trade between the US and other countries, with a view of imposing tariffs on certain imports by the country.

“I will begin the overhaul of our trade system to protect American workers and families. Instead of taxing our citizens to enrich other countries, we will tariff and tax foreign countries,” he said.

“For this purpose, we are establishing the External Revenue Service to collect all tariffs, duties and revenues. It will be massive amounts of money pouring into our treasury coming from foreign sources.”

One of the programmes that has allowed entry of goods from foreign countries into the US is the African Growth and Opportunity Act (Agoa), which enables some African countries to export a range of goods to the country both quota and duty free.

The Act was passed in 2000 during the Bill Clinton era to strengthen relations with Africa. Kenya is among major beneficiaries of Agoa, although the general feeling has always been that the country, and indeed Africa, has under exploited Agoa opportunities.

While analysts expect the US under Trump will renew Agoa, which expires in September, there have been views that it could be altered and a shorter list of goods enjoying the quota free and duty free status. 

And while he made snide remarks about African countries during his first term as US president, he signed into law the AGOA and MCA Modernisation Act. The Act was expected to strengthen Agoa while at the same time enable the US government owned Millennium Challenge Corporation (MCC) flexibility to work with partner countries in growing regional integration.

The Central Bank of Kenya (CBK) said it would closely monitor the potential impact of Trump’s policies on the Kenyan economy.

CBK Governor Kamau Thugge said while the global economic landscape is dynamic, the CBK is committed to assessing how international policy shifts, including those in the US, could affect Kenya’s trade relations and overall economic performance.