What could SA lose if Pepfar is stopped? We work it out

As from this week Friday at 11.59pm (EST), staff employed directly by the US Agency for International Development (USAID) will all be on forced leave. Those working in countries outside the US — including in South Africa — will have to return home within 30 days, and services and support contracts will be ended, a notice on the new USAID website reads.

The site has only one page. 

It replaced the previous online home of USAID, which went dark about a week ago, according to Internet Archive.

Earlier last week, data sites that track budgets and payments for programmes funded by the President’s Emergency Plan for Aids Relief (Pepfar) had gone down too. 

Without accessible data, it’s hard to get a concrete sense of how much South Africa stands to lose should Pepfar be stopped and USAID be dismantled — as it’s likely to be, after reports of a notice by the US Secretary of State, Marco Rubio, on Tuesday that parts of the agency will be absorbed into the department of state and the remainder could be abolished altogether.

USAID is one of four US government bodies that roll out Pepfar-funded projects in South Africa — and in the past it’s been in charge of handling around half of the plan’s budget for the country, budget approval records show. 

The uncertainty stemming from the surprises coming out of the Capitol since January 20 makes it close to impossible to plan ahead — and bodes badly for health and HIV projects in South Africa that rely on US funding.

But exactly how bad is unsure, which “is the biggest point”, says Sigrid Kite-Banks, strategic communications manager at Bulungula Incubator, a nonprofit in the Xhora Mouth Administrative Area in the Eastern Cape.

“At the moment, so much of this we just don’t know, and we don’t know how we’re going to brace ourselves or what the fallout is going to be.” 

Even though Bulungula’s projects don’t directly depend on Pepfar or USAID funding, many of their collaborators do, says Kite-Banks. And it’s not only at the community level that trying to figure out what comes next is tricky, she says. “Also at higher levels, it’s unclear just how integrated USAID and Pepfar funding is, which makes it hard to even predict what kind of impact this will have in the end.”

So then where do we start looking to get a sense of what is really at stake in what seems to be a case of spin the wheel? 

Money flows, we thought — because no project can work without cash, whether it’s for running tests, handing out medicine, paying staff salaries or maintaining a clinic.

So, with easy-access data sets gone dark, we dug through other documents and sources we could still get to, drew up a spreadsheet and did some sums to get an estimate of how much money could be lost this year.

The answer? Potentially around $202m — maybe more. It’s roughly R3.7bn. And that’s just for the current (US) financial year (which runs from October to September). 

It’s just a thought experiment, though, based on what we think are reasonable assumptions. But it’s a starting point at least. 

Here’s how we reasoned. 

Follow the money

The official letters Pepfar sent to the South African mission team show that around $500m was pledged to projects in the country every year since 2021. 

Moreover, promises of USAID funds sat between $273m and $413m in those years, the US government’s dashboard for foreign aid shows. At least, it did until about 10am on Wednesday. Then the dashboard stopped loading too. But we’d saved the spreadsheets earlier — just in case. You can find them here. 

Filtering the data according to projects focused on HIV and general health, we calculated that they accounted for 75—90% of USAID’s spending in South Africa over the past four years. 

This isn’t explicitly linked to Pepfar projects, though — other US government bodies, such as the department of state, Peace Corps and the Centers for Disease Control and Prevention, also handle Pepfar grants for South Africa. 

But when we looked at trends from available Pepfar documents, roughly 50% of its budget for the country over those years appeared to be allocated to USAID as the implementing agency — which aligns fairly well with the amounts we could see on the foreign assistance dashboard.

Putting those numbers together gets us to USAID potentially handling 37.5% — 45% of the funds Pepfar has given to South African projects (50% × 75% = 37.5%, and 50% × 90% = 45%).

Applying these estimated proportions to the Plan’s available budget, for example, for the 2023 financial year (which in the US funding world would run from October 2022 to September 2023), works out to between $171m and $205m being available to be handled by USAID.

The actual amounts we saw linked to USAID’s handling on the foreign aid dashboard were $178m for HIV projects and $30m towards general health — a combined total of $208m, which squares fairly well with the ballpark estimate we calculated.

What does SA stand to lose?

With our prework done, and the figures roughly checking out, we turned our attention to the key question: what does South Africa stand to lose — moneywise — if Pepfar were to be stopped and USAID, as its implementing arm, were shut down? In other words, we looked only at the potential loss of Pepfar money handled by USAID, not anything that might be redirected through another implementing body.

Our calculations show South Africa could lose around $202m this way — about R3.7bn.

We base this on the trend of the planned Pepfar budget for the country gradually declining from $529m in 2021 (about R9.8bn at the current exchange rate) to $454m (about R8.4bn) in 2024. 

According to the foreign aid data dashboard, USAID payouts towards HIV and health projects went from $401m to $242m in the same period. Proportionally, this works out to 75% of what Pepfar could have made available in 2021 and 53% in 2024.

Given the declining proportion each year over this period, we assumed that the payout in 2025 would be 7 percentage points less than last year — in other words, down from 53% to 46%. 

In November, a Pepfar source confirmed that South Africa had roughly $440m (R8.1bn) to spend this year. A possible 46% paid out through USAID would amount to $202m, or R3.7bn. (The official memo in which the planned budget is given, shows about $449m, but it’s stated as a “notional amount [that] is subject to change pending FY 2024 appropriations”). 

Conservatively, we could assume that funds for the first quarter (October-December) may have been paid out already, as Trump’s funding freeze order was issued only on 20 January. If $202m was made available for four quarters, it means that — if our cautious assumption holds — about $50.5m could have been paid out by after the first three months of the 2025 cycle. 

That leaves $151.5m that would not have been paid out yet. So, our calculations work out to a potential loss of anything between $151.5m and $202m this year — that is, R2.8bn-R3.7bn.

‘Change moves at the speed of trust’

The sudden changes in how funding is paid — if at all — are bigger than just amounts of money on paper. An analysis by the Foundation for Aids Research, AMFAR, shows that close to 14,000 Pepfar-supported health workers could lose their jobs in South Africa if this funding stops. About 60% of these — close to 8,300 — would be community health workers. Another almost 2,000 nurses — many have already been sent home without pay — could lose their jobs too.

Nurses and community health workers are key to South Africa’s HIV response and losing them would make it even harder for the country to reach its goals to end Aids as a public health threat by 2030 — which are already off track. 

Kite-Banks explains that with past Pepfar funding, Bulungula has been able to set up dedicated nomakhaya teams to help people with HIV in their community stay on treatment. It’s worked so well that they now have no-one falling through the cracks — this in a province where about 885,000 people have HIV. 

But all this progress could be at risk.

“We are strong believers that change moves at the speed of trust,” she says. It takes years to build up the trust needed to break down the stigma surrounding HIV, and they’ve seen from experience that turning things around for the better doesn’t come overnight. 

What’s coming out of the White House at the moment achieves the opposite. 

Says Kite-Banks: “It’s wild to think that a person halfway across the globe can sign a piece of paper and derail a system so easily.” 

• Linda Pretorius is Bhekisisa’s content editor. She has a PhD in biosystems from the University of Pretoria has been working as a science writer, editor and proofreader in the book industry and for academic journals over the past 15 years. At Bhekisisa she helps authors to shape and develop their stories to pack a punch.

• Jacques Verryn is a software developer and independent consultant, with special interest in data analysis and visualisation.

This story was produced by the Bhekisisa Centre for Health Journalism. Sign up for the newsletter.