Japhet Ruto, a journalist at TUKO.co.ke, brings over eight years of expertise in financial, business, and technology reporting, providing insightful analysis of Kenya's economy and global market trends.

United States (US) President Donald Trump's administration has formally notified Congress of its intention to disband the United States Agency for International Development (USAID) and place its functions under the State Department.

This is in light of constitutional objections to the Republican leader's dismantling of the government agency responsible for providing foreign aid worldwide.

USAID was established by a congressional statute.

However, US Secretary of State Marco Rubio revealed in a post on X that the Trump administration would consolidate the agency's autonomous operations into the Executive-controlled Department of State.

"When properly implemented, foreign aid can safeguard our borders, promote our national interests, and fortify our alliances with important allies. Unfortunately, USAID has since deviated from its primary purpose. Consequently, the expenditures were too high and the gains were too small," Rubio explained.

State Department spokesman Tammy Bruce also reiterated the US government's stance to dismantle USAID.

"Department officials have informed Congress of their intent to undertake a reorganisation that would involve discontinuing the remaining USAID functions that do not align with administrative priorities and realigning certain USAID functions to the department by July 1, 2025," she said, as reported by Al Jazeera.

Bruce denied that the country's capacity to respond to global crises, such as the earthquakes that struck Thailand and Myanmar on Friday, March 28, would be impacted by the dissolution of USAID.

"We are ready to move on. The (dissolution of USAID) hasn't affected our capacity to carry out those responsibilities or respond to those aid requests when they arise," she reiterated.

Geopolitical economist Aly-Khan Satchu opined that Kenya should streamline its budget by doing away with unnecessary expenses.

"You need to start setting your priorities if you can take an entourage of 100 people to support an unsuccessful AU bid. There is no alternative, external sources have dried up," Satchu told

Kenya needs to change its approach, according to Leshan Loonena Naisho, a Kenyan political economist who specialises in international political economy, development policy, and international relations, who spoke to TUKO.co.ke.

According to Naisho, Nairobi ought to solidify its standing as a regional centre of commerce to compensate for funding cuts and job losses.

"To draw in US investment, Kenya should concentrate on enhancing its business climate, especially in the manufacturing and technology sectors."

He advised the government to utilise its status as an ally to the US.

"The administration of President William Ruto must be careful to protect national interests and maintain strong bilateral ties. This means maintaining diplomatic flexibility, promoting American security cooperation priorities, and emphasising Kenya's strategic importance in East Africa," he added.

The US disbursed around $72 billion (KSh 9.31 trillion) in foreign aid in 2023 alone. About half of that amount was distributed by USAID.

However, Rubio declared that USAID had cancelled 83% of its contracts, amounting to 5,200 programmes.

The US Secretary of State said the move would save Washington, DC, billions of dollars. The remaining 17% of programmes will be overseen by the State Department.

Following Trump's executive order on Monday, January 20, foreign aid was halted.

In his 'America First' policy, the 47th president of the United States called for a review, pointing out that the ongoing distribution of monies under USAID pushed a liberal global agenda.

Source: TUKO.co.ke