Demelash Tekesete, a consultant for an NGO, was stunned by the sudden halt of US Agency for International Development (USAID) funding.

“It was unexpected and shocking,” he said.

His work, focused on equipping youth with job skills, internships, and university awareness programs, depended entirely on USAID funding. The abrupt cut has upended his life. He has lost his job.

“You make plans, rent, school fees, daily expenses, and suddenly, they’re all gone,” he said. “This decision destroys lives overnight.”

Demelash, a father of one, earned 34,000 Br monthly, enough to provide for his family and secure his daughter’s education. Now, he faces uncertainty, struggling to cover rent and tuition.

“How can I pay school fees in the middle of the year? How will we afford rent?” he asked.

Since taking office, US President Donald Trump has temporarily suspended USAID aid, severely impacting Ethiopia and other countries reliant on aid. The funding halt has disrupted local NGOs, stripped jobs, and stalled crucial projects.

On January 31, 2024, State Minister for Health Dereje Duguma issued a directive to all regional health bureaus, ordering the immediate termination of all employment contracts funded by USAID and CDC. According to UNAIDS, this affects around 5,000 public health workers who have been integral to Ethiopia’s HIV response.

The funding cuts not only affect employment but also threaten to undermine the country's health system. UNAIDS warns that the abrupt loss of skilled personnel will create a transition crisis.

In Oromia Regional State, the health bureau has already informed 2,000 contract workers across districts that their contracts, funded by USAID and CDC, are terminated. These workers provided vital services, including technical advice, medicine and pharmaceutical supply, and HIV/AIDS counselling.

Kiya Fule, program head at the Civil Society Resource Center (CSRC), a local NGO, stated that the cuts are preventing many initiatives from achieving their goals. One such program, fully funded by USAID, was designed to support civil society through training, mentorship, and consulting. However, with the funding cut, the program has been suspended.

This initiative was in its second round. In its first phase, it supported seven initiatives, including human rights programs. The second round, which launched in September with 10 initiatives, was scheduled to conclude in July but came to an abrupt halt in January due to the funding suspension.

The crisis is rippling across the country, with devastating effects on families, local organizations, refugee camps, and critical health services.

The USAID is a major funder in Ethiopia, financing development projects, health initiatives, and providing humanitarian aid. In the 2022/23 fiscal year, the country obtained 2.3 billion dollars from the USAID. From 2014 to 2023, USAID provided Ethiopia over nine billion dollars in the form of on- and off-budget funding.

In the 2022/23 fiscal year, development partners signed new commitments worth 1.7 billion dollars, 39pc decrease from the previous year, and disbursed 4.9 billion dollars for development programs, projects, and humanitarian aid, an increase of 1.6 billion dollars, 50pc, from the previous year, largely due to emergency relief efforts.

The impact of USAID’s funding freeze is expected to hit refugee camps particularly hard. Ethiopia hosts 1.1 million refugees across 26 sites, including 20 camps and six settlements.

These refugee camps depend on a collaborative effort, while the government provides land, water, and security, international and local organizations supply food, shelter, healthcare, education, and sanitation.

Sileshi Demesew, head of public relations & communication at the Refugees & Returnees Service (RRS), warns that refugees are being left in limbo as dwindling aid exacerbates an already dire situation.

Funding from partner organizations has been declining for years.

According to the RRS, about 48 organizations support Ethiopia’s refugee camps, including the United Nations High Commissioner for Refugees (UNHCR), the World Food Programme (WFP), the International Finance Corporation (IFC), the World Bank (WB), the International Medical Corps (IMC), the International Rescue Committee (IRC), Save the Children International (SCI), and the local NGO Action for Need Ethiopia (ANE).

The USAID funding freeze has placed immense strain on the refugee camps and the refugees themselves. This could increase the risk of conflict between refugees and host communities over scarce resources.

The Gambella Refugee Camp, home to over 385,000 South Sudanese refugees, has been in decline for years. Mezgebewerk Gebremariam, head of the RRS Gambella branch, reports that funding has already dropped by 35pc from 2023 to 2024 and is set to decline by 40pc from 2024 to 2025. This has led to reduced food aid and left only 57pc of refugees with adequate shelter.

Water and sanitation services have fallen below minimum standards. While the global standard is 20 litres per person per day, refugees in Gambella currently receive only 13 litres, down from 17 litres in previous years. Similarly, food rations have declined sharply. In 2022, refugees received 15kg to 13kg of food per person daily, but this has now dropped to just 10kg.

Overcrowding, limited access to clean water, poor sanitation, and a lack of healthcare and education services have worsened conditions. Schools in the camp have shut down due to funding shortages, while critical aid programs have been discontinued.

The closure of Action Against Hunger, which supported children and breastfeeding mothers, and the shutdown of the International Medical Corps (IMC), which provided mental health and medical care for young mothers, have been particularly devastating.

“This is like pouring oil on fire,” Mezgebewerk said, describing the impact of USAID’s funding pause on an already struggling camp.