The US Africa Development Foundation (USADF), which has supported over 1,000 businesses across 22 African countries, has slashed $51 million in funding for African SMEs and startups, threatening cooperatives, smallholder farmers, and early-stage ideas across sub-Saharan Africa, including Kenya and Nigeria.
The cuts, announced by the Department of Government Efficiency (DOGE)—an agency created by President Donald Trump and led by Elon Musk—will leave dozens of initiatives without funding, including $48,406 for a WhatsApp marketing chatbot for small businesses in Kenya and a $84,059 for a wellness incubator in Nigeria.
Some of the hardest-hit projects include nearly $230,000 for a shea butter project in Burkina Faso, about $240,000 to promote pineapple juice in Benin, and $246,000 for mango drying facilities in Côte d’Ivoire.
Since its launch, Nigeria and Kenya have been the programme’s biggest beneficiaries, receiving $20.4 million and $16.9 million, respectively, to support rural and women-led SMEs. Around 211 SMEs and startups in Nigeria and 186 in Kenya have received grants through the initiative.
While most of the projects are small, the grants from the US government provide critical risk capital that commercial banks and venture capital are often unwilling to give. The abrupt funding cut could affect value chains, especially for small agricultural production businesses like Benin and Burkina Faso initiatives.
DOGE’s mandate is to “optimize the federal government” by eliminating inefficient or unnecessary expenditures. On Tuesday, the agency said it has already saved American taxpayers over $140 billion, including cancelling USAID programmes.
The implications of USADF cuts, particularly for Kenyan SMEs and startups, are stark. The agency gives a direct-to-business funding model that bypasses governments, instead awarding grants and technical support directly to founders and businesses.
Most of the funding goes to women-led ideas in rural or early-stage markets, providing them with a vital source of non-dilutive financing. The USADF withdrawal comes two months after USAID cut over $100 million in startup funding through its Development Innovation Ventures (DIV).
USAID’s startup funding programme supported over 30 Kenyan startups, providing grants ranging from $500,000 to $6 million to help scale operations and prove the viability of their ideas.
As the Trump administration recalibrates US international commitments, further funding withdrawal from local initiatives appears likely. The cuts may also reignite the debate on building self-reliance to protect African startups from the shocks caused by political shifts in Washington.
