Foreign Aid Dry Up In Africa
11/30/2010 10:52:07 AM -
Foreign aid inflow from donor countries are drying up and in the next 15 years, many poor African countries may not be able to access the window, Chief Economist of the African Development Bank Group (AfDB) Professor Mthuli Ncube has stated.
He attributed the new trend to several economic factors that are re-defining economic relations around the world, including the economic recession in Europe and America and Africa's new economic partnership with China.
Economic recession has forced some European countries like Britain, France, Germany, Ireland, Greece and Portugal to adopt austerity measures, with rising concerns that immigration and development budgets may be stifled.
From 1960 to 2008, foreign donors pumped over $650 billion in aid into the continent with a population of about one billion people.
But Global Financial Integrity put the total capital flight from the continent from 1960 to date at $844 billion.
Professor Ncube told some selected economic and financial journalists from Africa who attended a seminar in Tunisia that African countries must focus on building infrastructure and strengthening intra-continent economic ties.
China, he said, has introduced a new model to aid through its policy of 'resources for infrastructure'.
The Chief Investment Officer at Private Sector Department of AfDB, Godfrey Mwindare said the entrance of China into Africa would create competition and fair deal, and that the continent is not currently benefitting from its extractive resources.
Africa's trade with China doubled every three years since 2000 and hit $107 billion in 2008, eclipsing the United States as the biggest trading partner.
Trade with China fell to $90 billion in 2009 because of the global recession. But the US Commerce Department said trade ties with Africa fell from $141 billion in 2008 to $86 billion in 2009.
Some 800,000 Chinese workers are now in Africa, according to a website that focuses on China in Africa, www.saiia.org.za.
Contributing, the top economist and former CEO of France's international development agency, the Agence FranÃ§aise de DÃ©velopement Jean-Michel Severino, in a pressÂ conference on Friday, said Africa has come of age to decipher its needs and that the era of compassionate aids were over.
AfDB which is made up of 77 member countries is championing Africa's development, having supported 3,300 projects so far.
But it is worried that corruption has cost the continent about 25 per cent of its Gross Domestic Product (GDP) or about $300 billion.
By Felix Dela Klutse