Instead of celebrating its 80th birthday, there is a serious chance that the UN headquarters will have to declare a form of institutional bankruptcy at its General Assembly in September. The unprecedented cashflow crisis caused by funding cuts means the budgetary shortfalls are so serious that many of the system’s operations and offices will have to be shuttered or merged into each other.

This funding crisis comes as the international system, riven by geopolitical and economic rivalries, risks splitting at the seams, unable to reach a working consensus on any of the key economic, security and environmental threats. UN Secretary-General António Guterres appointed a Task Force in March to propose radical reforms as the UN marks its 80th anniversary. Its goal is to map out a plan for a smaller UN to do less, more efficiently, and in lower cost locations: less New York, more Nairobi.

The UN80 Initiative, led by Under-Secretary-General for Policy Guy Ryder, a Briton and former director-general of the International Labour Organization, has delivered plans to streamline a sprawling bureaucracy. UN top brass wanted to keep a lid on the proposals but a six-page document setting out its main ideas and the rationale behind them was leaked within weeks. On the menu for the high-level panel from UN offices in New York, Geneva and Nairobi are major cuts and consolidating dozens of agencies and programmes into a handful of departments. The reforms would be the UN’s deepest overhaul in decades. The high-level panel have until July to agree on a set of clear budgetary proposals to present to the 194 member states of the UN. These would take centre-stage in the General Assembly debate about the UN’s future in September.

Race to reform

This is the second attempt by Guterres, who talked of a UN 2.0 revamp in 2023 using data and digital technology to improve efficiency. But that was before funding aid and multilateral institutions came under attack, primarily from United States President Donald Trump but also from European governments. Faced with that prospect, Guterres and his team are planning wide-ranging reforms to save cash and restore some US backing.

‘The progressive proliferation of agencies, funds, and programmes has led to a fragmented development system, with overlapping mandates, inefficient use of resources, and inconsistent delivery of services,’ the Task Force notes in a mea culpa memo.

At the core is a plan to consolidate operations into four pillars: Peace and Security, Humanitarian Affairs, Sustainable Development and Human Rights. This entails, for example, combining the World Food Programme (WFP), the UN Relief and Works Agency for Palestine (UNRWA) and the Office for the Coordination of Humanitarian Affairs (OCHA) into one organisation.

UN Climate Change, the secretariat of the UN Framework Convention on Climate Change, could be integrated into the UN Environment Programme (UNEP), while the annual COP summit, which produced the landmark 2015 Paris agreement, ‘should be discontinued’ in its current form. Peacekeeping, counter-narcotics and development agencies may merge into a unified peace and security entity. The Task Force also suggests folding UNAIDS into the World Health Organization (WHO) and combining UN Women and the UN Population Fund (UNFPA).

The aim is to reduce the overall UN headcount by a fifth. The WFP, which received about half its 2024 budget from the US, could lose almost a third of its staff; internal documents show that the UN Children’s Fund (Unicef) is bracing for a 20% budget cut. OCHA has already laid off 2,600 employees, while the UN High Commissioner for Refugees has reported more than 200 recent layoffs with more expected at the end of June.

Reforms were under way before Trump’s election last year but have been given urgency by the latest cuts, including the US suspending contributions to the WHO, which faces a US$2.5 billion shortfall between mid-2025 and December 2027.

Rich western economies, even those who dislike Trump’s America First agenda, support change. Citing budgetary pressures, many of them are sharply cutting UN contributions, both mandated and voluntary. Recent appeals for aid to Yemen, Sudan and the Sahel are badly under-subscribed. It’s a longer-term trend: a 2017 pledging conference which the UN had hoped would raise $8bn to support refugees from South Sudan in Uganda raised only a $358m. More UN members are simply not paying their annual dues. As of 20 April, only 101 of 193 Member States had paid up for 2025, a decrease from 152 in 2024, though most of the remainder are still expected to stump up the cash by the end of the year.

The European Union, a top funder, is ‘steadfastly committed’ to the UN system and will remain a ‘reliable’ partner of the organisation, but it will not cover any of the deficit created by US cuts, according to a European Commission official.

Donor fatigue has resulted in several major UN agencies facing short-term cashflow crises. The WFP has warned that food rations for an estimated 720,000 refugees, most of them based at the Kakuma camp in northern Kenya, will be cut to cover just 28% of them – the lowest level recorded – and cash assistance cut entirely unless new funding is available in June.

On 5 June, Belio Kipsang, Principal Secretary for Immigration and Citizen Services, told the National Assembly in Nairobi that funding from the US and Germany for refugee camps in Kenya has been scrapped. There is a similar story in neighbouring Uganda, which hosts around 1.8m refugees, most of them fleeing war in Congo-Kinshasa and Sudan.

June is the last month for which Uganda will receive money to support refugees, according to General Duties Minister Justine Lumumba. Disaster Preparedness Minister Hilary Onek, meanwhile, has said that $10m per month is needed to provide food and essential supplies to refugees. Without that funding, which President Yoweri Museveni’s government is highly unlikely to cover itself, Onek has warned that Uganda may have to close its borders to refugees.

One significant demand from Ryder’s Task Force is for all secretariat operations in New York and Geneva ‘to identify as many functions as possible that could be relocated to existing lower-cost locations, brought closer to mandate implementation or clients/stakeholders in the field, or otherwise reduced or abolished if they are duplicative or no longer viable’.

One likely beneficiary of this is UNON in Nairobi, a regional hub for diplomats, aid agencies and the UN, including WFP and UNEP. The Kenyan capital has already seen new arrivals take on houses vacated by staffers from the disbanded USAID (Dispatches 28/1/25, Rubio deals hammer blow to US aid).

Rwanda’s government is also looking to capitalise. In a 15 May letter to Guterres from Prime Minister Edouard Ngirente seen by Africa Confidential, Kigali says that it would offer ‘office facilities and essential services, while actively partnering on the development of a long-term UN campus’, urging Guterres to send a ‘technical mission at the earliest opportunity to discuss this proposal further.’ As ever, the Kigali government is moving quickly and strategically: hosting UN organisations generates revenue but also provides some political insulation for governments that face international critics.

Many diplomats in New York tell us that the UN will not exist in its current form in a decade. In what is an expedited schedule by UN standards, the Task Force is due after extensive consultations to produce its final recommendations to the 2026 UN General Assembly, the final one Guterres will preside over.

Some diplomats, particularly those from African states, warn that the Secretary-General’s reforms look more like an elaborate management consultants’ report than a vision of a UN system for the future. Nor is that the proposed UN austerity plan, will be enough to persuade the Trump administration – whose antipathy to the UN is more about ideological opposition to multilateralism than concerns over red tape – to resume its funding of a UN that will claim to be leaner and probably meaner.

Copyright © Africa Confidential 2025
https://www.africa-confidential.com

Read the accompanying piece: The diplomats and bureaucrats answer back

More on United Nations

Vol 66 No 12 • 13th June 2025: Amid the turmoil, some room at the top

Vol 66 No 2 • 13th January 2025: New front opens in global tax war as Trump moves in

Vol 65 No 24 • 22nd November 2024: Cosplay at the COP29 – a climate finance summit without numbers

Vol 65 No 20 • 3rd October 2024: Making multilateralism work by other means

Vol 65 No 18 • 2nd September 2024: After African lobbying, the UN wins battle over tax rules

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