Aid to EAC out of step with citizens’ needs

East Africa received nearly $9bn in aid in 2011, with the biggest chunk channelled to health. But this spending is out of step with East African citizens’ priorities: Jobs, income and infrastructure. TEA Graphic  Nation Media Group

By JOINT REPORT The EastAfrican

In Summary

• Survey reveals that the opinion of “recipient” countries is rarely sought when donor countries structure aid packages.
• Health concerns have remained more or less constant (at just 5 per cent and 6 per cent of all responses) over the past decade despite massive investments by national and donor governments and steady improvements in national health indicators.
• Inadequate infrastructure such as roads, railways and airports is a major problem holding back development in the East African region. All the EAC member states cite infrastructure as a priority for rapid economic growth.

 

East Africa received nearly $9 billion in aid in 2011, with the biggest chunk channelled to the health sector. But this spending is out of step with what East African citizens say are their priorities: Jobs, income and infrastructure, an analysis of two new reports shows.

According to a report by Development Initiatives (DI), a poverty-focused NGO, more than a quarter of the official development assistance reaching East Africa, with the exception of Burundi, goes to health.

Uganda leads in the proportion of aid going to health, at 29.1 per cent. But, in absolute figures, Kenya received the largest amount of aid to health at $749 million, or 27.6 per cent of the total aid.

In Tanzania, $705 million (or 28.4 per cent of total aid) went to the health sector in Rwanda, $322 million (25.5 per cent ) and in Burundi, $101 million (17.6 per cent).
 

At the regional level, however, ordinary citizens have consistently failed to cite health and education as a top tier problem.

ALSO READ: Donors change tack in health funding

A working paper from the Centre for Global Development (CGD) assessed data from the past five rounds of the Afrobarometer survey, a public attitude survey which gauges what people believe to be the most pressing problem in their country.

All the East African countries cited jobs, income and infrastructure as their first tier concerns, with the exception of Burundi, where inequality, poverty and security are the primary concerns. The latest survey was conducted in 2011/2012.

In Uganda, only 8 per cent of the US development aid addressed the country’s top three priorities while Tanzania had 42 per cent of the US aid addressing its top three priorities, which are the highest level among its peers.

Health concerns have remained more or less constant (at just 5 per cent and 6 per cent of all responses) over the past decade despite massive investments by national and donor governments and steady improvements in national health indicators.

Why then the insistence on the spending in health? The working paper from CGD reveals that the opinion of “recipient” countries is rarely sought when donor countries structure aid packages.

“The global health community has outsized influence in the US legislative system. A highly effective and outspoken ecosystem of organisations regularly lobbies to secure robust funding for global health priorities, such as HIV/Aids, family planning and child vaccinations,” the report says.

“On the other hand, there are few political champions for those issues that top the list of citizens’ priorities in sub-Saharan Africa or Latin America, such as jobs/income, security or infrastructure.”

There could also be a “built-in bias” towards more straightforward aid models in which a clear relationship between inputs and outcomes is easier to demonstrate, such as by providing lifesaving medicine or immunisation.

“By contrast, issues such as private sector development and employment opportunities have received less donor attention, partly due to their complexity, dependence upon benign or supportive domestic political economy conditions, and difficulty in establishing concrete linkages between assistance activities and policy and development outcomes,” the paper states

Jason Braganza, a senior analyst at DI, said that this disproportionate focus on health by donors was worrying.

“It could be argued that targeting aid to a specific sector is good because it secures funding for that particular sector,” he said. “But I also worry that regional governments are becoming lax in planning for resources, knowing that the money will be provided by donors. If the donors stop funding health in East Africa today, how will we cope?”

The report by DI titled Investments to End Poverty bundles aid spending into various categories, showing that not all of what is reported as “aid” is actually money.

“When people think of aid they normally just assume it’s a chunk of cash. But there are different types of aid, and to properly assess the impact we have to unpackage what sort of aid is being referred to,” Mr Braganza said.

The DI report reveals that some of what is reported as aid is money, either in grants or loans and equity investments. Other aid reaches East Africa in the form of commodities and food, people — consultants and staff providing technical advice and training.

Some parts of the aid bundle never leaves the donor country. Debt relief, for example, is money that stays in the donor country but is still reported as aid spent on developing countries.

In the case of Kenya, the bulk of spending in the health sector is classified by DI as “mixed project aid,” which is a combination of cash and in-kind resources.

“In health, this means spending on things like medicine, clinics and hospital equipment. Donors are covering almost the entire development expenditure in the health sector, and this is a cause for concern,” said Mr Braganza.

Another mismatch arises when donor spending in specific health sub-sectors is analysed. For example, the US gives far more official development assistance to HIV/Aids projects than to malaria in most African countries, despite the fact that malaria is a much larger public health problem than Aids in many countries.

The component of aid categorised as “technical co-operation,” or the direct supply of experts, consultants, teachers, researchers and volunteers by donor agencies features prominently in the region, particularly in Rwanda, Burundi and Uganda, in the governance and security sector. But the fact that aid is normally assessed from the perspective of the donor makes it difficult to determine the real value of this component.

“If as part of technical co-operation, a donor spends $50,000 on hiring a consultant, flying him (or her) to Africa and paying hotel bills, etc then the donor will call that $50,000 of aid in kind. But if the recipient country hired a consultant of equivalent quality for $20,000, then would the aid be worth $50,000 or $20,000? Would the donor have been better to send cash and let the recipient hire their own consultant?” Mr Braganza asked.

“When assessing aid, the question we need to ask is — to put it bluntly — is a dollar of aid, as valued by the donor, really worth a dollar to the recipient?”

The working paper from CGD reveals, however, that the African Development Bank (AfDB) is significantly more aligned with what Africans cite as their nations’ most pressing problems. On average, 48 per cent of its portfolio has directly addressed the top three concerns cited in Afrobarometer surveys, compared with only 26 per cent for US assistance.

Moreover, 70 per cent of its assistance aligns with people’s top five concerns compared with 56 per cent for US programmes.

According to the CGD report, “AfDB greatly focuses on the private sector (jobs/income), infrastructure, and economic and financial management policies, which register as top citizen concerns in nearly every African country,” reads part of the report.

Collectively, these three areas have accounted for over 90 per cent of AfDB assistance to the featured countries.

In Kenya, AfDB scores a 31 percentage point difference, compared with the US, while in Uganda, it scores a 34 percentage point difference. In Tanzania, the US beats AfDB at 3 per cent.

ALSO READ: Dar set for new US aid as rest of EA loses out

In October, AfDB approved a grant of $7.5 million to finance the Comesa-EAC-SADC Tripartite Capacity Building Programme (TCBP).

The programme aimed at supporting intra-tripartite trade growth, which is instrumental in boosting the economic welfare of more than 587 million consumers in the 26 tripartite countries through the removal of barriers to movement of goods and services, development of regional value chains, job creation and poverty alleviation.

Most pressing

At the aggregate level, only 16 per cent of US assistance has been focused on what Africans cite as their most pressing problems (jobs/income and infrastructure). Instead, 60 per cent of it has gone to health, security, education and governance.

The percentage of US commitments to jobs and income-related issues has declined since 2009 despite a ramping up of USAid’s Feed the Future programmes, falling from 11 per cent to 6 per cent in 2011.

Kenya has received roughly $5 billion in US development commitments, making it the largest regional recipient of US development dollars. During this time, Kenyans cited three national problems as their priorities: Jobs, infrastructure and macroeconomic policies. But in the past decade, only six per cent of US development aid has been focused on these issues.

The country’s Second Medium Term Plan 2013-2017 (MTP) of Vision 2030 gives priority to devolution and increasing the scale and pace of economic transformation through infrastructure development.

Inadequate infrastructure such as roads, railways and airports is a major problem holding back development in the East African region. All the EAC member states cite infrastructure as a priority for rapid economic growth.

By Christine Mungai and Scola Kama