The US government has begun issuing notices terminating contracts and grants to programmes it funds through non-governmental organisations (NGOs) in Kenya, marking an escalation from an earlier directive by President Donald Trump freezing billions of dollars in overseas aid support for 90 days.
The United States Agency for International Development (USAid) on Wednesday sent termination notices to several top NGOs it funds in Kenya—sparking chaos of job losses and potential lawsuits by service providers, landlords, and contractors who had been tapped by the organisations.
“It is true the termination notices have started coming through. We didn’t expect things to escalate that much and we had hoped that the US aid engagements would be restored after the 90-day review as earlier stated,” a source familiar with the matter told the Business Daily.
A notice sent to an official of a USAid-funded programme in Kenya read: “Your award has been reviewed for programmatic efficiency and consistency with United States foreign policy.”
The notices declare cancellation of contracts and grants — dashing the hopes of hundreds of workers and contractors who had expected to resume engagements with the aid agency once the review window declared by President Trump lapsed.
Sources said several top USAid-funded NGOs in Kenya with programmes on healthcare, education, agriculture, and humanitarian support have already received termination notices, with more expected in the coming days.
Termination notices
Insiders said that the termination notices have also been served on the Kenya Primary Literacy Programme (KPLP), which is a five-year USAid-funded initiative that supports the Ministry of Education to expand innovations on language and literacy needs in primary schools.
The $79 million (Sh10.2 billion) programme was only in its first year of implementation having started in March 2024. The programme had been scheduled to run until September 2028.
Hours after Mr Trump took office for a second term as US President on January 20, he signed a flurry of executive orders that are set to define his new administration.
Key among the directives was a 90-day pause in foreign development assistance through the giant USAid pending assessments of efficiencies and consistency with his foreign policy.
Mr Trump has since escalated his purge on USAid programmes and now plans to scrap the agency altogether.
The Inspector-General of the USAid, Paul Martin, was sacked on Tuesday this week, a day after his office released a report critical of the Trump administration’s efforts to dismantle the agency.
A coalition of NGOs has already sued President Trump’s government in the US, arguing that the foreign aid freeze is an unconstitutional overreach of executive power.
The terminations are expected to trigger lawsuits in Kenya where many contractors operate on a reimbursement model whereby they implement programmes on behalf of NGOs directly funded by USAid and later claim their money.
Legal experts have also cautioned that the anticipated mass job losses would present a legal minefield for NGOs affected by the terminated USAid grants and contracts.
“The Kenyan Employment Act applies to all employment contracts performed in Kenya irrespective of the nationality of the employee. It would, therefore, be a mistake for an employer to terminate such contracts ‘at will’ without complying with due process as prescribed under Kenyan law,” William Maema, a senior partner at law firm Iseme, Kamau, and Maema Advocates, wrote in a commentary published in the Tuesday edition of the Business Daily.
“Kenyan law on redundancy is not the most elegantly drafted piece of legislation and has, unsurprisingly, spawned a large body of conflicting judicial interpretations. Utmost caution is, therefore, required in implementing the stop-work orders. NGOs that flout the prescribed process risk claims of unfair termination for which they could be held liable to damages of up to 12 months’ salary.”
The lawyer cautioned that the termination of commercial contracts such as leases due to the USAid-linked chaos could also prove problematic.
“Like all corporates, NGOs enter all manner of commercial contracts with third parties which cannot be terminated unilaterally without risking liability for breach. The abrupt work stoppage has forced affected NGOs to unilaterally terminate contracts or simply walk away from their obligations, citing the Trump orders as an Act of God. Unless the courts agree that the Trump orders constitute frustration or force majeure, such NGOs could potentially be staring at hefty damages for breach of contract,” Mr Maema said.
The disruption of USAid-supported programmes has already spooked the Ministry of Health, which has requested Sh4 billion in emergency funding to support Kenya's frontline health workers, including clinical services, community support, and programme management, who provide HIV treatment and support services amid uncertainty in donor funding.
Financial constraints
The ministry said this funding would ensure uninterrupted services as thousands of health workers risk losing their jobs due to financial constraints while donor funding becomes uncertain.
Kenya currently has about 41,500 health workers providing HIV care in all 47 counties, of which about 9,500 are supported by US government grants.
Harry Kimtai, the Principal Secretary for Medical Services, noted in a brief that data available to county governments through the Council of Governors showed that a total of 9,501 frontline workers were supported at a cost of Sh380,618,320 annually under the US government grants.
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