US suspends aid programs in Nepal for 90 days following Trump’s executive order

KATHMANDU: The United States has temporarily suspended all aid programs operating in Nepal under USAID for 90 days following an executive order by President Donald Trump.

The directive aims to reassess the effectiveness of foreign aid programs globally.

USAID notified Nepal’s Ministry of Finance, NGOs, and non-profit organizations through official correspondence on Saturday.

Addressed to Dhani Ram Sharma, chief of the International Economic Cooperation Coordination Division, the letter stated that health, education, agriculture, and inclusive policy programs funded by U.S. grants are on hold effective immediately.

Under a five-year strategic partnership, Nepal was set to receive aid worth Rs 79.71 billion. While current programs face a temporary halt, USAID assured stakeholders of the possibility of resuming grants in the future.

According to the U.S. State Department, the suspension period will allow a comprehensive review of aid program efficiency.

However, the Millennium Challenge Corporation (MCC) projects recently implemented in Nepal are reportedly unaffected by the decision.

In the interim, USAID has instructed NGOs and non-profits to refrain from incurring expenses or signing new agreements.

The directive did not address employee salaries, raising concerns among project staff.

More than 300 programs run with USAID support are expected to be directly impacted. Ram Prasad Subedi, president of the NGO Federation of Nepal, expressed optimism that the suspension would not lead to permanent cancellation.

The U.S. decision will likely affect not just Nepal but other developing nations reliant on American aid. However, military assistance to Israel and Egypt, as well as emergency food aid, remain exempt.

Humanitarian crises in regions like Gaza and Sudan are expected to face further challenges due to the suspension.