Is entrepreneurship support going to die?

GrowthAfrica team- Entrepreneurship support

With recent geopolitical changes and the near-collapse of USAID, the world’s largest aid agency, the development sector is bracing for massive shifts. The entrepreneurship support ecosystem, especially in the global south, is likely to feel the impact even more acutely.

The rise and abrupt pause in entrepreneurial support

Over the past few years, there was growing momentum in supporting local entrepreneurship and private sector development across the global south. However, this trend appears to be heading for a sudden halt.

As the US and several European nations divert their focus to domestic priorities, global aid for entrepreneurship is diminishing. This doesn’t spell the end of such programmes entirely, but it does signal a sharp reduction in funding and attention.

What’s driving the change in aid priorities?

Donor priorities are shifting toward immediate global crises—disaster response, border control, and immigration management. This redirection is likely to drain funds from local innovation, startup ecosystems, and small entrepreneurs unless these initiatives align with the urgent interests of donor countries.

Key areas likely to retain support:

Climate adaptation and mitigation (especially to curb climate-related migration)
Food security and local supply chain development
Employment-intensive sectors like farming and manufacturing

These sectors offer clear links to reducing migration pressures and may still attract donor interest.

The “trade, not aid” era begins

With tighter budgets, the development mantra is shifting towards “trade, not aid.” Entrepreneurs in the global south will need to:

Create measurable value early on
Operate competitively and profitably
Integrate capital solutions with skill-building initiatives

Only support programmes that blend early-stage investment with capacity-building will survive. Organisations that fail to adapt may struggle or vanish.

Philanthropy vs. profitability

Programmes centered on social entrepreneurship or job creation without clear paths to financial sustainability will face steep funding challenges. Philanthropy will play a role, but it will not fill the gap left by traditional aid and investment sources.

Moreover, even investments in Africa and other parts of the global south will likely become more risk-averse. Much of the capital will shift toward domestic defense budgets in donor nations.

Will China fill the void?

China may step in to fill parts of the aid and investment vacuum. However, their approach and underlying agendas may differ significantly from current development models. This could present alignment challenges for organisations accustomed to Western development frameworks.