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Development aid under the squeeze - Which way Africa?
Moreblessings Chidaushe
July 15, 2009

Like any other concerned citizen, I have, to the extent possible, tried to follow, closely, the voluminous information being generated by the on-going global economic crisis. Forget the sometimes contradictory facts, the reality is that although the severity of the impacts varies at global, regional and various national levels, the crisis is here and alive. Some have tried to downplay the impacts initially claiming that because Africa is not in the mainstream global economy there would therefore be minimal impact. Classical is the case of the South African government which only publicly admitted the crisis after the national elections then acknowledging that some of the promises made during the campaign may not be fulfilled because of the "recently discovered " crunch. Yet by the third quarter of 2008, the vehicle manufacturing industry was already showing heavy signs of the toll with thousands of employees either being laid off or working less time and taking paycuts. Other industries like the textile were not spared either. In Zambia, the fall in international demand for copper has led to a severe fall in the product-s price, in one year alone falling from $8,000 to $3,900 leaving more than ten thousand mine workers in the cold. In a number of countries in the region major development projects have either delayed or stalled due to cuts in resources. For example in Mozambique mega economic development programmes like the Nacala-Velha oil refinery, Chibuto Sands and the Nkanda Nkua dam (electricity generation) running into tens of billions of dollars have been affected.

The International Financial institutions (IFIs) estimate that the African economy will shrink significantly and have revised the economic growth projections from 6% to 3.25% for 2009.The International Labor Organization (ILO) has also revised - DOWNWARDS - its unemployment figures to estimates between 210 to 239 million (globally) in the current year. In a recent press release, the organization also highlighted that at least 73% of the workforce in Sub-Saharan Africa is in "vulnerable employment". This leaves nearly us all Africans vulnerable, bearing in mind that an employed African can have an average of 5 to 10 dependents. Socio-economic impacts are heaviest on the African citizens because of either weak or non-existent social security welfare systems in place to cushion them against the harsh impacts. Clearly the impact has direct and severe impacts to whatever efforts have so far been made to reduce poverty and bring about sustainable development thus we will witness ever growing poverty, hunger, disease, illiteracy and vulnerability in the coming years as a direct impact of the current crisis. The Millennium Development Goals (MDGs) although minimal in their nature face fresh and more serious challenges, derailing hopes of achieving them.

African leadership responses to the global economic crisis have been inconsistent ranging from denial, ignoring the debate, opportunity and threat. African citizenry although most affected by the crisis have barely been involved in the economic crunch discourse which remains topical mostly at international level. A few civil society meetings have been held, international media has been way ahead of the African media in churning out information and updates. The African Development Bank earlier in the year convened a meeting and in early June African Finance Ministers met in Egypt to discuss particularly the issue of resource pressure and domestic resource mobilization. Beyond this, the discourse has not been taken down to the man in the street, and the solutions, other than begging and pleading for more aid are not clear.

Africa-s income earning capacity through trade, remittances and development aid (major income sources for the continent) will continue to decrease as the economic crisis impacts escalate. Demand for the continent-s mineral resources including gold, copper, platinum, uranium and diamonds leading to mine shut downs and job losses. Due to high unemployment overseas, the bulk of African labour, most of which is unskilled and illegally living overseas suffers heavy layoffs as employers cushion their own citizens resulting in significant reduction in remittances which have previously brought billions annually to the continent. In 2007 alone Sub-Saharan Africa received about 12billion dollars through official remittance channels. In the same year, globally more than 300 billion was remitted while a net total ODA of 103 billion was received in the continent. Remittances, a huge source of income for the poor globally, are expected to fall by between 5-8% as migrant workers experience layoffs and in-fact some return to their original countries as has already been witnessed in places like Dubai, US, Australia and Spain amongst others.

Aid under the squeeze

Most Sub-Saharan African countries depend on average up to 40-50% of annual budgets on development aid. The traditional donors have mainly been the OECD member countries who give aid in form of humanitarian/emergency, grants and loans. Despite increasing concerns that aid has not delivered as expected, it continues to form a significant part of African economies and solutions and a key criticism has been the recipient dependency it creates on the donor. In the North, aid is generated from taxpayers and the Gross National Product (GNP) resources. It also comes from individual or organizational donations from well-wishers.

Criticism for the motivations for aid as mainly for buying strategic favor from the developing countries has become crystal clear especially in the advent of the financial crisis. Despite multiple pledges and so called commitments from the developed world over the years, Africa has consistently operated with an aid deficit with its annual requirements of a minimal 50billion hardly being met. Both aid quality and quantity have remained far below expectation. Political will by donors to see Africa progress to an independent and sustainable level has remained low, thus the little aid that has filtered into the continent can be viewed as a public relations exercise to buy strategic favor while the real poverty needs of the continent have been sidelined.

The double standards of the rich to the poor have been exposed as evidenced by how quickly the massive stimulus packages to rescue western corporate were put in place. It has become clearer that the issue of aid is not about the availability of resources but about sheer lack of political will by western leaders to see Africa out of its quagmire. According to the United Nations Millennium Campaign, 50 years of development aid brought in only 2 trillion dollars while overnight 18 trillion has been mobilized for bailouts. And now with the pressure to resuscitate their own economies, it will be a miracle if the third world agenda and development aid remained a genuine priority for the rich.
Thus clearly the situation is gloomy for our dear continent - which currently is not doing much on its own to address the crisis, largely hoping that the western solutions will trickle down for Africa to benefit from. Gloomy as the picture maybe, African citizenry is thus challenged to start taking an aggressive stance in finding its own solutions. Civil society organizations have long called on African governments to adopt development frameworks that will depend less on aid in the long run, they have also long called for domestic resource mobilization and prudent use of these - an issue the international community has recently highlighted, a subtle message to lower the expectations of aid and also a survival strategy as each man fights for themselves to fight the economic crunch. In his first official visit to Africa, United States president Barack Obama emphasized in a speech to the Ghanaian parliament that Africa needs to forge its own future and solve its own problems and most importantly that Africa-s future is up to the Africans. The western message to the continent has been clear - if this time around Africa does not heed and learn and take care of its destiny - it may never learn thus remain poor and dependent.

This article intends to challenge the African leadership and citizenry to extract and learn positive lessons from the crisis and shine the light in this gloom. I for one am optimistic and would like, despite the current challenges, to see the continent reemerging stronger , less dependent and better off after the crisis - this however is largely dependent upon the lessons which the continent chooses to learn from the crisis. Unfortunately so far the continent seems to take a victim stance and wait for others to come up with a solution for us.

Possible solutions have revolved around more begging and urging major donors not to cut their allocations but under the circumstances the question is whether that is a practical and a worthy pursuing option. Instead of going round with the begging bowl, it is time the Africans came up with internal solutions to its problems. And yet the leadership needs to be reminded that a sustainable solution cannot be achieved without the involvement of the citizenry who are the worst affected.

Some possible solutions to cope under the crisis include:

• Using aid resources better - ensuring that the little aid coming in is reaching the poor for whom it is intended
• Investing in basic services and socio-economic infrastructure to ensure safety nets for its citizens especially during crunch times.
• Domestic resource mobilization and prudent use of the resources.
• Promote sub-regional, regional and continental integration
• Living within our means and minimizing borrowing
• Have more confidence in its citizenry as an uncompromised resource that will develop its continent.

* Moreblessings Chidaushe, Programme Advisor, Economic Justice & Accountable governance, Norwegian Church Aid

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