The termination of big-ticket non-governmental organisation (NGO) contracts by the US government in Kenya triggered a Sh25.3 billion drop in the flow of money out of the country last year.
The decline in outflows provides a glimpse of the economic disruption of President Donald Trump’s policy to limit foreign aid.
New data by the Central Bank of Kenya (CBK) shows that money sent from Kenya to individuals and households abroad through licensed money remittance providers dropped 27.5 percent to Sh66.57 billion in 2025, from Sh91.85 billion a year earlier.
The CBK attributes the decline largely to the closure of several NGOs, including the United States Agency for International Development (USAid), which had supported relief and development programmes across the region.
The organisations generated financial flows in both directions, including money sent by foreign workers and other expatriates based in Kenya to their families and dependants abroad.
“The reduction in remittance outflows is largely attributed to the closure of several non-governmental organisations, including the United States Agency for International Development (USAid),” the CBK says in its 2025 Bank Supervision Annual Report.
“The NGOs provided relief services within the African region, thereby supporting substantial financial inflows and outflows within the region. The shutdown of these organisations significantly affected countries such as Somalia, where NGO-related funding constitutes a substantial share of external financial inflows.”
The drop means the country sent Sh25.28 billion less abroad through money remittance providers than the record amount in 2024, marking a sharp reversal in a segment that includes payments by individuals working in Kenya as well as other international transfers.
The decline came as the Trump administration embarked on one of the biggest restructurings of US foreign assistance in decades.
On taking office in January 2025, Mr Trump ordered a 90-day review of US foreign assistance under his “America First” policy and directed a pause in new foreign assistance obligations and disbursements.
USAid began terminating programmes and contracts as the administration moved to dismantle the agency. Reuters reported in February last year that the administration was eliminating 1,600 USAid jobs in the US as part of the restructuring.
The consequences of Mr Trump’s order quickly spread to countries where USAid-funded organisations were major employers.
In Kenya, Business Daily analysis showed the value of terminated USAid contracts and grants had reached Sh108.34 billion by early March last year. The programmes covered areas including trade and investment, education, energy, health, rural development and governance.
The cuts hit an ecosystem extending well beyond NGOs themselves. Healthcare was among the sectors most immediately exposed.
A Sh67.43 billion deal by DAI Global was one of the single biggest casualties of a purge by the US Department of Government Efficiency (DOGE) on USAid projects in Kenya. The DAI Global contract, dubbed Prosper Africa Trade and Investment Activity, was scheduled to run from September 25, 2021 to September 24, 2026, and aimed to boost trade and investment between the US and African nations.
The DAI Global programme has been actively involved in Kenya by facilitating connections between Kenyan businesses and American investors, particularly in sectors like agriculture. Notable activities under the programme included supporting investments in canola oil production through AgDevCo funding, market assessments to identify investment opportunities, and collaborating with USAid Kenya East Africa Mission to promote private sector engagement in the region.
The Joint United Nations Programme on HIV and AIDS (UNAIDS) reported that US-funded medical personnel, including doctors, clinical officers, nurses, laboratory technologists, pharmacists and community health workers, were affected by the stop-work order. Civil society organisations and community-based groups also faced funding cuts and loss of staff.
Other parts of the economy were exposed through large development programmes that were cancelled or scaled down.
The disruptions created a chain extending from international donors to NGOs, contractors, consultants, health workers, teachers, researchers and other service providers.
The remittance market felt the effects through organisations sending money to projects and suppliers as well as through individuals whose incomes depended on the aid-funded economy.
Foreign nationals working for NGOs, development agencies, consultancies and implementing partners are among the people who send part of their salaries from Kenya to relatives and dependants in their home countries.
The cancellation of contracts and layoffs that followed cut the capacity of some of these workers to make such transfers. Similar pressure was applied to Kenyan workers with financial commitments abroad, including school fees, family support and other obligations.
The disruption also reached Kenya’s savings and credit cooperatives sector, where regulators warned that saccos whose membership was concentrated among workers in donor-funded organisations faced pressure from the loss of external funding.
The Sacco Societies Regulatory Authority (Sasra) last year identified 16 regulated saccos with 72,172 members and a combined Sh37.41 billion in deposits as directly exposed to changes in donor funding and global geopolitical developments.
The affected institutions comprised two deposit-taking saccos and 14 non-withdrawable deposit-taking saccos whose members were drawn largely from donor-funded projects, institutions and programmes.
Sasra warned that the funding disruption could trigger member exits, increased demands for withdrawal of savings, slower loan growth and deterioration in loan quality as affected workers lost income.
“The Authority projects that a total of 16 regulated SACCOs…will be directly affected by these policy changes and thus likely to experience sharp reduction in their membership with increased member exits and demands for deposits (savings) refunds, coupled with reduction in the growth of loan assets or deterioration of the quality of loans due to potential default,” Sasra said in September last year.
The reduction in outflows contrasted with the continued growth of money coming into Kenya from its diaspora.
Remittance inflows through money remittance providers rose 14 percent to a record Sh503.34 billion in 2025 from Sh440.18 billion in 2024. The CBK attributed the increase, particularly towards the end of the year, to higher flows from Kenyans in North America and Europe.
