The Reality of
Aid is: that despite decades of development aid to Africa poverty
has continued to deepen.
The Reality of
Aid is: that the World Bank and the IMF remain the dominant drivers
and gatekeepers of donor policy in Africa. Their assigned position has
given them an added role as instruments of governance at the global
level, even when this has no legitimacy. They continue to put pressure
on African development through their conditionalities, using development
aid as a lever to impose the neo-liberal paradigm of privatisation,
liberalization and the markets. The power relations in the WTO suggest
it plays an important role in global governance. Pressure from the United
States on some countries, using development aid as a lever to secure
agreement in the WTO, is a clear link between the trade agenda and development
aid.
The Reality of
Aid is: that African countries have a keen interest in fully participating
in the multilateral global trading system. They see trade as an engine
of growth with the potential to increase incomes and liberate them from
dependency on development aid, whose conditionalities have undermined
their rights by failing to stimulate development.
The Reality of
Aid is: that the current aid regime undermines governance at the
national level and violates human rights because of the conditionalities
imposed. Africa must of necessity find a way out of this constricting
relationship with the rich countries and their institutions and instead
participate in the global economy on the stronger basis of trade.
The Reality of
Aid is: that Africa has to pay more attention to trade as an alternative
to development aid. Africa generates less than 2% of global trade. If
open trade is the most profitable business in the world today, then
trade could give Africa what development aid has failed to provide -
sustainable development. Access to markets must therefore be the imperative
language of all development discussions.
The Reality of
Aid is: that "if the aid that went to Zambia between 1961 -1994
had gone to promote investment and if the investment had been as important
to growth as initially predicted, the country's per capita income would
have been more than $20,000 in 1994 and not $600". The fact is that
the majority of Zambian people have become poorer (per capita income
of $1,000 in 1964).
The Reality of
Aid is: that it is important to know why development aid cooperation
is not being more effective in reducing poverty in Africa.
The Reality of
Aid is: that there is a financial gap of about US$64 billion per
year between what African countries can raise, and what they need to
spend on development. Closing the leakages of financial outflows from
Africa, estimated at more than US$75 billion, could easily fill that
gap. These include terms of trade losses of over US$ 60 billion, illegitimate
debt of US$10 billion and barriers to markets of US$5.4 billion per
year.
The Reality of
Aid is: that since the AGOA enactment in 2000 US imports from Sub-
Sahara Africa have increased by over 60%, making the US the largest
single market for the region accounting for 27% of exports. AGOA's development
impact seems to be promising.
- Kenya is reported
to have established and reopened at least nine factories, which have
generated at least 20,000 jobs.
- In Lesotho, 11
new factories and the expansion of eight additional ones have resulted
in 15,000 new jobs allowing manufacturing sector employment to exceed
government employment for the first time.
- Malawi is reported
to have created 4,300 new jobs as a result of AGOA
- US$ 78 million
of investments have been attracted to Mauritius with the consequent
increases in employment.
Notwithstanding
the problems surrounding AGOA, this new reality gives hope for Africa's
transformation and a possible exit strategy from development aid that
has trapped Africa into debt and conditionalities. It offers new realities
that will increase employment and incomes and create a sustainable environment
in which it will be possible to realise good governance and people's
rights.
The Reality of
Aid is: that neo-liberal policies on which the current reality hinges
and which define current international cooperation have failed to spur
economic growth and reduce poverty.
The Reality of
Aid is: that Africa should focus on the achievement of the Millennium
Development Goals (MDGs) and should assess how best these can be attained
without confining itself to the development aid framework which has
so far failed to provide an exit route to poverty but continues to undermine
national governance and violate human rights.
The Reality of
Aid is: is an independent assessment of the nature and performance
of development aid. The project aims to contribute to more effective
strategies to eliminate poverty, based on principles of solidarity and
equity, by analysing international aid and development cooperation and
lobbying for changes in north/south systemic relationships in aid practices.
The fundamental question therefore remains as to whether Africa needs
Aid or not? If so what aid should it be, and how should it be managed
and for whom should it be? If not, what are the real and tangible alternatives
to development aid?
The Reality of
Aid, Africa Edition 2003/4 is: targeted at policymakers in Africa,
particularly Heads of States, African Finance Ministers, Ambassadors
to the United Nations and other agencies.
It is also aimed
at enlisting wider support of CSO groups both in the South and North
to stimulate discussions with their constituencies on issues raised.
The Reality of
Aid, Africa Edition 2003/4 is: a culmination of various workshops
and meetings between AFRODAD affiliates and organisations working on
debt and aid in Kenya, Zambia, Tanzania, Zimbabwe as well as contributions
from other African countries, which allowed for a truly African perspective
of the issues.
