Nigeria Risks Development Setbacks as $555m Foreign Aid Declines

U.S. aid withdrawal from the African Development Fund threatens Nigeria’s infrastructure projects, prompting calls for urgent reforms in project management and delivery.

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Nigeria may face significant disruptions to key infrastructure projects following a $555 million cut in U.S. contributions to the African Development Fund (ADF), a concessional lending arm of the African Development Bank (AfDB). The development signals a critical funding gap that could derail planned and ongoing development initiatives, ranging from transportation infrastructure to energy and water access.

The alarm was raised by the Project Management Institute (PMI) Sub-Saharan Africa Managing Director, George Asamani, who emphasized the need for Nigeria and other African countries to drastically improve their project execution frameworks to mitigate the funding shortfall.

“This is a defining moment for Africa. With declining aid flows, especially the U.S. cut to the ADF, we must reimagine how we deliver development,” Asamani said in a statement made available to The PUNCH. He stressed that boosting execution efficiency is the only way to preserve project continuity and secure long-term impact.


The U.S. government, traditionally one of the largest donors to the ADF, slashed its contributions as part of its 2025 fiscal policy realignment, prioritizing domestic economic needs. This move aligns with a broader trend of shrinking global assistance to Africa, as highlighted in a recent Organisation for Economic Co-operation and Development (OECD) report. The report noted a 2.7% decline in official development assistance to Africa, compounding the difficulties facing countries like Nigeria, already burdened with high public debt and post-pandemic recovery demands.


Nigeria, a top recipient of ADF-funded programs, risks delays or outright cancellation of critical public infrastructure projects if alternative funding or better project execution strategies are not swiftly implemented. Projects in the energy, water, and transport sectors—many of which are crucial to job creation and economic stability—are at immediate risk.

A recurring challenge in Nigeria’s public sector is weak project implementation capacity. According to PMI’s data, inefficiencies such as cost overruns and delays account for nearly 10% of investment losses in infrastructure projects across Africa. In Nigeria, these issues are exacerbated by institutional weaknesses, bureaucratic delays, insufficient technical expertise, and high staff turnover.



Asamani urged the Nigerian government to view project execution as a strategic economic priority. “Infrastructure development must be treated as a technical profession, not just a budgetary line item,” he said.

He advised increased investment in building project management capacity within ministries and agencies, including hiring certified project managers and implementing modern monitoring tools.

“Professionalising the project delivery process will not only reduce wastage but will also improve public trust, attract investors, and stimulate job creation,” Asamani added.


The looming funding gap highlights the necessity for Nigeria to diversify its financing sources. Experts suggest ramping up public-private partnerships (PPPs), optimizing internally generated revenue (IGR), and tapping into diaspora financing initiatives.

Development analysts have also called for a comprehensive audit of Nigeria’s development projects, ensuring that limited resources are directed toward high-impact, high-priority initiatives. In the face of global economic shifts, strategic planning and execution excellence are more vital than ever.


While the U.S. aid cut poses a substantial threat, it also presents an opportunity for Nigeria to build a more resilient and efficient project management ecosystem. The shift may force governments to adopt leaner, more transparent, and result-oriented practices—a transformation that experts argue is long overdue.

As the global financial climate evolves, Nigeria’s ability to adapt through improved governance, institutional reform, and skilled manpower may determine its future development trajectory.

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