The Data Crisis Following USAID’s Withdrawal: Opportunities to Reimagine Data Systems

The immediate effects of cuts to USAID are becoming clearer, with the US largely absent from the international response to the Ebola outbreak in Uganda, the devastating earthquake in Myanmar, and the humanitarian crisis in Sudan. While the direct impacts of these cuts are making headlines, there is also a less visible, systemic consequence that could undermine development and humanitarian efforts long into the future: the destabilization of the data ecosystems that underpin global health, education, nutrition, agriculture, water, and sanitation services.

For decades, USAID and other US government funding have supported data used around the world. This includes routine survey data collection through programs like the Demographic and Health Survey (DHS), which operated in more than 90 countries to understand local and global trends, sophisticated satellite-based early warning systems for famine and disease outbreaks, and perhaps most critically, support to core administrative data systems used by government ministries to plan, budget, and target services. As country governments and their international development and philanthropic partners plan for a new development landscape, they will need to quickly identify and effectively fill these alarming gaps.

Beyond the immediate impacts of cuts on data for service delivery, budget planning, policymaking, and emergency surveillance, the abrupt termination of USAID funding is also putting at risk a promising trend toward the modernization of data systems as countries look ahead to digital transformation, digital public infrastructure, and AI readiness.

The twin crises of data and digital systems 

Digital and AI technologies offer huge potential for increasing efficiency at a moment when country leaders must achieve more with fewer resources. The ability to better deliver public services through digital and AI technology depends on the successful collection, sharing, and management of data across and beyond government. Without investment in country data systems, there will be limited data to power AI solutions and drive the longer-term digital transformation of public services. 

The immediate effects of the funding freeze (and subsequent terminations of programs) on the digital systems underpinning key service delivery are starkly demonstrated in Kenya. A March 28th, 2025 letter from civil society and community representatives to the Office of the Data Protection Commissioner (ODPC) states:

Kenya’s EMR system went dark following the Stop Work Orders because, although the system is managed by the Kenyan government, it was physically hosted by a server operated by a USAID-funded implementing partner. 

This presents a real risk to the progress made in the digital transformation of Kenya’s health care system, threatening the ability of healthcare workers to deliver life-saving care. Our partners have informally highlighted similar risks playing out in countries across the region, including agricultural data systems in Ethiopia, health systems in Ghana, and critical health commodity supply chain systems in Tanzania. 

These twin crises – a halt to data collection and the undermining of digital systems – reveal existing inefficiencies and instabilities in how data is collected, managed, and shared both within and between countries. This moment also provides an opportunity to reimagine some long-standing problems in how governments and donors think about data and digital investments. There is a chance now to strengthen country ownership and investment in data systems, to reduce fragmentation, and to create more sustainable data systems. And as digital innovations like AI make data even more influential than before, it stands to transform public services and optimize – or even revolutionize – their delivery.

Reshaping digital and data policy for the long term

The seemingly quiet collapse of data systems is alarming and poses major short-term and longer-term challenges. It also reinforces the downsides to the previous donor-funded approach to data, which often led to fragmented sets of data systems, each for its own purpose. There has been insufficient attention to interoperability or an overall comprehensive and efficient architecture, and no clear sustainability model beyond additional donor-funded projects.  As countries respond to the new development funding reality, we anticipate governments will be forced to adapt in ways that reshape digital policy, financing, and implementation. This adaptation offers the opportunity to reimagine data ecosystems that are owned by local actors, sustainably financed, and poised to unlock new opportunities for transformation:

1. Now is the time to increase emphasis on data sovereignty, data localization, and data protection, including close attention to where systems are hosted and how their availability is funded and guaranteed. Decisions that lead to “good” digital public infrastructure that prioritizes “future-proofing” are notoriously difficult, as described in Chapter 4 of DG’s “Demystifying Interoperability” publication. However, these decisions, particularly in times of resource scarcity and crises, can be made by prioritizing political consensus around sustainable digital systems and “good” practices.
2. Sustainable data systems will require more domestic resources and investment in data. The abrupt halt of USAID funding for data systems underscores that aid-funded models are not fully sustainable. But scarce domestic funding and other priorities have blocked the pathway to full country ownership.  Initiatives like the UN/World Bank ‘Power of Data’ coalition are bringing together donors, multilaterals, and governments at the national level to strengthen political support, agree on priorities, and commit to funding data systems in line with national growth and development strategies.  
3. New investors and funders can maximize returns by funding systems and reducing fragmentation. The current crisis reveals how the fragmentation of data systems has weakened their resilience, as a lack of interoperability and failure to properly integrate digital and data systems have created missed chances to innovate and modernize. Funding that focuses on strengthening the whole system to support innovation can accelerate the adoption of new approaches and support private sector innovation.

The role of development partners

Beyond the immediate need for resources to support continuity of core systems like Kenya’s EMR, the fallout from the termination of USAID funding demonstrates the need for a new strategic approach to partnership. These partnerships need to be grounded in country ownership, in turn requiring governments to prioritize, resource, and maintain critical digital and data systems, and requiring development partners to ensure they align their contributions with these priorities.

Digital transformation frameworks and roadmaps used to guide donor investments must be pragmatic and focused on the implementation and integration of core digital and data systems, both new and legacy systems. 

Philanthropic and development partners need to make a concerted effort to support the rapid creation of country digital and data strategies for transition to true local ownership that emphasize: 

• Domestic resource mobilization

• Data governance and interoperability of core systems

• Technology strategies that streamline the plethora of existing digital and data systems to align with the national strategy

• System ownership, sustainability, and localization. 

How these elements are implemented also requires intentionality. Data systems can and should be financed through diversified models that blend public, private, and philanthropic investments. Diversified funding mechanisms are possible, but the philanthropic and development community beyond the US Government needs to be strategic in their actions and partnership structures in how they act as a partner to support countries in making these transitions. Aid and philanthropy play an important role in de-risking investments in data, allowing for multiple building blocks of funding to deliver an intentional ecosystem approach to funding data systems.

With a country-owned strategy in place that strictly prioritizes the function, data sharing, and use of core systems, governments can direct traffic and create new funding models for data, as new partners can pay for aspects of the system that match their needs. We saw this take shape in our VIFAA program, where private sector stakeholders in Nigeria co-invested $120k to ensure state-disaggregated data on fertilizer availability and use. The private sector should not be expected to fund everything (and often cannot, due to antitrust laws), but it is an under-utilized source of both funding and innovation in government digital transformations.

The way forward 

In the immediate term, supporting the critical services whose delivery was disrupted by the US withdrawal must be the development community’s priority. However, the medium- to long-term implications of data system failures extend beyond immediate disruptions; they threaten progress toward equitable, effective, data-driven delivery and readiness for future innovation.

As we assess what should be preserved in the wake of mass funding cuts, there is a clear role for pragmatic investments in digital public infrastructure built on core data systems, but this time with countries in the lead and stronger coordination and alignment among development partners.