USAID cuts aid: A wake-up call for economic independence

By Ahmed TAHIRU
For nearly a decade, the United States Agency for International Development (USAID) has been a lifeline for Ghana, injecting approximately US$1.55 billion into key sectors such as healthcare, education, agriculture, and infrastructure.

This funding has helped to reduce child mortality, improve food security, and expand access to clean water and sanitation. In 2024 alone, USAID provided US$190 million, with a significant portion allocated to basic healthcare (US$50 million), agriculture (US$46 million), maternal and child health (US$14.7 million), and water and sanitation (US$13.9 million).

However, the recent decision by the United States government to cut USAID funding to Ghana poses a significant threat to these critical sectors. The withdrawal of financial support could lead to disruptions in essential services, weakened economic stability, and a projected fiscal shortfall exceeding US$2 billion over the next decade. This situation is a wake-up call for Ghana: it is time to build a self-reliant and sustainable economy.

The question is: How can Ghana bridge this gap and sustain its development without relying on external aid?

The answer lies in bold economic policies, strategic revenue generation, and long-term investment in local industries.

The impact of USAID’s withdrawal on key sectors

Healthcare: a looming crisis

USAID’s contributions have strengthened Ghana’s healthcare system, funding hospital infrastructure, essential medicines, and maternal healthcare. Without this support:

• Medicine and vaccine shortages could disrupt immunization programs and disease control efforts.
• Rural health facilities may face underfunding, leading to poor service delivery.
• Medical infrastructure projects may stall, increasing pressure on already stretched hospitals.

Agriculture: a threat to food security

With nearly 50percent of Ghana’s workforce engaged in agriculture, USAID’s US$46 million support has modernized farming techniques and increased food security. The funding cut could:

• Reduce access to improved seeds, fertilizers, and irrigation for smallholder farmers.
• Lead to higher food prices, increasing inflation and deepening poverty.
• Weaken Ghana’s export competitiveness, affecting foreign exchange earnings.

Water & sanitation: rising public health risks

USAID has helped expand access to clean water and sanitation, especially in rural areas. A funding cut could result in:

• Limited investments in clean water infrastructure, exposing communities to unsafe drinking water.
• An increase in waterborne diseases like cholera and typhoid, threatening public health.
• Poor sanitation facilities in schools and hospitals, worsening hygiene conditions.

Given these challenges, Ghana must act swiftly to diversify its revenue sources and strengthen economic resilience.

Strategic solutions: how Ghana can achieve economic independence

Ghana’s economic future depends on innovation, resource optimization, and strategic policy reforms. Here are seven key solutions that can drive sustainable growth:

1. Strengthen domestic revenue mobilization

• Expand the tax base: Over 80percent of Ghana’s workforce operates in the informal sector. By formalizing small businesses, digitizing tax collection, and simplifying tax policies, the government can boost revenue without overburdening existing taxpayers.
• Enforce property taxation: Ghana’s property tax system is underutilized. Digitizing land records and improving collection mechanisms can unlock millions in annual revenue.

2. Boost Foreign Direct Investment (FDI) and private sector growth

• Target high-value sectors: Ghana must attract FDI in manufacturing, technology, and agribusiness, offering tax incentives while reducing bureaucratic delays.
• Diaspora investment bonds: Encouraging Ghanaians abroad to invest in national infrastructure and development projects could provide a steady stream of funding.

3. Maximize natural resource revenue

• Increase local refining capacity: Ghana should process more gold, oil, and cocoa locally, reducing reliance on raw exports and maximizing value addition.
• Enhance revenue transparency: Strengthening accountability in natural resource management can reduce corruption and ensure fair wealth distribution.

4. Improve public sector efficiency and reduce waste

• Eliminate non-essential expenditures: Conducting strict audits to remove ghost workers and inflated contracts can save billions.
• Digitize government services: E-governance can reduce corruption, enhance efficiency, and streamline revenue collection.

5. Leverage agriculture for economic growth

• Shift from subsistence farming to agribusiness: Ghana must invest in mechanized farming, irrigation systems, and Agro-processing industries to boost production and exports.
• Public-Private Partnerships (PPP): Encouraging private investment in agribusiness can

Final thoughts: turning crisis into opportunity

The withdrawal of USAID funding is not just a financial setback, it is an opportunity for Ghana to redefine its economic future. Rather than viewing foreign aid as a permanent solution, the nation must embrace self-sufficiency, innovation, and strategic investments.

By expanding revenue sources, eliminating inefficiencies, attracting investments, and maximizing local industries, Ghana can build a resilient, self-reliant economy that thrives beyond foreign assistance. This is the moment to act. Ghana must take control of its economic destiny because true independence is financial independence.

>>> The writer is a dedicated financial literacy advocate and aspiring entrepreneur with a mission to empower individuals through knowledge. With a deep passion for helping others unlock their financial potential, he believes that financial education is key to personal and community growth. Outside of his advocacy work, Ahmed is an avid reader and writer, constantly learning and sharing insights. Guided by the philosophy, “Your attitude, not your aptitude will determine your altitude,” he focuses on fostering a positive mindset for success in all endeavours. He can be reached via 233 543 460 166 and or [email protected]

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