Jimmy S. Shilue*
The recent 90 days suspension of USAID international development and humanitarian aid has intensified the debate around aid effectiveness in recipient countries. In the West African nation of Liberia, a longstanding ally of the United States where USAID’s presence stretches back to the 1950s, government is still struggling to develop an effective approach to mitigate and/or ameliorate the impact on critical sectors of the sudden effect of USAID’s pull-out. Liberia is a country of about 5,250,187 million population, with a significant segment of its development support heavily reliant upon development aid provided largely by the US-Government, but also by development partners such as Sweden, Ireland, Germany, UN, the World Bank, European Union, AFDB, various INGOs, etc. Supports from these partners contribute to projects across different healthcare, education, energy infrastructure, peacebuilding, security, good governance, the rule of law and human resources development, etc.
The combined contributions of these external partners make Liberia one of the most aid-dependent countries globally. According to the Centre for Global Development (Feb 2025) data, Liberia is among 26 of the poorest countries in the world and one of the eight countries where over a fifth of its assistance comes from USAID. Poverty is widespread in Liberia with around 30 percent of the population living below the extreme international poverty rate of 2.15 USD per person per day. If using the middle-income poverty rate of 3.65 USD, the proportion of the population living below the threshold increases to almost 70 percent. According to the World Health Organization (WHO), the estimated global life expectancy in 2021 was 61 years. At the core of Liberia’s development challenges are the interconnected issues of low level of literacy (48.3%, UNESCO, 58.6%, LHPC), high level of vulnerable employment (77.19%, World Bank), and multidimensional poverty (45.0%, LPHC), which are indications of severe deprivation of access to basic services. By all measures, Liberia is at a low level of human development. Based on the United Nations Human Development Index (HDI) 2023/24 report, Liberia has a low score (0.487) and an unsatisfactory global ranking (177 of 193 countries), and 17 of the 33 countries categorized under the lowest level of human development in the world. This state of human development implies that a vast majority of the population is unable to enjoy long and healthy lives, access quality education, receive social protection, or acquire decent jobs. It is therefore safe to assert that Liberia’s human capital lacks the knowledge to transform natural resources into wealth, indicating challenges in education and literacy. While these foreign donors and partners play an important role in Liberia’s post war development, the significance of US support through USAID – the largest foreign aid donor to Liberia – cannot be overstated.
Acknowledging the impact of aid suspension, the Minister of Finance and Development Planning, Augustine Ngafuan, underscored the setback this development will have on the country, but also expressed confidence in Liberia’s ability to adapt. Minister Ngafuan was quick to emphasize that the cascading effect will impact not just USAID projects but also on a wide array of initiatives implemented by local and international non-governmental organizations (NGOs) dependent on USAID’s funds. He said that organizations that have been instrumental in delivering critical services are already scaling back operations, thus jeopardizing millions of Liberians’ access to healthcare, education, and other essential services.
The Aid Debate: Dependency vs. Self-Sufficiency
While development aid can be a valuable tool, it is not a guaranteed path to development for any country, and its effectiveness depends heavily on the recipient country’s context and how the aid is implemented. For example, despite the hundreds of millions flowing in development aid since the end of the civil war in 2003, Liberia has not made significant progress in its infrastructure and human resource development. The question therefore is: Why? In her captivating article and book ‘Dead Aid’ Dambisa Moyo argued that official aid is easy money that fosters corruption and distorts economies, creating a systemic culture of dependency and economic challenges. Although I do not fully agree with her arguments, it is clear that foreign aid’s effectiveness in fostering development is debated, with critics arguing it can lead to corruption, dependency, and undermine local economies and political systems, while proponents emphasizing its potential for addressing immediate needs and promoting long-term development.
Lambasting the aid industry, Dambisa also contends that aid has not merely failed to work in developing countries in Africa but has compounded the continent’s woes. She cites figures showing the exponential growth in poverty in an era of burgeoning aid. For example, 10 percent of Africans were living in poverty in the 1970s has expanded to 70 percent. Meanwhile, the total aid to African countries since 1960 is calculated to be in excess of $2.6 trillion. While foreign aid, especially aid for humanitarian purposes, has no doubt saved many lives, there are concerns about its unwitting negative impact on recipient countries. Economist William Easterly has shown that more often than not it tends to go to the wrong people, while Georgetown University’s Ken Opalo argued that it both robs countries of “the chance to cultivate policy autonomy” and helps prop up and prolong the lives of otherwise unsustainable political regimes. A renowned human rights advocate in Liberia said, “HIV aid and Foreign aid are both killers but only separated by the letter (s)”.
Indeed, the World Bank (Oct 2024) report alarms over the slow pace of poverty reduction to a near standstill, with 2020-2030 set to be a lost decade. This is not only alarming but indicates that after a decade of growth in Africa, little change in Poverty at the Grassroots has taken place (Afro Barometer 2013). The report indicates that people living in countries undergoing or emerging from conflicts, including Liberia, appear to be particularly vulnerable to lived poverty, especially food shortages.
Despite billions in aid since the civil war ended in 2003, Liberia has seen little substantial progress in infrastructure and human resource development. Liberia exemplifies this paradox. It possesses vast natural resources, including newly identified reserves of lithium, neodymium, silver, nickel, zinc, uranium, and cobalt (China survey, February 2025). Yet, despite this abundance, successive governments have failed to convert natural wealth into sustainable development. Instead, mismanagement, corruption, and opaque governance have led some critics to equate Liberia’s situation with the ‘Dutch disease’—a phenomenon where resource inflows, including aid, weaken a country’s broader economic competitiveness. While the term primarily refers to the economy’s response to a commodity boom, such as an increase in resource prices, and its deleterious impact on competitiveness of the tradable sectors of the economy, it is used by analogy for other sorts of inflows such as the receipt of transfers (foreign aid or remittances) or a stabilization-induced capital inflow. In my view, Liberia fits the latter characterization perfectly because since 2003, the country has received substantial foreign aid, amounting to billions of U.S. dollars. For instance, in 2011 alone, the country received $765 million in official development assistance, which constituted 73% of its gross national income. In 2010, Liberia received its highest annual aid, totalling $1.416 billion. More recently, in 2022, the country received $484.75 million in foreign aid, a decrease from $606.33 million in 2021.
What, therefore, is responsible for the lack of development in a country so endowed with natural resources that receives so much external aid? In 1984, Warner Max Corden was among the first academics to attempt to explain the Dutch disease. Later, discussions of the resource curse started in 1988 when Alan Gelb reflected on oil as a possible source of socio-economic problems, rather than an actual blessing (Corden, 1984; Gelb, 1988). The relationship between the topics became tighter once the Dutch disease was accounted for as one of the possible causes behind the occurrence of the resource curse. Liberia can avoid the so called ‘Dutch disease’ by improving accountability in natural resource management and implementing strong policies which promote economic diversification, transparency, and good governance. In contemporary Liberia, the USAID aid suspension implicitly highlights concerns over bad governance- manifested through mismanagement, corruption, and lack of transparency in the aid sector not only from US authorities, but also in Liberia.
Accountability and Governance: The Real Challenge
Liberia’s struggles with accountability and governance have long been flagged by international actors. Former U.S. Ambassador Michael McCarthy, during the latter part of President Weah’s administration, accused Liberian lawmakers of prioritizing personal gain over essential services, leaving rural citizens destitute. Former Ambassador McCarthy accused the lawmakers of “buttering their own bread” and “feathering their own nests” while underfunding hospitals and service centres, leaving rural citizens “destitute.” His visit to rural Liberia exposed him to the level of industrialised grand corruption involving multiplicity of high levels actors. “The blocking of resources is so complete that it must be institutional: and the lack of any alarm being raised indicates a syndicate involving players at the legislature, the Ministry of Health, and the Ministry of Internal Affairs” said McCarthy. His findings exposed deep-seated corruption involving multiple high-level actors across government ministries.
The exploitation of Liberia’s natural resources mirrors this trend. When oil was discovered in 2010, foreign investment surged, yet allegations of nepotism and rent-seeking prevented these revenues from benefiting the country. Reports by Global Witness indicate that some oil blocks were auctioned for as much as $50 million in signing bonuses, but much of this wealth was siphoned off by elites. Such mismanagement has deprived Liberia of opportunities to invest in industrialization and economic diversification. There are ways to reverse the resource curse. One way is to critically review colonial and contemporary concessions, especially development agreements that are merely exploitative and extractive not helping to transform Liberia’s economy into an industrialised one. Raw materials should be processed in Liberia and not exported. Liberia should also put in place policies to promote and strengthen local economy against global economic structures that often disadvantage many African nations.
Moving Beyond Aid Dependency: The ‘Big Push’ Strategy
To disrupt the dependency mentality, the Polish born economist, Paul Rosestein- Rodam, in the 1940 called for the ‘Big Push’ to move what was considered then as ‘Third Word’ in the ‘First World’. The current patronising mindset must be rebutted through a heavy shock, which will induce turbulence for real change. Certainly, the 90 days suspension of USAID support by the Trump’s Administration is a ‘Big Push’ for Liberia’s to move away from dependency and take more serious and concrete steps towards sound economic policy, improve transparency and accountability in the governance process. As I was drafting this article, incidentally, Foreign Policy Magazine released a Brief on March 21 2025 buttressing the augment that the current shift in U.S. presents an opportunity for African countries to reset their relationship with foreign aid as well as rethink the moral and philosophical underpinnings of African development.
Indeed, President Trump’s policy of America First is not only a catalyst for real change but a rude awakening that may ultimately compel African leaders, including those in Liberia, to start thinking more seriously about their citizens first. As we have seen, significant portion of foreign aid money is neither distributed evenly among the population nor used to promote growth and help the poor, but is instead used on so-called white elephant projects, dishonest procurements processes, and political campaigns, etc. As has been unearthed recently by the General Auditing Commission findings of President Weah’s administration, monies were criminally channelled through convoluted processes and siphoned by political elites to sustain their opulent lifestyle and political career at the expense of the impoverished masses.
Foreign aid can be impactful, but only when it is used for real developmental and humanitarian purposes, or during emergency disaster situations. But foreign aid is unlikely to develop a country like ours with weak accountability mechanisms. It only creates a culture of dependency, discouraging recipient countries from developing self-sustaining economies and fostering local solutions. No doubt Trump’s policy will have negative effect on some of the most vulnerable in our society as well as disrupt some of the good projects that are having impact on the lives of impoverished people and communities, yet it is, I believe, a radical game changer for its propensity to disrupt aid flows and compel African leaders, including in Liberia, to look inward for economic resuscitation and development.
The Changing Global Aid Landscape
From the formation of the Liberian state to present, exclusionary practice remains the hallmark of the governance system. Aid suspension is not just a challenge for Liberia—it signals a broader shift in U.S.-Africa relations. Foreign Policy Magazine (March 21, 2025) argues that this shift is an opportunity for African nations to rethink their development models. Instead of dependency, the focus should move toward trade and investment. As the global geopolitical landscape evolves, more donors are prioritizing trade-based partnerships over traditional aid. The current aid embargo by the U.S. is a radical way to stop the plundering and looting by pressurizing powerful political leaders for more accountable and inclusive decision-making in the efficient use and equitable distribution of natural resources proceeds. The effects of the Tump’s ‘America First’ policy is now leading to commendable austerity measures in Liberia- pressuring decision makers to start focusing on rationalizing expenditures, including cuts to domestic and international travel, salaries’ reduction, gasoline coupons and mobile phone credits for government officials, etc. However, aid suspension is not only hurting recipient countries but also affecting America as only a tiny share of U.S. development aid goes to foreign governments. Moreover, besides what is usually given to NGOs and international bodies to implement, significant proportion is spent in the United States, supporting U.S. based contractors and implementers, (EMISSARY, Feb 2025).
Meanwhile, the cascading effect is gradually reflected in the policy adjustments by other donors in Liberia. More and more donor governments are gradually moving from “‘aid dependency to trade and investment”. One expert suggests that U.S. Africa Policy should be driven by Trade, Not Aid because Washington’s focus on development assistance and democracy promotion has failed because the relationships has historically not been based on commercial engagement (Foreign Policy, February 11, 2025). From all indications, it is unlikely that it will be business as usual. Hence, Liberian government needs to take strategic steps to foster greater citizen participation in decision making processes and enhance local resource mobilization strategies. Some of the plausible ways to do this will include mapping and identifying existing structures and assets that are capable of contributing to the development agenda and strengthening community-led development initiatives by working with people that are already involved with activities that are making changes in the lives of people.
Additionally, enhancing domestic resource mobilization through a revision and adjustment of income and taxes policies. It should not only be about improving tax collection, particularly at this time with high unemployment among the youth, to avoid the Kenya’s scenario. Empowering local governments with financial autonomy and decision-making capacity will also boost development initiatives while also promoting public-private partnerships (PPPs) to encourage businesses to invest in Liberia.
The presence of the State outside Monrovia is very weak, hence rural community residents tend to deal with traditional leaders more in their daily activities. It is prudent to invest and improve the country’s customary system by leveraging traditional and informal justice mechanisms to compliment the statutory system. This will not only require collaborating with traditional leaders to integrate their approach and build synergy to ensure access to justice for all but it is essential to approach it with cultural sensitivity, ensuring that traditional practices are respected and integrated in a way that aligns with human rights standards. Also, steps should also be taken to formalize and support alternative dispute resolution (ADR) mechanisms to reduce reliance on costly formal court systems. In most rural communities, traditional leaders and elderly people (men and women) usually play ‘Stranger Father’ role as part of local social institution responsible for security and social cohesion (Morten Bøås, et al, 2017). As the first point of call for any visitor or stranger who wants to spend some time in the community, these local elders should be involved in the development of security strategy and development activities. Like the immigration at the borders, these local hosts are responsible for any guest, which minimizes security risks and ensures that the stranger behaves in accordance with the rules of the community. Such a system can be augmented and utilised amid resource scarcity.
Several decades of reliance on external aid have stymied the Liberian spirit of voluntarism and self-sufficiency. As such, there is a need to launch a national campaigns encouraging volunteer services for security, city ordinance /cleaning up and sanitation, justice, infrastructure development supported by the introduction of a rigorous civic education in schools and communities to promote awareness of rights and responsibilities.
As articulated in the National Reconciliation Roadmap, Liberians in the Diaspora have played a pivotal role throughout the history of conflict and civil war as well as since the post-war reconstruction efforts in Liberia. Nearly all political awakening and instability were designed and orchestrated through transnational ties, both fiscal and cultural. Hence, one of the ‘Big Push’ is to forge greater ties with the Liberian diaspora through mutual benefits partnership and shared responsibilities. In this regard, policies could be developed to encourage remittances not only for development projects and state building but to establish a Diaspora Development Fund where Liberians abroad contribute as well as invest in key sectors.
To prevent ‘Dutch disease’ in the natural resource sectors and mitigate the effects of USAID suspended support in the country, the Liberian government must swiftly undertake different initiatives aimed at disabusing the minds of Liberians on aid dependency as well as diversify the economy to avoid overdependence on resources and enforce strict budget transparency by publishing all revenues from natural resources and tracking their expenditure while fully implementing the Extractive Industries Transparency Initiative (EITI) standards to disclose payments from natural resource companies.
A Pivotal Moment for Liberia
Liberia is not the only country affected by the hurt of USAID support. And as far as I know, this may be a temporary measure intended to take an inventory of how American taxpayer monies both in America and recipient counties are spent. Conventional wisdom suggests that human being becomes innovative when confronted with shocks and stressor. Yes, the sudden disruption of aid is indeed disruptive and will leave recipient countries, including Liberia, with little or no alternatives to find immediate solutions. Yet ‘Dead Aid’ is not ‘Dead Nation,’ but an opportunity to develop a clear roadmap for governance reforms to regain international confidence, as well as develop innovative solutions and encourage a culture of accountability and regional engagement. It is about time Liberia’s leaders forge greater regional ties by working with regional bodies (like ECOWAS and the African Development Bank) for alternative funding and technical assistance as short term measure to fill the gaps created. In all, it is important to note that it will never be business as usual and during this austerity period occasioned by the new development with USAID, our public officials and leadership must readjust the country’s development priorities and develop a new mindset of putting Liberia first in line with President Boakai’s iconic slogan “Think Liberia, Love Liberia, and Build Liberia”. There is simply no other way out to do this. While ‘Uncle Sam and the Trump’s Administration may not neglect Liberia completely, they certainly want to see real progress in governance, which could potentially lead to the resumption of other forms of new bilateral engagements.
*The author is a leading CSO leader in Liberia involved with Natural Resource Governance, Rule of Law, Gender Advocacy, Transitional Justice, National Reconciliation, and an Adjunct Lecturer at the University of Liberia.
