The US Agency for International Development (USAID) is reportedly being shut down as part of Elon Musk’s plan to shrink the size of the federal government.
The billionaire, who is heading up a review of the government as part of the Department of Government Efficiency (DOGE), said he had spoken with President Donald Trump, who agreed the whole agency should be closed.
“What we have is just a ball of worms,” Mr Musk said, when describing the agency. “You’ve got to basically get rid of the whole thing. It’s beyond repair. We’re shutting it down.”
Mr Trump seemingly confirmed the reports, claiming the agency was being run “by a bunch of radical lunatics” and adding: “We’re getting them out.”
Around 600 employees have reportedly been locked out of USAID’s computer systems overnight, while those still able to access the system received an email saying headquarters would be closed from 3 February.
Here we look at what the USAID is, what it funds and how the decision to shut it down could affect people around the globe.
What is USAID?
The US aid and development agency was established in 1961 to implement the Foreign Assistance Act.
Its aim is to assist countries recovering from disaster, trying to escape poverty and engaging in democratic reforms, according to the US government website.
It oversees humanitarian, development and security programmes in an estimated 120 countries.
More than 10,000 people are employed by the agency, a third of whom work overseas, according to the Congressional Research Service.
Most projects that the agency oversees are implemented through grants, a formal agreement or through contracts.
On Saturday, the website for the agency, USAID.gov, went dark and remained offline throughout the weekend and into Monday.
What does it fund?
The agency is the world’s largest single donor to programmes around the world.
In 2023, the US gave $72bn (£58bn) of assistance on everything from women’s health in conflict zones to access to clean water, HIV and AIDS treatments, energy security and anti-corruption work.
In addition to directly funding programmes, it is also a “back donor” to a series of agencies, Sky News’ international correspondent John Sparks said.
This includes the United Nation’s World Food Programme and the United Nations High Commissioner for Refugees (UNHCR) also known as the UN Refugee Agency, which helps asylum seekers and refugees feeing violence or persecution find a safe place to live.
In 2024, 42% of all humanitarian aid tracked by the United Nations was provided by USAID.
The year before, the top five recipients of USAID-managed funds were Syria, South Sudan, Nigeria, Afghanistan and Yemen.
In recent years, USAID has also provided significant humanitarian development and economic support to Ukraine, after Russia’s invasion in 2022, and to Gaza after tensions between Hamas and Israel escalated in 2023.
USAID was also one of three US government agencies to set up the Trans-Sahara Counterterrorism Partnership (TSCTP) in 2005.
This helps to assist countries in West and North Africa tackle terrorist threats and prevent the spread of violent extremism.
They do this by equipping security forces but also supporting youth employment, strengthening local governance and improving health and education services in the most vulnerable regions.
What effect could the shut-down have?
The widespread nature of the agency means that shutting it down would be “absolutely massive,” John Sparks says.
“Countries like the EU and UK need to be concerned because if you aren’t funding aid programmes in places like refugee camps, the people who live in those camps will start to move,” Sparks explains.
“And that is why this is such a big deal.
“We are talking about tens of millions of people being looked after by the UNHCR, for example.”
The effects of Mr Trump’s presidency are already being felt around the world after he ordered a global freeze on most US foreign aid as part of his “America First” policy.
According to The New York Times last week, the Trump administration’s freeze on aid has halted the work done by the group that provides internal security at Syria’s Al Hol camp, which houses some 39,000 ISIS members.
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The policy puts at risk programmes that support field hospitals in Thai refugee camps, landmine clearance in war zones, and drugs to treat millions suffering from diseases such as HIV.
More than 1,000 USAID employees and contractors have already been fired or furloughed and, over the weekend, two top security chiefs at USAID were placed on leave after they refused to turn over classified material in restricted areas to Mr Musk’s government-inspection teams, a current and a former US official told The Associated Press.
“No one feels safe to go anywhere near the Ronald Reagan Building,” where USAID is headquartered, a USAID official told Sky News’ US partner network NBC News.
Security guards ‘threatened’
Critics of the Trump administration have argued that the cuts under the banner of “America First” ultimately benefit US adversaries.
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In a letter, Democratic members of the Senate Committee on Foreign Relations wrote to secretary of state Marco Rubio on Sunday, alleging that people working for DOGE were able to access classified spaces within the USAID headquarters.
They said security guards were “threatened” when they asked questions, and senior management were placed on administrative leave.
