||Since the mid-1980s most African universities have been struggling with massive decreases in available resources. Support from external donors, after decreasing through the early- and mid-1980s, has stabilized and may even be rising. However, given the loss of government resources for core activities, donor support has assumed a greater overall significance and is increasingly needed for core activities such as teaching, staff development and infrastructure. External support is often planned in relation to policies developed by each donor agency, rather than integrated into university institutional development initiatives, with the danger that it erodes capacity-building. This paper, reporting on comprehensive research undertaken in two African universities with high levels of donor support, seeks to illustrate the seriousness of the problem, and to analyse why it has grown. The paper suggests that it is possible, given better understanding of the issues, to improve the situation, but only if donor support is flexibly coordinated in function of university needs and plans. It further argues that successful coordination calls for a changed relationship with universities. Finally, the paper attempts to draw out issues of general significance for higher education policy in Africa and suggests that the crisis of African universities manifests itself in complex and highly specific situations that are not amenable to simple universal policy prescriptions. .