Afghanistan is expected to experience a 7% economic contraction due to a sharp reduction in U.S. aid, according Amu citing a report by the Center for Global Development (CGD). The report identifies Afghanistan as one of the eight countries most dependent on U.S. assistance, with over 20% of its foreign aid previously coming from the U.S. Agency for International Development (USAID).
Before the funding cuts, USAID contributed 35% of all international aid to Afghanistan. Over the past three years, the United States has provided more than $3bn in aid, making it the country’s largest financial backer. However, the recent reductions have left Afghanistan highly vulnerable to economic shocks, disrupting key humanitarian and development programs.
CGD’s findings show that out of 26 low-income nations, eight—including South Sudan, Somalia, the Democratic Republic of Congo, Liberia, Sudan, Uganda, Ethiopia, and Afghanistan—rely on USAID funding for over 20% of their foreign aid. Afghanistan ranks third among the hardest-hit economies, with a projected 7% decline in its gross domestic product.
Meanwhile, a separate report from the USAID Office of Inspector General (OIG) highlights increasing security concerns, particularly in regions with terrorist groups such as ISIS. The report underscores the need for enhanced vetting of aid recipients to prevent misuse of U.S. taxpayer funds.
Further complicating the aid situation, an executive order issued by President Donald J. Trump on January 24 suspended third-party monitoring of U.S. aid programs, including those in high-risk areas such as Afghanistan. The order has halted oversight in multiple countries, including Ukraine, Ethiopia, Haiti, Gaza, Iraq, Lebanon, Somalia, Syria, and Venezuela. Following the release of the OIG report, Reuters reported that Trump dismissed USAID’s inspector general, raising concerns over transparency in foreign assistance programs.
The aid cuts have severely impacted humanitarian efforts in Afghanistan, leading to the shutdown of multiple United Nations programs and international aid organizations. Many Afghans are reporting worsening economic conditions as foreign assistance diminishes.
Since Trump’s return to office in 2025, the United States has not allocated any funding to Afghanistan through the United Nations, despite a prior commitment of $234mn for humanitarian initiatives.
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