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Don't Throw Money at Africa


Written by Tony Killick


A surge in aid to Africa poses serious dangers. Aid dependency there, which already exceeds levels elsewhere, would grow more serious. As aid increases, its contribution to growth tails off and eventually becomes negative. The absorptive capacity of most African governments is in grave doubt. Recipient governments' access to additional aid will reduce their need to tax citizens weakening the imperatives to listen to and account to them, and sapping taxpayers' incentives to organise to make themselves heard. The belief that enhanced aid can be accompanied by improvements in its effectiveness is also dubious. Nothing is more detrimental to effectiveness than pressure to spend. It will sacrifice quality for quantity - as the need to keep funds flowing pushes cool evaluation aside, country selectivity is eroded, and substantial amounts are thrust into fiscal systems that fail to provide even rudimentary assurance extra funds will be used in ways that donors would wish. Finally, increased aid, which will entail rich nations providing what for them is small change, might become an excuse not to tackle trade issues which would make a greater impact.

Tony Killick