Beyond PEPFAR: How America’s Aid Retreat Is Reshaping Global Health Governance

For over two decades, The President's Emergency Plan for AIDS Relief (PEPFAR) stood as the clearest example of what concentrated donor power could do: one country's political will, translated into billions of dollars a year, credited with saving more lives than any single global health program in history. That era is now ending, not through a managed transition but through an abrupt, largely unplanned withdrawal that began within days of the second Trump administration taking office in January 2025. The story that follows is not simply about cuts to HIV/AIDS funding, but it is about what happens when the architecture of global health financing loses its dominant pillar, who scrambles to fill the resulting vacuum, whether the countries left exposed can build the fiscal and institutional capacity to stand on their own, and whether the system that emerges is more fragile or more resilient than the one it replaces. The transition is already producing real costs: closed clinics, disrupted treatment, and rising infections in countries that had spent years bringing their epidemics under control. Besides, it is also accelerating financing reforms, regional cooperation, and domestic manufacturing that donor dependence had, for twenty years, made largely unnecessary. Both of these things are true at once, and this analysis traces both.

The President’s Emergency Plan for AIDS Relief was signed into law in 2003 under President George W. Bush, and over two decades it became the largest commitment any single nation has made to fighting one disease. Nevertheless, by the end of 2024, PEPFAR was credited with having saved more than 25 million lives, supporting treatment for 21 million people, and preventing 7.8 million babies from being born with HIV, while operating in more than 50 countries.  Its reach went beyond viral suppression: independent research has tied PEPFAR funding to broader “spillover” effects, including lower all-cause mortality, higher childhood immunization rates, faster GDP growth, and improved school retention in recipient countries.

That scale bred dependence, across dozens of low- and middle-income countries, health ministries built testing regimes, supply chains, and community health workforces around the assumption of steady American financing, administered first through USAID and later coordinated through the State Department’s Bureau of Global Health Security and Diplomacy. The result was a global health governance model with an unusually concentrated point of failure: one donor government, subject to one country’s domestic politics, effectively underwrote the HIV response for a large share of the world’s high-burden states.

That model began unravelling within days of the second Trump administration taking office. On January 20, 2025, an executive order froze foreign aid for ninety days; a State Department directive four days later halted new funding for most foreign assistance programs, PEPFAR included, and took its systems offline. A waiver for essential medicines followed within the week, but by February only about half of PEPFAR’s programs were estimated to have resumed operations, and USAID itself, the implementing agency for most PEPFAR awards had effectively collapsed by April after mass layoffs and the seizure of its finance systems. Although, this was not a routine budget trim, it was the sudden, largely unplanned withdrawal of the model’s central pillar and it raises the question that now shapes the rest of the global health landscape: what happens to a system built around a dominant donor when that donor retreats?

If PEPFAR’s collapse answered the question of what a dominant-donor system looks like when its pillar is removed, the next question is what actually happens on the ground when that removal takes effect.

The damage arrived fast and cut across the whole system. More than 1,700 clinics and drop-in centers have closed and over 16,000 health workers lost their jobs, according to an amfAR survey of 166 organizations across 46 countries. HIV prevention spending fell 51 percent between fiscal years 2024 and 2025, testing dropped 22 percent globally, and new infections are rising in previously stabilized countries like Zambia. Laboratories, supply chains, and the community outreach networks that reached sex workers and other high-risk groups were hit hardest and are the least likely to be rebuilt. PEPFAR-supported systems also contributed to laboratories, supply chains, healthcare workers and community outreach. So, the withdrawal potentially affects health-system resilience more broadly, not just HIV treatment.

That leaves an obvious question: if Washington is stepping back, who steps in? European bilateral donors, EU institutions, and UN agencies are the likeliest first movers, but none match USAID’s former scale, and China’s own capacity is constrained by a slowing economy and domestic debt troubles.

Where a vacuum has opened, geopolitics has moved fastest. In South Africa, where PEPFAR is being wound down amid a political dispute with Washington, analysts point to China and Russia as the clearest beneficiaries — using health diplomacy to buy influence Washington is deliberately vacating This is the real shift: American withdrawal isn’t just leaving a hole in a budget. It’s opening a contest over who gets credit, access, and leverage for whatever replaces it.

China and Russia’s health-diplomacy gains aren’t just theoretical. As U.S. HIV funding for South Africa wound down in 2025, China moved in with a two-year, $3.49 million support package — small in dollar terms, but timed and deliberate. It mirrors their COVID-era playbook: China gave free vaccines to 69 countries, Russia sold Sputnik V across Africa and Latin America, and recipients often reciprocated diplomatically rather than financially, Algeria took free Chinese doses while publicly backing Beijing on Hong Kong and Xinjiang. Health aid rarely pays off as a line item; it pays off later, in UN votes and political loyalty.

However, the more consequential question is no longer who replaces American money, it’s whether the countries that relied on it can build systems that need less of it going forward. Africa CDC has put numbers on the urgency: external health aid to the continent was projected to drop 70 percent between 2021 and 2025, at the same time disease outbreaks rose 41 percent. The institution’s response has been a phased financing strategy, updated national health-financing plans in 30 countries so far, pilots of solidarity levies on flights, alcohol, and mobile services, and a look at whether the roughly $95 billion African diaspora members send home each year could be steered, even partly, toward health budgets. The goal is 20 countries funding at least half their own health spending by 2030.

That target is ambitious given where most countries are starting from. African Union states pledged back in 2001, under the Abuja Declaration, to put at least 15 percent of national budgets toward health. Twenty-plus years later, Rwanda, Botswana, and Cabo Verde are the only ones that have kept that promise consistently, while more than 30 member states still sit below 10 percent.  The real constraint sits underneath that number, in tax collection, most low-income African governments simply take in a smaller share of GDP in revenue than middle-income peers do, so there’s a hard ceiling on what health ministries can claim even when the political will is there. A few governments are experimenting with social health insurance to work around that, pooling contributions from formal-sector workers to help cover everyone else, but outside a handful of countries, enrollment is still small.

Adding to that, the local pharmaceutical manufacturing also following the same pattern: real movement, but from a long way back. Africa still imports around 80 percent of its medicines. Nigeria’s Codix Bio, now producing HIV and malaria test kits domestically, is one of the clearer signs of change, and it’s being talked about openly as a way to plug the hole the U.S. cuts left. As, Aid dependence isn’t only financial. It is also dependence on foreign pharmaceutical production, technology, supply chains and procurement systems. On the diplomatic side, African Union leaders signed the Accra Declaration in 2025 committing to less reliance on imported drugs and outside funding, and health ministries are now courting Gulf, European, and multilateral money at the same time rather than waiting for one donor to step into America’s place.

It would be too easy to read all this as countries simply choosing independence. Aid withdrawal is forcing new financing tools and new manufacturing capacity into existence, that much is real. But having more responsibility for your own health system and having the capacity to carry it are two different things, and the countries with the thinnest fiscal cushions are the same ones for whom this loss is hardest to absorb — because they have the fewest domestic levers to begin with. The retreat is pushing health sovereignty forward in some places. In others, it’s just showing who was never going to be able to afford it.

That divide, between countries building real capacity and countries simply absorbing a loss, is what determines which of two futures global health governance is now heading toward.

Two scenarios are visible from where the system stands right now, and neither one is locked in yet.

The first scenario is fragmentation, as the early data leans this way more than anyone would like. Funding gaps are already translating into weaker programs, the clinic closures and workforce losses already detailed above. Weaker programs mean higher disease burden, which is already showing up as rising new HIV infections in countries like Zambia that had been on a downward trend for years. And the burden isn’t landing evenly, it’s concentrating in the countries with the least fiscal room to absorb it, which is its own kind of inequality. South Africa is the clearest preview of where this goes if it keeps going: PEPFAR wound down amid a political dispute, and China and Russia are the ones stepping into the resulting vacuum, using health diplomacy to buy the kind of access and goodwill Washington used to hold by default.  That’s not really a funding story at that point, its health assistance becoming another arena for great-power competition, and global health governance splintering into whoever’s bilateral relationship with whom happens to be strongest that year.

The second scenario is adaptation, and it’s not hypothetical either, it’s happening in parallel with the first. Diversified partnerships are forming as countries court European, Gulf, and multilateral donors simultaneously instead of waiting for a single replacement for the U.S. Domestic financing is moving too, even if slowly: Africa CDC’s push to get 20 countries funding half their own health budgets by 2030, the solidarity levies, the Abuja Declaration targets a handful of countries are finally hitting. Regional cooperation has a real anchor in the 2025 Accra Declaration, and local manufacturing, test kits out of Nigeria, the continent-wide push toward 60 percent local vaccine production by 2040 — is the kind of capacity that, once built, doesn’t depend on any donor’s budget cycle again. If this is the dominant thread, the shock that PEPFAR’s retreat caused ends up being the thing that forced a donor-dependent system to finally become something sturdier.

What the last year and a half of data actually shows is both trajectories running at once, in different countries, sometimes in the same country at different moments. Which one wins out probably has less to do with what Washington decides next and more to do with whether governments that now have the political will for health sovereignty also have the fiscal space to pay for it. So, the question worth sitting with isn’t whether America’s retreat is good or bad for global health, it’s simpler than that: is this the moment the system got weaker, or the moment it stopped depending on one country to hold it together?

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