MINDSCAPES SERIES VOLUME X
A National Imperative: Navigating the Collapse of Traditional Aid and Forging Nigeria’s Development Sovereignty
BY BARR. EPHRAIM OKON, PH.D.
For over half a century, Nigeria’s development narrative has been inextricably linked to a complex ecosystem of international partnerships—a web of bilateral aid, multilateral support, and philanthropic interventions that has formed the bedrock of national progress from public health to governance. The contributions were immense and quantifiable. In 2023, USAID alone disbursed over $1 billion in aid to Nigeria, complemented by substantial support from other top donors, including the Global Fund ($385.8 million) and the UK ($135.7 million), underpinning life-saving projects across the country. These aids, however, were never intended to supplant government responsibility but to strategically complement it. For instance, the United Nations Population Fund (UNFPA) has played a vital role in addressing Nigeria’s “unmet need” for family planning, with its Supplies Partnership providing millions of dollars in commodities that had the potential to avert millions of unintended pregnancies. Similarly, the United Nations Development Programme (UNDP) and UNICEF have focused on strengthening national systems, as seen in Akwa Ibom State’s collaboration with UNDP on its UniPod innovation hub, where the state provided the vision and local infrastructure while UNDP contributed technical expertise and connections to global best practices. These partnerships were built on the assumption of a stable global order, but that foundation is now facing a present and devastating crisis.
The return of a second Trump administration is not a potential threat but a present reality that is already causing untold havoc. The administration has initiated a near-total freeze on foreign aid, issuing “stop-work” orders on existing contracts and grants. The stated goal of merging USAID into the State Department has effectively paralyzed the agency, which is no longer a reduction in funding but a systemic dismantling of the global health, education, and humanitarian frameworks that the agency helped build. This is a fundamental ideological shift, rooted in a nationalist “America First” doctrine that views foreign aid not as a strategic tool for global stability but as a fiscal burden and a political liability. This withdrawal marks a decisive departure from decades of bipartisan consensus that saw international development as a core pillar of U.S. foreign policy, often used to combat the influence of rivals and secure diplomatic allies. The current policy, however, prioritizes domestic political gain over global engagement, leading to a rapid and unpredictable retreat.
The consequences are immediate and severe. The significant reduction in USAID funding in 2024 to an estimated $780 million has already led to a massive financial vacuum. Life-saving programs have been abruptly halted, with a key anti-malaria initiative in the North-East seeing a significant portion of its funding rescinded, leaving a critical gap in the procurement of insecticide-treated nets and leaving millions exposed. The immediate humanitarian fallout has been so dire that the U.S. was forced to approve a rare emergency allocation of $32.5 million in hunger assistance in February 2025, a small, targeted fund that pales in comparison to the billions in comprehensive aid that have been withdrawn. International Non-Governmental Organizations (INGOs) that relied on USAID funding are closing offices and downsizing staff in great numbers, and in Maiduguri, a major hub for humanitarian aid, the local economy has been hit hard as the exodus of NGOs leads to a sharp decline in employment and a decrease in demand for goods and services. This disruption is part of a wider, enduring trend where Western powers are reducing their contributions to international bodies and shifting their priorities to more politically palatable or high-impact, short-term projects.
A National Strategy of Development Sovereignty
In the face of this unprecedented crisis, Nigeria must urgently adopt a national strategy of “Development Sovereignty,” where external partnerships are a complement, not a substitute, for a robust and self-sufficient domestic development engine. The Nigerian government, therefore, faces a clear, two-pronged set of choices: fortify the domestic engine and diversify external partnerships. The most fundamental response to donor retrenchment is to look inward, and the Tinubu administration has already laid a crucial foundation for this shift. On June 26, 2025, President Bola Ahmed Tinubu signed four landmark tax reform bills into law, including the Nigeria Tax Act (NTA) and the Nigeria Revenue Service (Establishment) Act, a historic overhaul designed to streamline revenue administration, enhance compliance, and broaden the tax base.
This proactive effort has already yielded remarkable results, with the Federal Inland Revenue Service (FIRS) collecting a record ₦21.7 trillion in 2024, surpassing its target of ₦19.4 trillion and marking a remarkable 75.6% increase from the previous year. While data from the National Bureau of Statistics (NBS) shows that Nigeria’s 36 states and the FCT generated a total of ₦2.43 trillion in IGR in 2023, the new national tax acts present a significant opportunity for states to align their local revenue collection with the new national framework. The FCT, for example, collected ₦252.83 billion in IGR in 2024, a 19.8% increase from 2023, demonstrating the immediate impact of such reforms at the sub-national level.
This remarkable fiscal performance is a direct result of the structural reforms that have automated collection and integrated a single digital tax infrastructure, making it harder to evade taxes and easier for compliant citizens and businesses to contribute. Beyond mere revenue, this shift demands a fundamental change in our fiscal culture. This includes a more aggressive and systemic approach to combating corruption and enhancing fiscal discipline. The World Bank estimates that Nigeria loses billions of dollars annually to illicit financial flows and corrupt practices, a sum that, if recovered and redirected, could single-handedly fund critical development projects. Therefore, strengthening oversight bodies, implementing transparent budgeting processes, and ensuring accountability for public funds are not just moral imperatives but economic necessities. The vacuum left by the withdrawal of foreign technical assistance from USAID and other partners must be filled by rapidly investing in building our own local human and institutional capacity. This requires a national commitment to training civil servants, establishing data-driven planning units, and fostering a new generation of policy experts from within our own universities and institutions.
Diversifying External Partnerships
While the domestic engine is the foundation, a diversified portfolio of external partners is the strategic hedge against shocks. The focus must shift from a donor-recipient dynamic to one of mutual interest and co-investment. The government must, with great urgency, create an attractive environment for foreign and domestic private investment, as private capital, unlike public aid, is often a more sustainable source of funding for long-term growth. This involves comprehensive policy reforms, a reduction in regulatory red tape, and targeted incentives for key sectors. The government must consider implementing a new Investment Promotion Act and a Regulatory Review Taskforce to ensure the ease of doing business improves dramatically, a key factor that continues to place Nigeria low on global rankings.
Furthermore, the government must actively engage its vast diaspora, a powerful economic force with annual remittances that consistently dwarf both official development assistance (ODA) and foreign direct investment (FDI). According to the Central Bank of Nigeria (CBN), remittances exceeded $22 billion in 2024, a figure that highlights their immense potential. To harness this force, the government must move beyond transactional relationships and create a formal framework for their engagement. A compelling mechanism would be the issuance of Nigeria Sovereign Investment Authority (NSIA) Diaspora Bonds, which would allow the diaspora to directly invest in national infrastructure projects and provide a stable source of capital. This must be complemented by a “Diaspora Knowledge Transfer Initiative,” a formal platform for skilled professionals in the diaspora to mentor local talent, consult on national projects, and facilitate technology transfer.
In a similar vein, Nigeria must explore alliances with emerging economic powers and other African nations, focusing on South-South cooperation to address shared challenges. For instance, a partnership with Brazil, a global leader in agricultural technology, could facilitate the transfer of expertise in land management and crop diversification to improve Nigeria’s food security. Similarly, a collaboration with China on digital infrastructure, while carefully navigating the risks of a debt trap, could accelerate our technological development. This approach, centered on shared problem-solving and mutual benefit, shifts the dynamic from one of dependency to one of strategic partnership.
Navigating the Challenges of a New Path
This strategic pivot, however, will not be without its challenges. The risks of a debt trap from new partners are real, necessitating a greater vigilance and rigorous due diligence. We must learn from the experiences of other nations and demand greater transparency and more favourable terms, ensuring that these partnerships do not compromise our long-term fiscal stability. The absence of foreign technical assistance from USAID and other partners means Nigeria must rapidly invest in building its own local human and institutional capacity to manage complex projects and implement policy reforms. This is a monumental task, as a recent report from the Nigeria Medical Association (NMA) reveals that the country faces a significant deficit of trained medical professionals, a void that was partially filled by foreign-funded health programs. Sustaining the political will for radical transparency and increased revenue collection will also be a colossal task in a federal system with competing interests, where some state governments and political elite may resist the central government’s tax reforms for fear of losing their fiscal autonomy or their ability to operate outside the new, stricter framework.
In this new landscape, Akwa Ibom State stands as a sub-national case study, having taken a forward-thinking approach articulated in its ARISE Agenda. The state’s focus on diversifying its economy away from oil and into agriculture, tourism, and rural development makes it inherently less dependent on the type of foreign aid now in crisis. The new national tax acts present a massive opportunity for the Akwa Ibom State Internal Revenue Service (AKIRS) to improve its IGR by leveraging the new national digital tax infrastructure. However, the state government must now act with even greater urgency, moving beyond simply aligning with the new national acts to aggressively implement its own internal reforms. This means accelerating efforts to attract private capital, empowering local institutions to fill the vacuum left by exiting INGOs, and investing in building the capacity of its own public health, education, and social service agencies. The ARISE Agenda provides the framework; the current crisis provides the imperative for a rapid and decisive implementation. The state must lead by example, transforming its revenue collection and demonstrating a blueprint for a self-sufficient future.
The task ahead for Nigeria is to scale these lessons. This moment of disruption, while challenging, is also a historic opportunity for Nigeria to assert its economic independence and build a new, more resilient development model. It is not just about extending a handshake to the world but about building a robust and self-reliant home that others will be compelled to partner with. Strategic partnerships are not merely instruments of aid; they are bridges to tomorrow, and Nigeria is learning to cross them not with a hopeful dependency, but with wisdom and an unshakeable resolve for self-reliance. This is the essence of a sovereign future in an age of uncertainty.
(Barr. Ephraim Okon, PhD, serves as the Special Assistant to the Governor of Akwa Ibom State on Grassroots Mobilisation. As a lawyer and a cultural diplomat, he brings over 17 years of experience in public health and strategic development communication to his work. He is an international development consultant who writes from his hometown of Okon in Essien Udim Local Government Area, Akwa Ibom State.)
