Monday, October 06, 2014

The failing aid

$250bn (£157bn) of financial assistance pledged to fight poverty between 2000 and 2012 never left western donor nations.  The advocacy group ONE said that one-sixth of the total money promised in aid was actually spent on debt relief, administrative costs or was spent hosting foreign students and refugees.

 Collectively donor countries were spending 0.29% of national income on aid, well below the UN target of 0.7%. The report said that western aid was not being targeted at the least developed countries (LDCs). Donors spent 0.09% of their aid budgets in LDCs in 2012, compared to the UN target of 0.15-0.2%.

“LDCs remain highly dependent on aid, which accounts for over 70% of their external flows and is equivalent, on average, to half of their tax revenues”, ONE reports. It called for 50% of donor financial assistance to go to the world’s poorest nations.

 African governments were not meeting their own commitments to allocate sufficient public spending to areas such as health, agriculture and education.

“Most countries still have a shockingly low level of per capita spending, owing to a limited tax base and the loss of potential government revenue through corruption and illicit financial flows,” the report said. Between 2010 and 2012, only six of 43 countries in sub-Saharan Africa met their pledges to devote 15% of their national budget to health. Only one of 33 countries met a commitment to spend 9% of public money on education.

From here 

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