Does Africa need Aid

1
Does Africa need Aid?

• Doubling aid conference,
• Brussels, June 14 2005
• By Ambassador Deo. Rwabita

2
Agenda

• Introduction
• The Triangle Trade
• Positive Trend
• Concerns about Aid

3
The Triangle trade
Developed countries
Slaves/ Raw materials
aid
capital
profits
WB
Multinationals
Africa
Payment of debts and interests
Loans
IMF
4
Closing the gap

• Developed countries to release substantial Aid, a
  Masteral Plan for Africa.
• Cumulative debts and interest from WB and IMF and
  other financial institutions should be cancelled.
• For example, reports from UNCTAD indicate that
  between 1970 and 2002, Sub-Saharan Africa
  received 294 billion from developed countries
  but had to pay 268 billion leaving a difference
  of only 26 billion. This is a reverse transfer
  of resources to the creditors.
• Developed countries should open their markets for
  African products with minimum Non-Tariff Barriers
  (NTBs) and reduce their agricultural subsidies to
  their farmers to create competitiveness.
• Increase funding for meaningful capacity
  building. It is recorded that Aid given to
  Africa 40 comes back to developed countries as
  consultancy fees, purchase of vehicles, computers
  etc.

5
Closing the gap

• What is needed in Africa are basically 3 things
  - Investment, Trade and Tourism (ITT). After the
  WB and IMF structural adjustment, the private
  sector has no resources to invest.
• In order to reduce poverty in developing
  countries, micro financing should be supported so
  that the majority of the poor can access funding,
  as they do not have collateral assets for
  commercial loans with very high interest rates of
  16 to 25.
• There is need for more funding for prevention and
  treatment of patients from the pandemic disease
  HIV/AIDS and other killer diseases, malaria and
  TB.
• There is no development without peace. Unless
  violence and civil wars are reduced, Africa will
  continue to lag behind in development. While the
  developed countries are worried about weapons of
  mass destruction, for Africa the infiltration of
  small arms is massively killing Africans and the
  money that would be for development is spent on
  purchase of arms for the citizens to kill each
  other.

6
Positive trends

• Concern for Africa
• The Davos meeting of the G-8 initiated by Prime
  Minister Blair is concentrating on Africa and
  Climate Change.
• Mr. Blairs African Commission is meant to look
  for ways and means of reducing poverty in Africa.
  
• President Chirac of France and Mr. José Manuel
  Barroso, President of EC, have suggested an extra
  1 on aviation fuel and travel tickets. That
  these would raise over 30 billion that can be
  used by the developing countries.
• Control of HIV/AIDS and other diseases
• There is a strong opinion that cancelled debts
  should be used to control AIDS and render other
  social services education and health services.
• Pledges for AIDS Global Fund are now at 8
  billion and WHO is already implementing the 3-5
  policy.
• The USA government under President Bush has
  pledged 15 billion for 5 years to buy ARVS for 2
  million AIDS patients and prevent 7 million new
  infections.
• Mr. Bill Gates of USA Microsoft Company has
  pledged 750 million for child immunisation.

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Concerns about aid

• Africa appreciates those countries and companies
  that have made pledges to increased Aid to
  Africa. However, there is the concern of the
  capacity to absorb these funds.
• Many donors concentrate on humanitarian
  assistance but this soon ends in a bottomless
  pit. We need more funds for Investment and Trade
  and build capacity in several sectors that will
  boost production, marketing of products and
  services.
• There is need for proper transparency and
  accountability of the donor and recipient
  governments. There is always an outcry of
  corruption and embezzlement of such funds.
• Yes Africa needs more Aid,
• but it needs proper planning, monitoring and
  implementing projects that will result in a
  positive multiplier effect for general
  development.

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Thank you for your attention