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Doubling Aid? Absorptive Capacity, Impacts and the Donor Response in Africa

Time (GMT +00) 13:00 14:00

Tony Killick, Senior Research Associate - ODI
Alex de Waal,  fellow at the Global Equity Initiative - Harvard University and Director - Justice Africa

Hugh Bayley, MP

1. The fourth meeting in the series was on the topic of "Doubling Aid? Absorptive Capacity, Impacts and the Donor Response in Africa". The meeting was chaired by Hugh Bayley MP. The speakers were Tony Killick and Alex de Waal.

2. Tony Killick began by saying that he would be arguing the case against large increases in aid to Africa. Despite this, he agreed with aid advocates that the West had been mean in terms of reaching the 0.7% target; that aid could be a powerful driver of poverty reduction when complementary conditions were met; that there was scope for spending more money in certain areas, for example, the treatment of disease; and that Africa was the "problem" region, in the sense that it was least likely to reach the MDGs.

3. At the same time, it was important not to be excessively pessimistic about Africa, nor to over generalise. Growth on average was in the region of 4-5% per annum. Some countries were lagging, but in 2002, the latest year for which figures were available, 25 countries had raised average living standards and only 9 had failed to do so. Overall, per capita income had risen by 2% in 2002. Social indicators were also improving.

4. The case for large rises in aid to Africa was being made with great energy. The peg was the achievement of the MDGs. The meeting title referred to a "doubling", using this as a metaphor for any large, discontinuous and short-term increase in aid. It was important to note that the increase would be larger than a doubling in Africa, given the special development needs in the region. Amongst the main protagonists, Tony Killick identified the Millennium Project in New York (led by Jeff Sachs), the work on the International Financing Facility in the Treasury, and the priority given to the issue by the Prime Minister, including through the Africa Commission.

5. Tony Killick's key argument was that the emphasis on large and quick increases in aid would (a) undermine efforts to improve the effectiveness of aid because quality would suffer and (b) because the resulting additions to already high aid dependency would undermine accountability, ownership and institution-building in African countries.

6. Aid was already very highly concentrated on Africa, and the region exhibited a high dependency. For example, for the top half of recipients, aid accounted for 17% of GNI, 108% of gross domestic capital formation and 49% of imports. The risks with rapidly increasing aid included: (a) diminishing returns; (b) limited absorptive capacity (especially because of weak institutions and a brain drain); (c) the undermining of domestic ownership; (e) high fiduciary risk because of weak budget institutions (associated with fungibility, poor accountability and corruption); (f) macroeconomic problems created by large additional inflows, particularly Dutch Disease; and (g) negative effects on domestic accountability, the strengthening of local institutions and governments' willingness to tackle deep-rooted problems (moral hazard).

7. Tony Killick argued that most constraints on faster progress in Africa were domestic and associated with weak political cultures in Africa. It was important to recognise that many African problems were home-grown. In this sense, Africa was not so much a "scar on the conscience of the world", but a consequence of flawed political systems, as was being demonstrated by DFID's work on Drivers of Change.

8. A further point was that all the problems would be compounded by the pressure on donors to spend quickly. This would undermine selectivity, multiply problems associated with poor projects, and generally reduce the effectiveness of aid.

9. Concluding, Tony Killick made two further points. First, there was a real risk that the emphasis on aid quantity would detract attention from other issues, like trade. Second, he was uncomfortable with the pretence that current initiatives were African-owned. This was especially the case with the Africa Commission, which was clearly initiated outside the continent. To maintain the pretence there was a danger that the Commission and others would exaggerate the achievements and potential of NEPAD.

10. Next, Alex de Waal focused on health issues, building on the soon to be published results of the Joint Learning Initiative carried out at Harvard University under the leadership of Professor Lincoln Chen. The focus of this project was on human resources for health. The key point was that spending more money to achieve the MDGs would not be successful in the absence of serious attention to what Alex de Waal described as the "real resources", meaning health personnel.

11. Globally, there were something like 100 million people working on health in the world, with 9 million doctors, 15 million nurses, and perhaps 75 million auxiliaries of various kinds. However, the numbers were very unequally distributed. Sub-Saharan Africa was the worst off, with perhaps one-tenth the density of health workers found in Europe. The continent needed to double the number of health workers and also tackle skill and geographical imbalances (e.g. as between rural and urban areas). The problems had been exacerbated by migration.

12. Alex de Waal made the point that Africa's current problems in the area of health man power were deeply-rooted, with decades of neglect and poorly executed reform. For example, public sector reforms in Kenya meant that the country was unable to hire new health workers; in Zambia, health workers were still being laid off. Problems had been greatly exacerbated by internal migration, and by the impact of HIV/AIDS.

13. There was then a real difficulty in scaling up, and there were real dilemmas in the allocation of staff. The Joint Learning Initiative had concluded that the decade 2005-2015 should be designated a decade for human resources in health, with national work force plans and a large scale mobilisation of health workers to combat crises. There should also be an international task force on human resources. The key issue, to emphasise, was the importance of investing in people.

14. There was an extended discussion of these points. One speaker emphasised how weighty and far-reaching the presentations had been. These were two highly-respected researchers, using the opportunity of a platform in the UK Parliament to raise serious questions about a key plank in the 2005 and longer-term development platform.

15. A number of speakers addressed the issue of the trade off between quantity and quality. Was it possible to give more aid in ways which achieved MDG-related objectives, but also protected quality and reinforced accountability? There were various suggestions: ring-fence part of the additional aid in order to build capacity; support the private sector rather than try to channel all extra money through government; provide additional aid direct to poor people rather than to institutions. The general tenor of these arguments was to ask whether the scale of the need did not require that additional money be spent - suggesting that the challenge was to find a way of doing this successfully. Tony Killick commented on this and re-emphasised the importance of a possible trade-off between quantity and quality. He felt very strongly that increased spending would lead to a sacrifice of selectivity and attempts at harmonisation. Africans needed to take charge of the development process and needed to solve their own problems, with outside help: however, outsiders should not undermine those efforts.

16. Alex de Waal had a slightly different answer, arguing that more money could be spent and the MDGs could be achieved, providing the additional resources were spent in the right way. And in reply to a suggestion that the answer to personnel problems might be to send volunteers in Africa, he thought the better answer would be to upgrade the work force.

17. There was some debate about the cause of Africa's problems. Alex de Waal argued that poor governance was very much tied up with fragmentation caused by colonial powers. He suggested that India would be in the same state as Africa if it had been similarly divided at the time of independence. This led him to suggest that a key element in any solution for Africa was regional integration.

18. Some of the blame was also laid at the door of donors. In particular, the complexity of donor procedures and the multiplicity of programmes and projects imposed great costs on Africa. The harmonisation agenda was a very important part of the solution.

19. There was a discussion about the impact of international migration. Some thought it was detrimental and suggested ways to reduce it (for example, by making qualifications less transferable). Others said that migration could have a positive impact, for example through remittances.

20. Summarising the conclusions of the meeting, Hugh Bayley noted the importance of the debate. He felt that there needed to be a strong emphasis on capacity-building in any aid programme.

Simon Maxwell
4 November 2004


This event looked at whether large aid increases could be absorbed and how.

Committee Room