Trump Budget Cuts Threaten AfDB Funding, Africa’s Development Goals
Donald Trump’s cuts to African Development Fund and climate-linked programs risk project setbacks, but the African Development Bank (AfDB) remains central to the continent’s economic ambitions
The Trump administration’s 2026 budget proposal has raised the alarm across global development circles as it outlines sweeping cuts to U.S. support for multilateral institutions, including a complete withdrawal of funding for the African Development Fund (ADF), the concessional financing arm of the African Development Bank (AfDB).
The decision, if implemented, would eliminate U.S. contributions to the ADF, disrupt key development projects across fragile African states, and undermine the continent’s climate financing and Sustainable Development Goals (SDGs) agenda.
Analysts warn that the implications extend beyond dollars and cents, signaling a broader shift in U.S. foreign policy away from multilateralism, climate action, and inclusive development.
“The US economic policy has shifted materially towards being trade based as opposed to aid,” said Samuel Sule, the CEO of Renaissance Capital Africa, a Lago-based investment firm.
“As such, aid dependent economies will need to adapt and trade based economies will require more formal agreements with the US and other markets including across Africa as seen with the Democratic Republic of Congo.”
ADF funding cut, a strategic blow
The ADF is a vital engine for inclusive growth across Africa’s poorest and most vulnerable countries. It funds everything from rural electrification and healthcare to food security and governance reforms.
The U.S. has traditionally been one of its largest contributors. But the Trump budget dismisses the ADF as “not aligned to Administration priorities,” effectively sidelining it.
“Without U.S. support, we face a funding gap that may force delays or cancellations of critical infrastructure, agriculture, and social programs across Africa,” a development economist in Lagos told BusinessDay. “It’s not just money, it’s momentum that’s being lost.”
The AfDB, headquartered in Abidjan, Côte d’Ivoire, has ramped up its support for Africa’s development in recent years. From launching the $614 million I-DICE initiative in Nigeria to investing in renewable energy and food security across the continent, the bank has positioned itself as a continental driver of sustainable, youth-centered growth. The U.S. pullback risks undermining these gains.
Broader cuts to multilateral banks
Beyond the ADF, the Trump administration has proposed a $555 million cut to combined AfDB contributions, even while maintaining funding for the World Bank’s International Development Association (IDA).
This selective approach reveals what experts describe as an ideological and transactional view of development cooperation.
“It’s a clear departure from coordinated multilateralism,” said Chidi Okereke, a policy analyst. “It weakens the alignment between global banks and complicates co-financing of major projects, particularly in areas like climate resilience and public health.”
Rise of the DFC: competition or collaboration?
In contrast to the proposed cuts, the Trump budget expands funding to the U.S. International Development Finance Corporation (DFC) by $2.82 billion, embracing an investment-based approach that prioritises commercial returns over concessional development aid. This could create parallel financing paths in Africa.
While the DFC could offer new capital for large-scale infrastructure, it may also crowd out AfDB financing, especially in sectors where projects are not structured for private returns. Still, there are opportunities for collaboration, particularly in energy, digital infrastructure, and logistics, areas where both entities’ priorities may overlap.
Climate, DEI and strategic decoupling
Perhaps most troubling for Africa’s long-term development agenda is the Trump administration’s ideological departure from climate financing, gender equity, and multilateral governance.
The proposed budget cuts funding for climate investment platforms and categorically eliminates contributions to diversity, equity and inclusion (DEI)-linked international programs, calling them “radical” and “woke.”
This move poses a direct challenge to AfDB’s identity, which in recent years has championed climate-smart agriculture, gender-inclusive financing, and green energy. Under the current leadership led by Akinwunmi Adesina, the AfDB has committed to allocating 40 percent of its funding to climate-related programs.
But NJ Ayuk, the executive chairman of the African Energy Chamber, thinks AfDB needs to ‘shape up’ and refocus on its core mission such as financing fossil fuel projects, renewable energy and infrastructure to enable countries to develop. “Not climate change and social projects.”
“AFDB has no obligation to continue giving money to African nations that refuse to implement reforms that improve governance and economic growth. The Americans are tired of just giving aid money for nothing,” Ayuk said.
The road ahead rests on ‘yes or nay’
Despite the proposed budget, the final decision rests with the U.S. Congress, which may modify or reject aspects of the Trump administration’s plan.
However, the direction of travel is clear: Africa’s premier development bank may need to lean more heavily on other partners such as Europe, Asia, and internal capital mobilisation to close funding gaps and maintain project pipelines.
According to Sule, cited earlier, African development financial institutions (DFIs) require global relationships to promote development and to finance infrastructure. ”Many of them have embarked on this journey and continue to raise funding from diverse regions.”
“AfDB is the only AAA rated entity on the continent thus has the lowest cost of funding in Africa,” he said, emphasising that its financing role should remain of providing optimal “concessional” funding to the continent.
As the AfDB prepares for its 2025 Annual Meetings and the next replenishment round of the ADF, its ability to adapt, diversify partnerships, and retain strategic leadership in Africa’s development will be put to the test.
