Aid flows to Africa under threat as world recession bites: since the 2002 Monterey Consensus, global aid to developing countries has been rising, but the severity of Western governments' financial woes could put a brake on future Official Development Assistance (ODA) flows, otherwise known as aid.

Author:Siddiqi, Moin
Position:VIEW FROM THE CITY
 
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This reduction in aid flows could prevent the ambitious targets for the Millennium Development Goals (MDGs) agreed in 2000--with a strong emphasis on education, healthcare and basic infrastructure--being achieved. "We need to react in real time to a growing crisis that is hurting people in developing countries," said World Bank president Robert Zoellick. "We need investments in safety nets, infrastructure, and small and medium-size companies to create jobs and to avoid social and political unrest," he added.

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In 2008, total net ODA from members of the OECD's Development Assistance Committee (DAC) rose 15.7% to $119.76bn. This was the highest dollar figure ever recorded.

The top five donors by volume were the US ($26bn), Germany ($13.9bn), Britain ($11.4bn), France ($10.9bn) and Japan ($9.3bn). However, the 2009 report reveals that only five of the DAC's 22 members--notably Sweden, Luxemburg, Norway, Denmark and Holland--reached or exceeded the UN's target for rich donor countries to allocate 0.7% of their gross national income to bilateral aid.

The US and Japan were the least generous relative to national incomes, allocating only 0.18% to aid. The weighted average for 2008 was 0.3%, slightly up from 0.28% in 2007.

Africa's share of aid, however, fell by $5.5bn, or 17%, to $26bn, equal to one fifth of the 2008 global aid total. Excluding volatile debt relief grants, bilateral aid to sub Saharan Africa rose by 10% in real terms (adjusted for inflation and currency movements). It reached a peak of $40bn in 2006, partly inflated by the Paris Club debt relief for Nigeria.

The SSA region of some 700m people still remains heavily aid-dependent, with ODA accounting for 120%, 49.5%, 42%, 35.4% and 32.7% respectively of national incomes in Liberia, Burundi, Mozambique, Guinea-Bissau and Sierra Leone.

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In total, half of the 46 SSA nations have aid/GNI ratios exceeding 10%. Least aidreliant countries are Equatorial Guinea, Mauritius, Gambia, Botswana and, surprisingly, Swaziland, according to the DAC report.

Gleneagles promises out of reach.

In 2005, donors committed to increase their aid at the Gleneagles G8 and UN Millennium +5 summits. The pledges made at these summits, combined with other commitments, implied boosting ODA from $80bn in 2004 to $130 in 2010, at constant 2004 prices, thus helping poorer nations' progress toward the MDGs.

Aid to SSA was to be doubled to $50bn or $85 per person by 2010. In...

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