Doubling of aid vital to Africa's growth

By Isabella Gyau Orhin


An Official in the office of the United Nations Conference on Trade and Development (UNCTAD) in Geneva, Dr. Samuel Gayi has said doubling of aid to Africa can help the continent out of its economic problems.
Speaking at the launch of this year’s UNCTAD report with the theme “Doubling aid: Making the Big push work,” released in Accra last Thursday, Dr. Gayi said aid works better depending on its quality and the policies of the recipient countries.
“Large mounts of well targeted aid has made effective impacts,” he said, adding, “The Marshall Plan helped construct the economies of Western Europe after World War II.”
Aid to Africa according to him should not only be doubled as already agreed by donors but also should be distributed multilaterally, perhaps by a UN Fund independent of political pressures.
The UNCTAD report also suggests that aid money should be released in predictable tranches over a long term period and should be more focused than currently on enabling African countries to produce a broader range of goods and to create more jobs.
The report further noted that resources should be channeled to African countries’ general budgets so that their legislatures can best decide how to spend them.
Donor agencies have been accused of running chaotic system in which too many bilateral and multilateral agencies are pushing projects abroad sometimes confusing recipient countries.
According to the report a new “aid architecture” is needed, drawing in part on the Marshall Plan, paid by the US government that helped revitalize European economies in the post war years.
“That Plan recognized that shock therapy and piecemeal projects had not helped in getting Western Europe back on its feet and offered instead a generous, multi-year and coordinated funding approach,” where each state drew up long term recovery plans with no outside interference.
The US is said to have released aid in predictable tranches predominantly though grants under the Marshall Plan.
Intermediate targets were used to measure progress and rules as well as conditions of aid were flexible.
The report said, given, the basic challenges across the region of Africa, much of this initial push will be frontloaded on the public sector where the preferred modality of support from the international community should be in the form of grants to the national budget.
“Donors should abide by their commitments to significantly raise the share of direct budget support, currently just 20 percent of bilateral flows to sub-Saharan Africa (SSA),” the report said.
Although the international Community has turned its attention to the quality of aid given to Africa, the UNCTAD report is worried about the fact that the right balance has still not been struck.

It says while aid flows have on the average risen sharply since their low point in the late 1990s, much of this rise has been accounted for by debt relief and with a handful of what some people call “aid darlings,”
Also the report said since the early 1990s, the focus of aid has shifted to Eastern Europe and the Mediterranean countries, while security issues have in recent years become a principal concern for some donors.
Other shortcomings in the current aid regime in Africa include the fact that the yare based on short term results, with too high technical assistance components and are increasingly targeted at social sectors, which though important do not address the needs of African countries to build the productive infrastructure and capacities that will enable them diversify and upgrade their economies.
These changes the report said require long-term attention with the advantage of offering a way out of the poverty cycle and for donor nations, an end to the ever increasing requests for aid.
According to the report, Africa has received some 500 billion in aid since 1980. However the report said East Asia in the 1950s and 60s and Ireland from the 1970s enjoyed larger aid flows than most African countries.
This, the report said indicates that increased aid can give the big push to the region sparking a virtuous circle of higher rates of savings, investment and economic growth.
After almost a decade of aid apathy, a series of international conferences have been held which has revived the aid debate. These include the Millennium Summit of the UN in 2000, the Monterrey Summit on Financing for Development in Mexico in March 2002, and the G8 summit in Gleneagles, Scotland in 2005 among others.
Dr. Gayi said there is a consensus of doubling aid to Africa among donors, what is left is the action to push it.
Speaking at the launch of the report in Accra organized by the Third World Network (TWN), the Regional Programme Manager for Abantu for Development Rose Mensah Kutin said although the aid regime is changing, its implication for women in terms of access and control are not being discussed thoroughly.
This she said must be considered if the world could be able to create an environment where women will be able to impact positively on economies.
The Minister for Women and Children’s Affairs Hajia Alima Mahama who launched the report said too much of donor aid goes into technical assistance leaving the actual projects with very little money.
She said although African countries have experienced growth, these are not enough to propel African economies forward hence the need for more aid.
She said aid should be properly targeted to achieve the desired impact as happened in the case of child and maternal mortality projects in the Upper East region where significant progress has been achieved.
“What flows out of Africa is even more than what flows into Africa, she said adding "We have the right to ask for more aid and if the UN is helping us through UNCTAD, we are most grateful,” she said.