The United States African Development Foundation (USADF) has terminated several key development grants in Kenya, including a notable Ksh6.3 million investment for a WhatsApp marketing chatbot. In a statement released by the Department of Effeciency (DOGE),a federation body run by Elon Musk on Tuesday,April 8, confirmed that the Kenyan grant had been cancelled.
The termination is part of a broader reduction in U.S. aid to Kenya, which is expected to leave a significant gap in funding across various sectors.
Treasury Cabinet Secretary John Mbadi revealed that Kenya is set to lose approximately Ksh52.3 billion in the fiscal year 2024/2025 due to these cuts. The abrupt halt in funding is already having ripple effects on sectors such as health, education, governance, and food security.
Among the affected initiatives was a WhatsApp chatbot project intended to help small businesses reach more customers through automated marketing. This digital innovation was part of Kenya’s growing shift toward leveraging technology in enterprise development.
The education sector has also been hit hard. A planned Ksh2.8 billion allocation for teacher training and support for technical and vocational education and training (TVET) programs has been put on hold. In the governance sector, a Ksh1.1 billion program meant to support voter education ahead of the 2027 elections has also been scrapped.
Startups are particularly vulnerable to the funding freeze. Over the past decade, USAID’s Development Innovation Ventures (DIV) program invested over $100 million in Kenyan entrepreneurs developing solutions in agriculture, health, and renewable energy. Companies like Pula Advisors, which recently received $1.5 million to expand crop insurance for smallholder farmers, and electric bus company BasiGo, which received similar funding to scale operations to Rwanda, now face serious financial uncertainty.
In total, over Ksh108 billion worth of grants and contracts in Kenya have been cancelled. Major international contractors like DAI Global and International Development Group Advisory Services have lost projects worth billions of shillings, including efforts to reform education systems through teacher training and curriculum development.
The funding cuts are linked to broader policy shifts under the U.S. administration, raising concerns about the sustainability of foreign-aid-funded programs in Kenya and other African countries.
As development stakeholders regroup, questions remain about how Kenya will fill the funding gap left behind and how the loss of U.S. support will affect innovation, service delivery, and long-term economic growth.
