Ethiopia: Civil Society Organizations in Ethiopia Scramble for New Finance Sources As ‘Abrupt’ USAID Funding Freeze Threatens Jobs, Humanitarian Operations

Addis Abeba — Following the United States Agency for International Development’s (USAID) “abrupt” cessation of financial aid and assistance, the Ethiopian Civil Society Organizations Council called on the government to pursue diplomatic solutions, warning that thousands of civil society employees could lose their jobs.

In an interview with Addis Standard, Ahmed Hussein, the Council’s President, noted that organizations relying fully or partially on USAID funding are particularly vulnerable.

“Some organizations receive aid from USAID, while others secure support from embassies and international institutions,” Ahmed explained. “However, there are those that are funded predominantly or entirely by USAID. These organizations could be severely impacted.”

He emphasized that employees who signed multiyear contracts fear the sudden loss of USAID support could disrupt salaries as early as next month and result in terminated contracts.

Although the exact number of active civil society organizations currently under the Council is “difficult to determine,” the president stated that there are 5,300 registered civil society organizations under its umbrella.

“There is no comprehensive data available on the number of affected institutions,” he said. “However, it has been emphasized that detailed information is needed on the types of projects these organizations were undertaking, the allocated budgets, the number of beneficiaries, and the scope of ongoing initiatives.”

In an interview with Addis Standard, a senior manager at a civil society organization, who requested anonymity, warned that halting USAID’s emergency assistance could destabilize critical programs.

“The urgent life-saving activities will be affected,” he said, confirming that the suspension could cause significant damage.

The senior manager also mentioned that his organization is currently gathering information on the potential impact, but he predicted that “the challenge will be significant” as organizations will struggle to pay employees and fund ongoing projects.

This development follows a statement issued by the Authority for Civil Society Organizations (ACSO) two days ago, announcing that USAID had decided to halt its aid. The statement further instructed organizations receiving USAID financial support not to “transfer, dispose of, or sell property” or move resources to third parties outside of “regular or project work” without explicit permission. It cautioned that any violations would result in “appropriate action.”

The Authority also emphasized that it is “closely monitoring the situation” and will provide “necessary support and follow-up” based on future developments.

Recently, the Ministry of Health (MoH) also directed regional and municipal health bureaus to suspend all activities and payments related to employees hired under U.S. government budget support. This instruction followed the termination of funding from the Centers for Disease Control and Prevention (CDC) and USAID.

The MoH confirmed that it had received an official directive mandating that “any work or payment” conducted through U.S. budget support “should cease” as of 24 January, 2025.

Reports suggest that the directive impacts nearly 5,000 employees, whose contracts were established between health bureaus and U.S. funding agencies with support from the ministry.

Founded by former President John F. Kennedy in 1961, the USAID was established to streamline and coordinate U.S. foreign aid programs. As of November 30, 2024, the agency operates with a budget of $22.6 billion, supporting a broad range of initiatives, from emergency and humanitarian response to development assistance and promotion of democracy worldwide.

USAID’s Ethiopia portfolio is among the largest in Africa, second only to Egypt. In 2023, the agency provided over $897 million in humanitarian aid to Ethiopia, addressing conflict, climate shocks, and food insecurity. In March 2023, it announced an additional $331 million in assistance, bringing the year’s total to over $1.2 billion.

USAID’s engagement in Ethiopia spans 22 sectors, funding more than 357 projects–managed independently or in collaboration with 131 international and local partners working across the nation.

In recent weeks, however, a series of new directives from U.S. President Donald Trump’s administration has created uncertainty among humanitarian organizations, including the USAID and its partners.

At the center of this disruption is a 90-day suspension of foreign aid disbursements, issued by President Trump on 20 January, 2025. This was followed by a stop-work order from the U.S. State Department, halting “existing grants and contracts,” along with “an immediate freeze on new foreign aid expenditures.”

On 28 January, 2025, Secretary of State Marco Rubio announced an emergency humanitarian waiver, permitting the “continuation of life-saving humanitarian assistance programs” throughout the 90-day foreign aid review period.

Despite this waiver, humanitarian organizations working with USAID report that they have been forced to halt programs “abruptly,” resulting in job losses and a reduction in essential services for vulnerable populations.

In an update issued on 05 February, 2025, the Joint United Nations Program on HIV/AIDS (UNAIDS) has warned that the “pause of U.S. foreign assistance” to Ethiopia’s national HIV response will have “particularly severe” consequences for more than 270,000 beneficiaries across the Oromia and Gambella regions, as well as Addis Abeba.

UNAIDS emphasized that Ethiopia’s Health Information System has been “severely” impacted by the stop-work order and the subsequent “termination of 10,000 data clerks,” who play a critical role in entering antiretroviral data into the health information management system.

In a statement issued January 05, 2025, the Council announced that the recent suspension of USAID projects worldwide is negatively impacting the work of civil society organizations operating in Ethiopia.

The council stated that USAID has been a major source of support in Ethiopia’s development and humanitarian response process in collaboration with numerous civil society organizations, but the “sudden suspension” will have an inevitable negative impact on these organizations and the communities they serve.

The exact amount of obligated funding that will be terminated remains uncertain. However, insiders suggest that significant reshuffles and realignments are likely.

Stakeholders emphasize that the greatest impact will be on individuals who directly benefit from these projects, as they will be deprived of the transformational services previously provided.

Ahmed stressed that the sudden termination of aid without any prior notice not only affects civil society organizations but primarily harms the communities they serve.

“Particularly in the case of urgent life-saving services, the sudden termination of aid without prior preparation has raised concerns,” he said. “The council has urged the government to prioritize diplomatic efforts to mitigate the impact.”

In an interview with Addis Standard, a former community mobilization manager at Save the Children warned that the pause in U.S. foreign assistance will have severe consequences for local NGOs.

“For instance, in the education and health sectors, there will be direct effects on the supply chain, including the procurement of essential items such as notebooks and sanitary products,” he explained. “Budget constraints will also pose challenges in conducting workshops and orientations, which require traveling to various locations. Similarly, training-related expenses may no longer be covered.”

According to him, the stop-work order will force local NGOs to struggle to pay their employees, potentially reaching a point where they can no longer sustain their workforce.

“Ultimately, these factors–whether direct or indirect–will negatively affect beneficiaries,” he argued. “In the absence of funding, many organizations may be forced to halt their operations altogether.”

A local consultant who has worked with international humanitarian organizations in Ethiopia echoed similar concern, stressing that local NGOs must prepare for the worst.

“What is certain is that aid organizations that have relied on USAID funding must embrace this uncertainty and work towards finding alternative avenues to sustain their development targets,” he emphasized.

In its statement, the Council announced that it has formed a dedicated team to explore coping strategies, including alternative funding sources and support mechanisms, to help affected civil society organizations mitigate the negative impacts. Ahmed also disclosed the Council is preparing to host a high-level meeting to address this issue and find lasting solutions.

“This in itself should teach us a lot,” the president said. “When an institution provides funding, you should not operate solely dependent on that support. If the funding is cut, there must be a plan to sustain operations. This principle should guide discussions moving forward.”

By Addis Standard.