Does foreign aid work for Africa? Over the past few years, capital inflows to Africa, from a variety of sources, have increased considerably. One of these sources, official aid, has tripled since 2000; but is this sufficient to achieve the millennium Development Goals by 2015?

Author:Siddiqi, Moin
Position:VIEW FROM THE CITY - Africa economic conditions - Statistical data

The African economy has grown by 6% per annum during the past decade, the fastest expansion since the 1960s. The latest International Monetary Fund (IMF) forecast shows growth in sub-Saharan Africa might reach 7% in 2008, fuelled by increased oil production and rising domestic investment along with productivity.



Can official development assistance (ODA) by Western donors take the credit for this turnaround in Africa's fortunes? Clearly, it is far from the only factor.

Recent increases in private flows, diaspora remittances and the commodity boom have helped lift growth, particularly since 2002, and poverty, even in resource-poor states, has declined thanks to aid-supported policy reforms, improved governance and debt relief in recent years. Official flows to Africa from the donor community have nearly trebled since 2000, albeit from a very low level. The Development Co-operation Report 2007, published by the Paris-based think-tank, the OECD, shows net ODA to SSA in 2006 totalled $42bn.

The region (including North Africa) is the largest aid recipient--accounting for two-fifths of the total of regionally allocated funds. The proportion of ODA going to least developed countries (LDCs), the majority of which are African, has risen from 40% of net bilateral aid in 2002 to 46% in 2006, according to the report. Also, there was a marked increase in Africa's share of'programmable aid'--real money (excluding debt forgiveness grants and humanitarian aid) given to LDCs in support of long-term socioeconomic projects. In 2006, such assistance totalled $25bn or 60% of aggregate ODA.

Major recipients in 2004/05 were Ethiopia ($1,780m), Tanzania ($1,557m), Sudan ($1,386m), Mozambique ($1,245m), Uganda ($1,183m), DR Congo ($1,163m) and Ghana ($1,032m).

Flows to Sudan comprise mainly humanitarian aid. Ethiopia, Mozambique and Tanzania have received the largest sums of aid over the past decade. Both donors and recipient countries have made tangible efforts to improve the way aid is delivered and managed in healthcare, education, water supply, and economic infrastructure such as transport and communications. But flows to Cote d'Ivoire, Somalia and Zimbabwe, among others, fell steeply because of their political problems.

Half-hearted pledges

Development partners are running out of savings to keep the global aid industry afloat with annual inflation busting increases in funds. In 2006, the total aid from members of...

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