US cuts off $51 million in startup funding for Kenyan and Nigerian SMEs

The US is quietly pulling the plug on $51 million in funding that once kept the lights on for African SMEs and startups. The US Africa Development Foundation (USADF), which has backed over 1,000 businesses across 22 African countries, just got its budget slashed by the Department of Government Efficiency (DOGE)—the agency reportedly led by Elon Musk under Trump’s second term.

Kenya and Nigeria, two of the biggest beneficiaries of the programme, are set to lose out on critical funding for grassroots projects. That includes $84K earmarked for a wellness incubator in Nigeria and $48K for a WhatsApp chatbot in Kenya. In total, 211 businesses in Nigeria and 186 in Kenya had received USADF grants, most of them women-led or operating in early-stage and rural markets.

Why does this matter? USADF offers non-dilutive capital, cash that startups don’t have to give equity for. It’s also one of the few programs that bypasses governments and sends funds directly to founders. In regions where local banks shy away from high-risk businesses, this kind of funding is more than helpful; it’s often make-or-break.

This isn’t a one-off cut, either. USAID has already pulled over $100 million in startup support earlier this year, affecting more than 30 Kenyan startups alone.

Zoom Out: These cuts are part of a broader shift in US policy and a sobering wake-up call for the continent’s startup scene. If your business model is built on grants from Washington, you’re vulnerable to political whiplash. This might be the moment to start talking about funding self-reliance and long-term capital strategies.