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Africa: "Aid" Promises Unmet
AfricaFocus Bulletin
Jun 5, 2007 (070605)
(Reposted from sources cited below)
Editor's Note
"The record so far indicates that apart from debt reduction,
African countries haven't realized the benefits promised at the G-8
Summit two years ago, during the Year of Africa," John Page, the
World Bank's chief economist for the Africa Region.
Except for representatives of rich countries themselves, now making
new promises in advance of the G-8 summit, the verdict appears to
be a consensus. The World Bank itself is joining World Bank critics
in chiding rich countries for failure to live up to their promises
to Africa. And the official Development Assistance Committee
statistics, released earlier this year, show a drop in aid from
2005 to 2006.
This conclusion holds whether debt relief deals are counted as
aid or not, a controversial issue. According to the latest World
Bank data, net official flows of aid and debt to African countries
dropped to $35.1 billion in 2006 from $35.8 billion the previous
year.
This AfricaFocus Bulletin contains press releases from the World
Bank and from the Development Assistance Committee of the OECD, as
well as a news report on a conference and statement in Johannesburg
by African Monitor (http://www.africanmonitor.org).
For previous AfricaFocus Bulletins on economic issues, see
http://www.africafocus.org/econexp.php
For a general review of the G8's record on Africa, see Henning
Melber, "The G8, Africa and Nepad: A critical appraisal," in
Pambazuka News http://www.pambazuka.org/en/issue/303
In a recent related article in the New York Times Magazine
(http://www.nytimes.com, article accessible free with login),
journalist Tina Rosenberg comments on "Reverse Foreign Aid," She
notes that in 2006, the net transfer of capital from poorer
countries to rich countries in 2006 was $784 billion, up from $229
billion in 2002.
According to the midyear UN report on the World Economic Situation
(http://www.un.org/esa/policy/wess/wesp.html), the African
continent registered a negative net transfer of $95 billion,
including $10 billion from sub-Saharan Africa, excluding Nigeria
and South Africa. See press release at
http://www.un.org/News/briefings/docs/2007/070530_Ocampo.doc.htm
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G-8 Commitments to Africa Are Behind Schedule
World Bank finds donor nations lag on promises on greater aid,
freer trade
World Bank Press Release No:2007/419/AFR
For more information, please visit: http://www.worldbank.org/africa
and http://www.worldbank.org/gmr2007
Contacts:
In Washington:
Tim Carrington, (202) 473 8133, tcarrington@worldbank.org;
Ana Elisa Luna, (202) 473 2907, alunabarros@worldbank.org
Washington, June 3, 2007 - Two years after pledging a doubling of
aid for Africa and new opportunities for African exports, donor
nations are falling behind in fulfilling their promises, according
to the World Bank. The assessment comes ahead of a meeting of the
G8 in Heiligendamm, Germany, from June 6 to 8.
With Africa's economic prospects high on the G8 agenda, the World
Bank noted that despite the 2005 Gleneagles Summit, resulting in
pledges to increase Africa's development aid to $50 billion by
2010, foreign assistance for development programs in many African
countries remains essentially flat.
Meanwhile, the faltering trade talks under the World Trade
Organization's Doha Round have been another disappointment.
"The record so far indicates that apart from debt reduction,
African countries haven't realized the benefits promised at the G-8
Summit two years ago, during the Year of Africa," said John Page,
the World Bank's chief economist for the Africa Region.
"Many donor countries have increased support for special
humanitarian assistance and debt reduction over four decades, but,
unfortunately this does not translate into additional resources
for African countries to rebuild their infrastructure, train
teachers and combat HIV/AIDS and malaria."
Obiageli Ezekwesili, World Bank Vice President, Africa Region,
noted that for their part, African countries are increasingly
taking the lead in pushing improved governance, and in many cases
have established significantly more attractive environments for
investment. "The question is less about whether the African
partners are delivering on their promises, than whether the wealthy
industrial nations are honoring the commitments they all boldly
made in Gleneagles," she said.
While donor aid is lagging, the World Bank said that progress in
lowering debt burdens for Sub-Saharan Africa has moved ahead
somewhat faster. Multilateral debt relief undertaken by the World
Bank, the International Monetary Fund and the African Development
Bank will bring about the full cancellation of $50 billion of debt
over 40 years. Beginning in July, 2006, when the initiative took
effect, 16 African countries have benefited. Another 17 will become
eligible once the reach the completion of debt reduction programs
under the World Bank's Heavily Indebted Poor Countries Initiative.
Overall the lagging resource flows come on top of an earlier
decline in African assistance: excluding debt relief and emergency
food aid, assistance to sub-Saharan African fell by 2.1 % in real
terms from 2004 to 2005. According to estimates in the World
Bank's 2007 Global Development Finance, net official flows of aid
and debt to African countries dropped to $35.1 billion in 2006 from
$35.8 billion the previous year.
African countries that have posted solid record of economic growth,
and have established macroeconomic stability through years of
reform, have seen little or no increases in donor resources for
financing development. Many of these countries - despite the recent
history of growth - need external help to rehabilitate roads,
extend access to electricity, and improve education and health
systems.
"Our biggest concern right now is that we help Africa extend the
gains that we have seen in the past five years," said Ms.
Ezekwesili. "Only visible impact of growth in the standard of
living of citizens can strengthen and guarantee their sustained
support for reforming governments and this requires massive
financial resources which the continent lacks."
Aid Set to Drop, Warns Monitoring Group
http://allAfrica.com
31 May 2007
Cape Town - Aid flows to Africa have remained static for two years
and are set to drop, in spite of donor promises to increase giving,
a monitoring group has found.
Moreover, donor support to agriculture and rural development has
decreased, while African governments are failing to meet their
target of increasing agricultural spending to ten percent of their
budgets.
These findings have been released by the African Monitor, a South
African-based NGO which has been established to ensure that donors
meet their promises and aid recipients spend the money properly.
Archbishop Njongonkulu Ndungane of Cape Town, president of the NGO,
told a media briefing that although Africa's growth rates had been
impressive in the last few years, this did not automatically lead
to improvements in the socio-economic conditions of the poor.
"Aid has remained static to Africa since 2005, and has decreased
overall if debt relief to Nigeria and Iraq is excluded," Ndungane
said. "Donors who promised to double aid to the continent are
largely not fulfilling that promise. In 2007 and 2008 aid is
expected to drop even further."
Ahead of the G8 Summit in Germany in June, the World Economic
Forum's forthcoming Africa meeting in Cape Town and the African
Union Summit in July, Ndungane called on world leaders "to
prioritize delivery for the grassroots."
Development aid from OECD countries fell 5.1% in 2006
Development Co-operation Directorate (DCD-DAC)
Organisation for Economic Cooperation and Development (OECD)
http://www.oecd.org/dac
April 3, 2007 - The 22 member countries of the OECD Development
Assistance Committee, the world's major donors, provided USD 103.9
billion in aid in 2006, down by 5.1% from 2005, in constant 2005
dollars. This figure includes USD 19.2 billion of debt relief,
notably exceptional relief to Iraq and Nigeria. Excluding debt
relief, other forms of aid fell by 1.8%.
Sixteen of the DAC's 22 member countries met the 2006 targets for
ODA that they set at the 2002 Monterrey Conference on Financing for
Development. However, aid to sub-Saharan Africa, excluding debt
relief, was static in 2006, leaving a challenge to meet the
Gleneagles G8 summit commitment to double aid to Africa by 2010.
Total official development assistance (ODA) from members of the
Development Assistance Committee (DAC) fell by 5.1% in 2006 to USD
103.9 billion. This represents 0.30% of members' combined Gross
National Income (see Table 1 and Chart 1). In real terms this is
the first fall in ODA since 1997, though the level is still the
highest recorded with the exception of 2005.
The fall was predicted. ODA was exceptionally high in 2005 due to
large Paris Club debt relief operations (notably for Iraq and
Nigeria) which boosted ODA to its highest level ever at USD 106.8
billion. In 2006, net debt relief grants still represented a
substantial share of net ODA (see Table 2), as members implemented
further phases of the Paris Club agreements, providing a little
over USD 3 billion for Iraq and nearly USD 11 billion for Nigeria.
Excluding debt relief, ODA fell by 1.8%.
Preliminary data show that bilateral net ODA to sub-Saharan Africa
rose by 23% in real terms, to about USD 28 billion. However most
of the increase was due to debt relief grants. Excluding debt
relief for Nigeria, aid to sub-Saharan Africa increased by only 2%.
The only countries to reach or exceed the United Nations target of
0.7% of GNI were Sweden, Luxembourg, Norway, the Netherlands and
Denmark. The largest donor in 2006 was the United States, followed
by the United Kingdom, Japan, France and Germany. The combined ODA
of the fifteen members of the DAC that are EU members accounted for
57% of total net ODA.
In 2006, net ODA by the United States was USD 22.7 billion, a fall
of 20% in real terms. Its ODA/GNI ratio also fell to 0.17%. The
fall was mostly due to debt relief which was exceptionally high in
2005 as the United States forgave all its outstanding debt with
Iraq in 2005 rather than spreading it over several years. US
disbursements to Sub-Saharan Africa (USD 5.6 billion) reached a
record high mainly due to debt relief (USD 1.4 billion, of which
Nigeria was USD 0.6 billion) and increased disbursements for
education, HIV/AIDS and malaria programmes. Net ODA flows to Iraq
remained substantial (USD 4.8 billion), to Afghanistan increased
(USD 1.6 billion) and to the least developed countries were at
their highest level ever (USD 5.5 billion).
Japan's net ODA was USD 11.6 billion, representing 0.25% of its
GNI. The 9.6% fall in real terms since 2005 was partly due to
exceptionally large expenditures in 2005, including humanitarian
relief for the Indian Ocean tsunami and debt relief grants to Iraq.
Japan's net ODA has been on a downward trend since 2000, except for
an increase in 2005 due to debt relief. The 2006 ODA total includes
an increase in Japan's contributions to the International Financial
Institutions.
The combined ODA of the fifteen DAC-EU members rose slightly by
2.7% in real terms, from USD 55.7 billion in 2005 to USD 58.9
billion in 2006. This represented 0.43% of their combined GNI,
surpassing the EU collective ODA/GNI target of 0.39%. The increase
in 2006 was mainly due to debt relief grants.
Aid rose in ten DAC EU member countries as follows:
- Ireland (33.7%), reflecting increasing bilateral aid as well as
large multilateral contributions,
- Spain (20.3%), due to a large increase in contributions to the UN
and other multilateral, organisations, as well as an increase in
disbursements by AECI, the Spanish Co-operation Agency
- Sweden (15%), due to general scaling up of its aid and debt
relief,
- United Kingdom (13.1%), due to a substantial increase in
contributions to international organisations,
- Aid also rose in Denmark (2.9%), France (1.4%), Germany (0.9%),
Luxembourg (4.9%),
- Netherlands (4.2%) and Portugal (0.6%).
Falls were noted in Austria (-6.0%), Belgium (-2.7%), Finland
(-9.9%), Greece (-4.1%) and Italy (-30%, mainly due to the timing
of its contributions to international organisations).
Aid provided by the European Commission rose by 5.7% to USD 10.2
billion reflecting increased budget support and improved
disbursement capacity from the higher level of commitments made in
recent years.
ODA from other DAC countries rose, or fell, from 2005 to 2006 as
follows:
- Australia (22.8%), primarily due to debt relief, notably to Iraq
and the Multilateral Debt Relief Initiative,
- Canada (-9.2%), due to the decline in debt relief and lower
levels of humanitarian aid compared to the extraordinary response
to the Indian Ocean tsunami in 2005,
- New Zealand saw no change (0.0%),
- Norway (-2.2%),
- Switzerland (-7%), due to the lower volume of debt relief grants
provided.
Net ODA data reported by seven non-DAC economies rose, or fell,
from 2005 to 2006, as follows:
- Chinese Taipei (3.6%),
- Czech Republic (6.4%), due to increased contributions to the EC,
- Iceland (55.3%), due to a general scaling up of Iceland's
contribution to development cooperation,
- Korea (-44.6%), due to lower contributions to the World Bank and
regional development banks,
- Latvia (-1.0%),
- Lithuania (15.2%), as it increased its contributions to the EC,
- Slovak Republic (-9.1%), as bilateral aid fell.
Gross ODA in 2006
On a gross basis, ODA represented about USD 116 billion. The
largest donors were the United States (USD 24 billion), Japan (USD
18 billion), the United Kingdom (USD 13 billion), Germany and
France (USD 12 billion each), the Netherlands (nearly USD 6
billion), Spain and Italy (just over USD 4 billion each)
representing 80% of the total.
Did members meet their 2006 targets?
In 2002, DAC members made various announcements before or during
the Monterrey International Conference on Financing for Development
to increase their aid in 2006 from the levels in 2000 (see Table
3).
In Barcelona, the then fifteen EU members committed to collectively
reach an ODA level of 0.39% of their combined GNI, with a minimum
country target of 0.33% by 2006. Most members reached the country
target, except for Greece, Italy and Portugal. Spain just missed
on these provisional data due to recent changes in its national
accounting system. The combined result in 2006 was 0.43%, well
above the target of 0.39% set in 2002, mainly due to debt relief
grants.
Since 2002, some EU members have set, and reached, even higher
goals for 2006. Belgium set an ODA target of 0.5% of GNI; Sweden
has surpassed its target of 1%; Denmark committed to maintain a
minimum ODA/GNI ratio of 0.8%; and Ireland to attain a level of
expenditure of EUR 734 million in 2006 (and to reach an ODA/GNI
ratio of 0.5% in 2007 and 0.7% in 2012).
Net ODA from the United States in 2006 reached higher levels than
expected due to large debt relief programmes and increased aid to
sub-Saharan Africa, Afghanistan and Iraq. Due to severe budget
restrictions, Japan did not make any announcement of a target for
its ODA in 2006. Norway's strong growth in GNI in recent years
made it impossible to meet its target of 1% ODA/GNI by 2005.
Future Prospects
ODA is expected to fall back slightly again in 2007 as debt relief
for Nigeria and Iraq tapers off. It is expected that other types
of aid should then increase as donors fulfil their more recent
pledges (see Chart 2).
The EU agreed in 2005 to scale up its aid further to provide 0.56%
of its members' combined GNI by 2010, or a minimum target of 0.51%
for DAC EU members. The overall EU target takes into account
commitments of some DAC EU members to increase or maintain aid
levels beyond the minimum country target, as well as pledges by the
non-DAC EU countries to participate in the scaling up of aid by
moving to specified minimum aid levels.
Australia has announced that it will double its ODA to about 4
billion Australian dollars by 2010. Japan has indicated it will
increase its ODA volume by USD 10 billion in aggregate over
2005-2009, compared to its ODA levels in 2004. Switzerland is to
determine a new goal for 2009 and thereafter.
AfricaFocus Bulletin is an independent electronic publication
providing reposted commentary and analysis on African issues, with
a particular focus on U.S. and international policies. AfricaFocus
Bulletin is edited by William Minter.
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