Category: Following The Money
In January 2025, a seismic shift occurred in the global development landscape.1 The sudden 90-day halt of foreign aid by the United States administration—affecting billions in USAID disbursements—did more than just stall health and education programmes; it acted as a brutal “tide going out,” revealing exactly who had been swimming naked.
For years, the phrase “Grantpreneur” has been whispered in the corridors of Abuja and Lagos. These are non-profit leaders who treat development work as a high-stakes corporate venture, running “shadow organisations” that exist only on paper and in polished PowerPoint presentations. When the USAID funding cliff arrived, the veneer of these “Me-Too” projects shattered, exposing a multi-billion Naira web of fraud and operational vacancy.
The Anatomy of a ‘Shadow NGO’
A shadow organisation is defined not by its lack of registration, but by its lack of substance. Based on data from recent USAID Office of Inspector General (OIG) investigations and local audit closeouts, these entities typically follow a predictable, fraudulent blueprint:
| Feature | Legitimate NGO | Shadow NGO (The Grantpreneur) |
| Project Origin | Community-led needs assessment. | “Me-Too” proposals—copy-pasted from successful grants. |
| Sustainability | Multi-stakeholder exit strategy. | Zero plan; the project dies the day the grant ends. |
| Staffing | Dedicated, sector-specific experts. | “Ghost staff” or temporary contractors hired only for audit days. |
| Financial Flow | Transparent, audited direct costs. | Complex sub-contracting to shell companies owned by board members. |
Investigations in early 2025 revealed that as many as 25% of local sub-grantees in certain health sectors had no physical office presence or staff beyond a single “Executive Director” once the monthly USAID tranches ceased. These organisations were effectively “project vehicles” designed to capture a portion of the $600 million (approx. ₦900 Billion at ₦1,500/$1) that the US provides annually for Nigerian health support.
The ‘Me-Too’ Project Trap: Copy-Paste Development
The most common form of fraud exposed was the “Me-Too” project. When a major donor like USAID prioritises a specific niche—such as “Maternal Health in the North-East”—hundreds of shadow NGOs suddenly pivot.
These leaders do not conduct original research. Instead, they scrape successful proposals, change the letterhead, and use “rented” CVs of prominent professors to win bids. According to a 2025 Al Jazeera investigation, this culture of dependency and mismanagement contributes significantly to the $18 Billion (₦27 Trillion) Nigeria loses annually to financial misconduct.
The Zenith Carex Scandal: A Case Study in Inflation
One of the most damning exposures involved Zenith Carex, a subcontractor for the global health giant Chemonics.2 A USAID OIG investigation confirmed that Zenith Carex submitted grossly inflated and fraudulent invoices for distributing health commodities across Nigeria.3 This resulted in a $3.1 Million (approx. ₦4.65 Billion) settlement by Chemonics to resolve False Claims Act allegations.
The fraud wasn’t just about the money; it was about the shadow infrastructure. By inflating costs for “logistics” that were never fully executed, the organisation siphoned off funds meant for life-saving HIV and Malaria kits, leaving rural clinics with “stock-outs” while the grant reports claimed 95% delivery rates.
The Downside: The Human Cost of Abandoned Projects
When the “Big Bet” funding disappeared in early 2025, the lack of sustainability plans became a humanitarian crisis.
- Stranded Beneficiaries: In states like Borno and Adamawa, “shadow” education centres—which claimed to be teaching thousands of out-of-school children—simply locked their doors overnight. Investigations by BudgIT Nigeria suggest there are over 2,000 abandoned donor-funded projects in the last decade, many of which were “ghosted” the moment the final audit was signed.
- Reputational Damage: Legitimate, hard-working Nigerian NGOs are now facing “extreme vetting” and higher insurance premiums, as international donors struggle to distinguish between genuine impact and sophisticated fraud.
“The funding freeze was a tragedy for health outcomes, but a necessary autopsy for the non-profit sector. It showed that ‘localisation’ of aid is a dangerous buzzword if it isn’t backed by forensic accountability.” — Excerpt from a 2025 Civil Society Legislative Advocacy Centre (CISLAC) report.
Following The Money: The Path Forward
To prevent the rise of the next generation of shadow NGOs, the local regulators must implement:
- Forensic Site Visits: Moving beyond “paper audits” to unannounced physical verification of project sites and staff payroll.
- Public Debarment Lists: Following the lead of the USAID OIG, Nigeria must maintain a public “Blacklist” of directors—not just organisations—to prevent them from “phoenixing” under new names.
- Sustainability Scoring: Grants should no longer be awarded based on “intent” but on a documented 5-year post-funding viability plan.
The “Following The Money” series will continue to track these directors as they attempt to pivot toward new funding streams. Accountability doesn’t end when the project does.
USAID funding impacts in Nigeria This video provides an in-depth look at how the abrupt halt in US aid disrupted critical development programmes and forced many Nigerian organisations to reveal their operational fragility.
