US and South African officials contribute to misinformation about funding cancellations
There is no shortage of myths regarding the cancellation of foreign aid in the United States. These include the widely held misconception that Pepfar is exempt from reductions in US aid, and the belief that grant termination is only happening in South Africa. Many of these falsehoods have been strengthened by US and South African officials. Spotlight and Ground Up analyze some of the most popular misconceptions.
Myth 1: USAID Cuts apply only to South Africa
For some, here is the basic story about why the US cut aid to South Africa: The South African government took Israel to the International Court of Justice (ICJ) on charges of genocide in Gaza and passed separate laws allowing expropriation of land without compensation. Encouraged by Afriforum’s lobbying, the US government retaliated by terminating funds from the US Organization for International Development (USAID) to South Africa.
This story is not completely wrong. On February 7, President Donald Trump issued an executive order indicating that the United States would halt its support to South Africa for the above policy decisions.
However, this is not the original reason that South Africa lost most of the USAID funds. In fact, executive orders targeting South Africa have been issued for over a week when USAID was already beginning to suspend domestic grants. And the first reason to do this had nothing to do with South Africa’s domestic or foreign policy.
Instead, on January 20th, Trump issued an executive order suspending almost all international development funds, waiting for a 90-day review. Shortly afterwards, USAID began issuing suspension orders to beneficiaries around the world. This included, but was not limited to, South African recipients.
As a result, US-funded organizations were forced to close their doors around the world. Hundreds of US-funded soup kitchens have been closed in Sudan, a hunger-stricken, facing one of the world’s most violent conflicts. In Ethiopia, organizations that provided shelter and therapy to rape survivors were forced to close, but the food aid destined for the country was left at the port of Djibouti where they risked corruption before it could reach anyone.
In South Africa, the most important impact of the cut was that drop-in centres providing HIV testing, treatment and preventive services were shut down while USAID-funded staff working in government clinics were forced to return home.
All of these events have occurred since late January. By the time Trump issued the February 7 executive order targeting Pretoria, there probably wouldn’t be many halted USAID grants in South Africa.
The Trump administration said it finished its review after just over a month after the 90-day suspension period. The majority of the grants did not serve us in our profits, so we decided to do so and could end up cancelling permanently from the suspension. Therefore, from late February, beneficiaries around the world began receiving cancellation notices. For example, a US-funded organization that supported 350,000 HIV-positive patients across Eswatini, Tanzania and Lesotho lost all of their USAID funds.
The USAID spreadsheet obtained by Groundup and Spotlight (first discussed by The New York Times) suggests that around 86% of all grants have been cancelled globally – the actual value of the retained award is roughly equal to the value of the finished award. Overall, all cancelled contracts cost more than $7.5 billion (approximately R1.4 trillion) worldwide.
Therefore, US funding cuts are not endemic to South Africa and are not merely occurring due to expropriation laws, ICJ cases, or lobbying in the Africa Forum. Initial stop instructions and subsequent termination notifications apply globally.
Of course, local factors could have led USAID to have a more aggressive line against South Africa when deciding which contract to end. The USAID spreadsheet shows that only a small portion of the grants to South Africa are retained. Additionally, the US National Institutes of Health (NIH), which awards competitive grants for medical research, appears to be moving towards cutting funding for clinical trials, particularly in South Africa. Compared to many others, South Africa also lost a lot just because they were the top recipient of US donor money for HIV and TB-related services.
Trump’s hostility towards Pretoria may have strengthened US funding cuts in South Africa, but that is not the original source of the problem – this forms part of the global crisis.
Myth 2: Pepfer is exempt from reducing aid (or did)
Shortly after Trump’s executive order suspends aid for 90 days, the US State Department announced an exemption that appears to have allowed continued funding for humanitarian activities that save certain lives. The State Department said this includes providing antiretroviral (ARV) to HIV patients.
Much of the funds South Africa has received from the US comes from the President’s AIDS Relief Program (PEPFAR), which supports HIV-related services. There are two major US institutions that distribute PEPFAR funds. USAID and the Centers for Disease Control and Prevention (CDC).
The US embassy in South Africa said that Pepfer-far-funded organizations, which had provided life-saving services, could resume their activities due to the waiver. This message was widely spread in the media and social media. For example, Clayson Moniera, deputy director of the Bureau of International Relations and Cooperation, posted a widely shared tweet, stating that the US Embassy has “confirmed” that the Pepfar service was not affected.
However, the US Embassy’s claim that the service could continue was not true.
A few weeks after the waiver was issued, Spotlight and Groundup looked into the status of several Pepfar-funded organizations that provided ARVs to people with HIV (services explicitly listed under the exemption). We found that none of them could resume US-funded work.
The only Pepfaal funds that continued to flow were channelled by the CDC, which had nothing to do with the exemption. Instead, the CDC simply resumed all funds after US courts opposed the freeze on Congressional funds. The PEPFAR fund distributed by USAID remained frozen, and the exemption did not provide rest.
The problem is, in contrast to what US officials proposed to the media, organizations were not immediately allowed to simply return to work to provide life-saving services. Instead, they had to get approval. In the meantime, their funds remained frozen.
Some South African PEPFAR-funded organizations, like Engage Men’s Health, have sought information from USAID, but simply did not respond. Otherwise, PEPFAR-funded organizations have been instructed by USAID to provide a revised budget that includes only core services. Many organizations submitted these but did not have approval.
By the end of February, USAID had moved from its so-called 90-day suspension period and simply began termination of the grant. The exemption only applies to the suspension period and has not been formal effect now. However, it is not clear that there had been many impacts as Spotlight and Groundup South Africa were not covered by a single exemption.
At a global level, some organizations reportedly received exemptions, but USAID’s system for processing invoices and making payments often remained inaccessible and had difficulty getting paid.
The Global Development Center has collected data on global USAID expenditures and found that “the exemption process had a zero effect on releasing the USAID fund to awardees between the announcement of the expenditure freeze and the announcement that the contract review has been completed.”
Myth 3: This is Trump’s money – he can do what he likes
In a presentation to Congress, Health Minister Dr. Aaron Mossoaredi worked to cut Pepfer’s funding by saying “Trump hasn’t borrowed South Africa (a) for cents.” Meanwhile, Gayton Mackenzie, Minister of Sports, Arts and Culture, said, “Trump has the right to do that (assistance), that’s his money.”
The problem with these statements is that this is not Trump’s money. The United States is not a feudal monarchy, and Trump is not its king. The US Congress decides how much money should be spent on foreign aid and what purposes it should be spent. It is the role of US executives (for example, the president) to resolve the way these decisions are implemented.
A preliminary ruling issued by a federal court in Washington, D.C. on March 10th summarises the issue. Referring to the Trump administration’s unilateral decision to end aid, it states:
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The legality of the Trump administration’s actions is likely to include long-term conflicts, and the administration argues that the decision stems from its constitutional right to decide how spending should be allocated. But in the meantime, South African officials seem to imply that the Congressional budget is merely a Trump personal bank account.
Furthermore, while the United States is not legally obligated to provide foreign aid, it is noteworthy that it has signed thousands of contracts with organizations worldwide and pledged to provide billions of dollars over the years. If you want to cut this support, you may have announced that you will not renew these contracts after they have expired, or you have announced that you have warned that your funds will be cut short. This is usually how everyone else works. For example, the UK and the Netherlands have both announced that they will cut foreign aid, but only from 2027.
If they were warned, the US-funded organization may have been looking for other sources of funding, or simply arranged to continue receiving support from other agencies after the client was closed. Instead, the Trump administration chose to send out an effective stopwork order and termination notice immediately. As a result, people who relied on the U.S. Assistance, for life-saving medical assistance, suddenly remained unchanged anywhere else. In some cases, HIV patients stopped taking ARV.
Of course, Motsoaledi’s statement about Trump may feel that it is not intended solely to show that the South African government is not entitled to external support and therefore is responsible for the crisis and urgency. But so far there is no indication that it is doing this.
The crisis began in late January, but the National Ministry of Health was needed until March 3rd, just to hold a meeting with South African USAID recipients. In the meantime, no new money has been allocated to fill the huge hole left by the Pepfer Cut.
Published by Spotlight and Groundup.
