Just as moving companies serving the US government are bracing for potential aftershocks, President Donald Trump’s January 2025 executive order on the workings of the U.S. Agency for International Development (USAID) is reshaping donor funding policies and impacting economies worldwide.
The order initiated a 90-day freeze on new obligations and disbursements for U.S. foreign aid to ensure alignment with “America First” priorities. Alongside the pause came the State Department’s stop-work orders for existing programs, with only a few exemptions allowed for emergency food assistance and some military aid to key allies.
Following this decision, USAID, the primary vehicle for US foreign aid, employs over 4,600 staff globally, with 60% stationed overseas. A sizeable number of these personnel work in East Africa, supported by other local staff. The workforce might be reduced to 290 employees, and only a limited number of individuals will be assigned to cover entire regions. For example, just 12 individuals would be responsible for the entire African continent, while eight would represent all of Asia.
For East Africa, where the lifeblood of many organisations — from non-profits focusing on poverty alleviation and healthcare to education, research, climate change and sustainability, conservation, and government partnerships for local infrastructure development and economies rely on the steady flow of dollars from across the Atlantic, the move could have serious economic effects.
In 2024, USAID channelled USD 6.6 billion to sub-Saharan Africa. These funds support a vast network of programs and projects across the region, all requiring skilled personnel – often international experts and a considerable number of regional and local staff. Kenya alone receives approximately USD 1.68 billion annually through various healthcare initiatives and climate resilience projects.
Non-governmental organisations (NGOs) and international agencies often rely on specialised moving services to facilitate the movement of staff, equipment, and supplies. More often than not, expats and other international staff brought in to manage U.S. projects needed to be repatriated. With a freeze on donor funding, the demand for international relocations will experience a slowdown. With many projects put indefinitely on hold, the flow of expatriate executives requiring help with housing, schooling, and logistics will, going forward, be diminished.
Meanwhile, should the US, for example, initiate executive orders that give “localisation” and “direct funding to local partners” a priority, on the surface, this sounds progressive, but the practical implications could be far-reaching. If it mandates its donor agencies to reduce funding channelled through international non-profits and instead choose to directly fund local organisations, a significant contraction in their presence in East Africa is almost inevitable. As is usually the norm, international NGOs maintain regional headquarters and project offices in countries with active projects, staffed by a mix of expatriate and local staff. These offices rely on consistent funding streams to operate, implement programs, and, most importantly, employ international staff who require relocation services.
A sudden shift towards direct local funding, although potentially vital in the long run if implemented thoughtfully and with adequate capacity building, could trigger a rapid exit of international staff. Agencies facing funding cuts or realignment may be forced to downsize regional operations, put their projects on hold, repatriate foreign staff, and significantly reduce their reliance on international expertise.
Moving companies with federal contracts, unfortunately, may suffer the most as increased scrutiny of their work could drive down prices and margins in the relocation industry. Once the review period is over, these moving companies may need to become more efficient and competitive to win contracts in this environment. This could involve streamlining operations, investing in technology, or exploring new markets and service offerings.
As regards the other possible indirect effects of the funding freeze, there is its impact on the host countries themselves. Many East African governments have become dependent on funding from U.S. donors not only to support development projects but also to subsidize infrastructure that facilitates the movement of goods and people. For example, funding for road maintenance, storage facilities, and even customs processes can be indirectly linked to donor programs.
If funding from U.S. donors is halted or delayed, governments may be forced to cut these essential services. This can pose logistical challenges for relocation companies. Poor road conditions, delays at border crossings, and reduced support from local authorities can all increase the cost and complexity of relocation operations. Relocation companies may face increased operational costs, which can then be passed on to customers.
That said, if the trend of reducing donor funding continues, it could lead to long-term shifts in how specialised relocation services are structured within East Africa. Companies must remain agile and responsive to these changes.
