Nicole Uzile Sibanda reflects on her senior year research examining the impact of foreign health aid in Sub-Saharan Africa. She explored how programs like PEPFAR shape health and development outcomes and what policymakers must do to build sustainable health systems across the region.
Every year, billions of dollars flow into Sub-Saharan Africa (SSA) in the form of foreign health aid. Yet, the region still bears 67% of the world’s HIV/AIDS burden and 94% of global malaria cases, while also recording some of the lowest Human Capital Index scores in the world. This persistent disparity raises a critical question: if health aid is increasing, why are development outcomes not improving proportionately?
PEPFAR Programs
In 2003, U.S. President George W. Bush launched what would become the largest single-nation commitment to combating a chronic disease in history: the U.S. President’s Emergency Plan for AIDS Relief, better known as PEPFAR. Since its inception, PEPFAR has channeled over US$110 billion into the global HIV response, with the vast majority of those resources directed toward 29 countries in SSA.
The program has been remarkably impactful. It has expanded antiretroviral therapy across an entire region, strengthened healthcare infrastructure, and helped shift the trajectory of a disease that was devastating communities, families, and economies. Studies have shown that PEPFAR has saved millions of lives and dramatically reduced HIV-related deaths across SSA. By any measure, it represents one of the most ambitious and consequential public health interventions ever undertaken.
But as PEPFAR faces political uncertainty, including the 2025 funding suspension that modeling studies suggest could reverse decades of HIV progress and cause tens of thousands of deaths by 2030, it is more important than ever to ask where exactly this aid has worked best and why.
The Empirical Story
My thesis examined PEPFAR’s impact across the 29 participating SSA countries from 2004 to 2024, focusing on three primary outcomes: life expectancy, HIV incidence, and labor force participation.
PEPFAR was found to improve life expectancy and reduce HIV incidence but showed no significant impact on labor force participation. PEPFAR funding was associated with increased life expectancy and reductions in HIV transmission rates. Given the scale of the HIV epidemic and the constraints facing health systems in the region, these outcomes represent a significant public health achievement.
However, despite improvements in population health, there was no evidence that PEPFAR funding was associated with increases in labor force participation. In other words, while individuals are living longer and healthier lives, these gains do not necessarily translate into greater economic engagement. This finding highlights the need for policymakers to complement health aid programs with labor market strategies, as health aid alone may not be sufficient to drive development.
The most important finding in this research is the heterogeneity of PEPFAR’s effects across participating countries. Context matters significantly.
PEPFAR funding was found to produce significantly greater improvements in life expectancy in countries with above-average urbanization rates. Countries such as Eswatini, South Africa, Zimbabwe, and Botswana derive greater gains from each dollar of PEPFAR funding than countries such as Burundi and Uganda, largely because of differences in urbanization and healthcare infrastructure. This finding challenges the one-size-fits-all approach to aid distribution, where funding is allocated primarily based on disease burden without considering whether the infrastructure exists to convert that funding into meaningful health gains. These findings underscore the urgent need for policymakers to invest in healthcare infrastructure, as it is essential for foreign health aid to reach its full potential.
Policy Implications
The implications of this research are practical and immediate. The evidence strongly supports the continuation of targeted HIV/AIDS funding. PEPFAR has demonstrably improved health outcomes and remains a critical component of the global HIV response. Any reduction in funding risks reversing decades of progress and generating substantial human and economic costs.
Second, aid effectiveness is contingent on context. Rather than adopting a uniform allocation strategy, there is a need for greater investment in foundational health infrastructure in lower-capacity settings. Without adequate systems in place, even well-funded interventions face diminishing returns.
Third, health interventions alone are insufficient to generate broad-based economic transformation. While improved health outcomes are essential, translating these gains into economic participation requires complementary investments in labor market opportunities.
Finally, it is important for SSA countries to prioritize domestic resource mobilization. Despite international commitments such as the Abuja Declaration, many Sub-Saharan African countries continue to allocate less than 10% of their national budgets to health. This persistent reliance on external financing exposes health systems to significant vulnerability when donor priorities shift.
The Stakes Could Not Be Higher
Sub-Saharan Africa is projected to become the most populous region in the world by 2050. The young people growing up across the region represent an extraordinary opportunity for Africa and for humanity. However, that opportunity depends on whether they are healthy, economically active, and equipped to contribute meaningfully to society.
Foreign health aid, particularly through PEPFAR, has been one of the most powerful tools available to help achieve this outcome. But these tools are only as effective as the conditions in which they are deployed.
My research offers one clear message: the question is no longer simply whether aid works, but where, how, and under what conditions it works best. Getting that right—and building the infrastructure and domestic systems needed to sustain health gains—is one of the most important policy challenges facing Sub-Saharan Africa today.
