Official aid still critical to poorest nations - Report
Accra, Aug. 11, GNA - Official aid and private charitable donations from developed nations continue to be the main source of external financing for poorest countries, the 2005 Millennium Development Goals report has said.
The report made available to the Ghana News Agency (GNA) on Thursday said aid would, therefore, be critical for Least Developed Countries (LDCs) in the ensuing years.
For middle-income countries, it noted that trade was the primary source of foreign revenue with private foreign direct investment ranking second.
However, this is partially offset by the return of profits to the corporations' home countries.
"In low income countries, higher levels of aid are needed to overcome disease, illiteracy and lack of infrastructure. "Until such handicaps are overcome, these countries will not be able to attract investment or compete in world trade," the report said. It said fairer access to markets of rich countries would help these nations gain a foothold in a competitive global economy, which would also help middle income countries where trade in commodities and manufactured goods was already important.
The report said even though development aid had reached an all-time high, it remained at a historically low level as a share of donor countries' income.
"Official aid has recovered from its decline in the 1990s, reaching a record high of 79 billion dollars in 2004."
The report said donors had pledged to raise aid by an additional 20 billion dollars by 2006 but despite such a recovery, aid was still equivalent to just one quarter of one per cent of donor countries' national income.
"If all new commitments are honoured, aid is expected to exceed 100 billion dollars by 2010.
"Still this falls short of the amount widely considered necessary to achieve the Millennium Development Goals," it said.