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October 3, 2007 - December 2, 2007
Financing For Development: Scaling Up Or Changing Course?
Statement Issued by Civil Society Organisations Attending the Financing for Development Meeting Held in Abuja from 21-22 May, 2006.
Presented by Dr. Otive Igbuzor, Country Director, ActionAid International Nigeria at the Financing for Development Conference on 21st May, 2006.
May 23, 2006
What is needed to achieve the MDGs in Africa: ‘scaled-up’ development or a different kind of development?
The answer is both. Clearly, current efforts to eradicate poverty are not working. With only 3500 days to go until the MDG deadline expires on December 31, 2015, still only half of African children complete primary school, and only 1 in 5 of Africans needing treatment for HIV/AIDS receive it. The number of hungry people across the continent is increasing, and extreme poverty is actually on the increase.
The new aid pledged by the G8 and EU member states last year, combined with expanded debt relief and increased budgetary allocations from governments, could provide enough resources to solve all of these problems and more. However, unlocking the potential of this money will demand a radical overhaul of current development partnerships. In fact, without such reforms, as much as half of the $110 per African potentially available from the G8 pledge and from government budgets may be wasted.
Meanwhile, development must be seen in a holistic and integrated manner addressing issues beyond education and health to include issues of hunger, fair trade, water and sanitation and women empowerment.
Our research shows that:
· Only 50% of current aid is ‘real’ aid available for spending on schools, clinics, medicines and other essential MDG needs.
· Donor spending on consultants, research and training absorbs roughly a quarter of total aid flows, yet this “Technical Assistance” is widely acknowledged to be overpriced and ineffective.
· Over 20% of aid to Africa is tied. Primary education for every child in Africa could be funded simply from the savings from untying aid, which the OECD estimates would unlock an extra $7bn per year.
· Despite the overwhelming need for teachers, nurses and other public sector workers, much aid is too short-term and unpredictable to enable governments to meet these needs.
· Overly restrictive ceilings on public spending, requested by the IMF, also stop countries using aid to fund core MDG needs. Nations such as Uganda and Bolivia, for example, have been offered additional aid for education, yet have turned it down in part due to IMF pressure, as well as concerns about lack of long-term predictability of aid flows. In Kenya, IMF-imposed caps on the national budget have prevented the Ministry of Education from hiring the 60,000 teachers that it needs to expand primary schooling.
In addition, despite the G8’s pledge that African countries must be free to design and sequence their own economic policies, donors continue to use aid to push ‘one-size-fits-all’ policy prescriptions – such as water privatisation or export-led agricultural development. This happens both through individual countries’ aid programmes, and through loans from the IMF and World Bank, whose boards are dominated by the G8 countries. Most of these policies have failed to produce the sustained growth they were supposed to, many have carried unacceptably high political costs, and in some cases they have actually worsened poverty.
Donor conditions also choke the growth of democracy in Africa, forcing governments to render account to foreign bureaucrats rather than to their own people, and giving greater weight to the views of donor experts than the needs and aspirations of the poor themselves in formulating policy.
Finally, failure to fully write off the unpayable and odious debt of all poor countries means that much of what comes in as aid goes back out in debt servicing. Every day, Africa spends $30 million servicing its debt – enough to provide antiretroviral therapy for a whole year to every African who needs it. Before Gleneagles, two thirds of the countries that had actually received debt cancellation under HIPC were still spending more on repaying loans than on healthcare. Because debt relief has been tied to a highly subjective IMF judgment about whether countries are ‘on track’in fulfilling a slew of externally imposed economic benchmarks, the continuing debt overhang also stops countries determining their own paths to increase growth and achieve the MDGs.
Recommendations to donors and IFIs
Recommendations to African governments
This Statement was issued after a meeting held at Top Rank Hotel Abuja on 20th May, 2006 and endorsed by the following organisations:
Women Aid Collective
Centre for Population and Development Activities (CEDPA)
Civil Society Action Coalition on Education for All (CSACEFA)
Pro-Poor Governance Network
Civil Society Coalition on Poverty Eradication (CISCOPE)
West African Civil Society Forum (WACSOF)
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