The recent United States Agency for International Development (USAID) and the President’s Emergency Plan for AIDS Relief (PEPFAR) cuts in aid have prompted inquiries about their impact on our organisation and community. We were not receiving direct funding from USAID or PEPFAR when these cuts were implemented, and our health operations and services remain fully active and uninterrupted.
Bulungula Incubator has, however, previously received PEPFAR funding, which supported our health programme from 2016 to 2018 and again in 2023. This funding strengthened our Health Point and community health worker teams, significantly improving HIV testing, counselling, and medication delivery in our community. Because of these efforts, we have developed a highly effective HIV/AIDS programme in our community, and today, we are proud to share that everyone who knows their HIV status is on treatment, with zero treatment defaulters.
It is also important to address recent public narratives questioning the integrity of PEPFAR and USAID funding—narratives that have contributed to the justification of recent aid cuts and created a misleading impression of these programmes and the organisations they support. As a nonprofit that has worked with a wide range of funders, our experience with PEPFAR has reflected one of the most rigorous and accountable funding relationships we have encountered. Their requirements include comprehensive proposal processes and succession planning requirements, stringent monitoring and evaluation standards, regular site visits, and consistent oversight. From our experience, PEPFAR has demonstrated the highest level of integrity.
Although USAID and PEPFAR do not directly fund us, these agencies play a major role in South Africa’s public health sector. PEPFAR alone contributes nearly 20% to South Africa’s $2.3 billion annual HIV/AIDS response, supporting life-saving antiretroviral treatment for approximately 5.5 million people. This integration makes it difficult to predict the full extent of the impact of the recent cuts, particularly on smaller organisations and service providers. Read in-depth here about how much the South African HIV response depends on US funding.
Our Health Programme is primarily funded (~70%) by the Eastern Cape Department of Health, which has historically received USAID and PEPFAR support. Following the funding reductions, our expected three-year contract renewal with the Department is uncertain. This uncertainty presents a risk to the long-term sustainability of our health services.
A more immediate consequence for our region has been the indefinite suspension of a long-planned rural health clinic. Our traditional leadership and community members have worked for over 15 years to make this clinic a reality. Construction, scheduled to begin in April, was to be jointly funded by the US Africa Command’s Overseas Humanitarian, Disaster and Civic Aid programme and the Eastern Cape Department of Health. The clinic was set to improve healthcare access for multiple administrative areas, serving thousands of rural residents. Its cancellation represents a significant setback for public health infrastructure in our region and undermines efforts toward sustainable, government-led service provision in our community. Read more from Daily Maverick.
Beyond these impacts, we are concerned about broader systemic effects that might take time to set in fully:
- Medication procurement and stockouts: USAID has historically supported personnel involved in the procurement and distribution of medications across South Africa. The reduction in funding raises concerns about potential increases in stockouts of essential medications—including HIV and TB treatments, chronic illness medication, and contraceptives.
- Ripple effects across sectors: Donor shifts toward emergency healthcare funding may reduce available support for other essential sectors, such as education, youth development, and livelihoods. We observed this during the COVID-19 pandemic, and similar patterns are now emerging. While healthcare should be a critical priority now in light of the cuts, reduced funding in other sectors could compromise long-term community development efforts that contribute to better health outcomes.
As a nonprofit organisation with a diverse base of funders, we are fortunate to be able to respond to emerging challenges. However, many other programmes and communities may not have this flexibility. The predicted broader national consequences of the funding cuts are substantial. A recent study published by the University of Cape Town, co-authored by Professor Linda-Gail Bekker, estimated that without an effective transition plan, the withdrawal of PEPFAR support could lead to more than 600,000 additional HIV-related deaths and 500,000 new infections in South Africa over the next decade.
While our operations are carrying on as normal for now, we acknowledge that we are in a period of uncertainty. Like many others in the development sector, we are monitoring the situation closely, assessing the impacts as they unfold, and adapting where possible.