WHAT IS THE DEVELOPMENT ASSISTANCE COMMITMENT?

At the Gleneagles Summit, the US committed ‘to double aid to sub-Saharan Africa between 2004 and 2010. It has launched the Millennium Challenge Account, with the aim of providing $5 billion a year, the $15 billion Emergency Plan for AIDS Relief, an initiative to respond to humanitarian emergencies in Africa of more than $2 billion in 2005 and a new $1.2 billion malaria initiative. The US will continue to work to prevent and mitigate conflict, including through the five-year, $600 million Global Peace Operations Initiative’.

Based on this commitment in Gleneagles, the US has committed to increase ODA to sub-Saharan Africa from $4.4 billion in 2004 to $8.8 billion in 2010.

OVERALL ASSESSMENT

US ODA to sub-Saharan Africa rose by 26% in 2008, a significant amount that outpaced global ODA growth of 16%. The US is now solidly on track to meet and exceed its 2010 target, perhaps one year ahead of the target date. While ODA increases in 2009 for sub-Saharan Africa may not match the level achieved in 2008, projections of ODA disbursements remain robust, with solid increases expected for health programmes, Millennium Challenge Corporation compact countries and ODA delivered through multilateral channels.

The US remains a clear leader on programmes to fight malaria and AIDS, as well as having increased ODA for agriculture significantly in the past three years. Recent appropriations and proposed budgets for other development sectors are promising and are likely to result in higher ODA disbursements in the future. However, the US remains below target in some sectors, especially in the areas of education and water and ranks sixth among the G7 on ODA effectiveness.

President Obama has committed to double foreign assistance by 2015. ONE looks forward to learning how much of this will be directed to sub-Saharan Africa.

LOOKING AHEAD

Despite small increases in ODA to sub-Saharan Africa during the two years following Gleneagles, the strong growth in 2008 and a robust pipeline have put the US in a position to meet its commitment to double ODA to sub-Saharan Africa early – perhaps in 2009 and almost certainly in 2010. The increasing disbursement levels for HIV/AIDS, malaria and humanitarian relief will continue and will be augmented in 2010 by growing expenditures by the Millennium Challenge Corporation. Last year, Congress approved a $48 billion, five-year extension of the PEPFAR initiative, more than triple the previous level.

The commitments and policies made in the early days of the Obama Administration further reinforce the prospects that US development assistance to sub-Saharan Africa will continue to rise at least for several years beyond 2010. President Obama has pledged to double foreign assistance by 2015. The President's budget for FY2010 proposes an 8% increase for foreign assistance, and at least 10% more for sub-Saharan Africa. As announced at the G20 summit, the President's budget includes a doubling - to more than $1 billion – of US investment in agricultural development. The budget further proposes increased funding for education, climate change and global health.

The Obama Administration has endorsed the Millennium Development Goals as 'America's goals'. No region is further from achieving these goals than sub-Saharan Africa. ONE looks forward to learning how much of the promised doubling of foreign assistance will be allocated to Africa.

SEE THE ODA CHART

US ODA to sub-Saharan Africa and 2010 target

Click to enlarge
 

IS THE US DOING ITS PART TO MEET THE G8's SECTORAL COMMITMENTS?
 

ON TRACK
AGRICULTURE
  • Even prior to the Hokkaido commitment to reverse the decline in funding for agriculture, the US had fulfilled its commitment with a small but steady increase in sub-Saharan Africa from 2004 to 2006, and a significant increase - $342 million, or 176% - from 2006 to 2007, to $537 million. The large growth in 2007 came largely from increased spending for agricultural inputs, policy and research.
  • While the US has increased agriculture development resources for sub-Saharan Africa in recent years, food aid to the region continues at much higher levels. In 2007, US food aid totalled $1.39 billion in the region, a level that is likely to grow in 2008 and 2009. Globally, the US provided about $2 billion in its overseas food aid budgets for fiscal years 2008 and 2009, about 75% of which will be channelled to Africa.
  • In March 2009, President Obama committed to working with Congress to double US funding for agriculture to more than $1 billion in FY2010. The President said that this money would support medium- and long-term initiatives in 25 countries and eight regions, including Kenya, Uganda, Zambia, Malawi and other nations in eastern and southern Africa.

OFF TRACK
DEBT
  • Along with other G8 countries, the US agreed to cancel 100% of qualified debts for the poorest countries, first through the HIPC and then through the MDRI process.
  • An important measure of progress on debt is the extent to which donors fulfil their commitments to compensate the IFIs for lost reflows due to lost revenue from debt servicing. The US is on track with such commitments.
  • The US has committed to contribute $2.19 billion between 2006 and 2019 to compensate IDA for reflows lost due to the 2005 multilateral debt cancellation agreement, MDRI. As of 30 June 2008, the US had made an unqualified pledge of $231.8 million. Consequently, it is off track, as over 20% of the time period has already passed and only 11% of the compensation has been paid in.
  • The US has made qualified pledges of $7.21 billion through to 2044. Taken together with the unqualified pledges, this adds up to $7.44 billion. The target contribution through to 2044 is $7.62 billion, leaving a minor shortfall of $184.11 million.
  • The US has cancelled 100% of bilateral debt owed by completion point HIPC countries. This includes 100% of its post-cut-off-date commercial debt.
EDUCATION
  • The US committed $259 million to primary education in 2007. This is far below its proportionate share to achieve Universal Primary Education (UPE) in Africa, which would have required $1.074 billion from the US in 2007.
  • Although US spending globally on primary education has increased substantially in recent years, spending in Africa has only increased by about $42 million in total since 2004. Most of this funding has been directed to programmes such as the African Education Initiative, which provides teacher training, scholarships, textbooks and other learning materials.
  • In the FY2009 omnibus spending bill, Congressional appropriators allocated $700 million to basic education globally, of which $240 million was recommended to be allocated to countries with education plans endorsed by the Fast Track Initiative. President Obama's FY2010 budget proposes $981 million in global education but it appears that countries in sub-Saharan Africa will not be the main beneficiaries of this increase.
TRADE
  • The Africa Growth Opportunity Act (AGOA) provides more than 90% duty-free access to the US from 40 African countries (including non-LDC African countries). Nevertheless, some key African exports, such as sugar and peanuts, are limited by quotas and high tariffs. To date, petroleum products have been the biggest component of AGOA benefits. AGOA has also created approximately 100,000 new jobs in the export apparel sector, of which 75%-90% have gone to impoverished women.
  • In 2005, at the WTO Ministerial meeting in Hong Kong, the US announced that it would double its contributions to global aid for trade, from $1.3 billion in 2005 to $2.7 billion by 2010. According to OECD estimates, aid for trade funding for Africa surged from an average of $580 million between 2004 and 2006 to $1.57 billion in 2007.
  • The US spent approximately $31.6 billion in subsidies to support its farmers in 2007, according to the OECD. The US recently had the opportunity to reform its Farm Bill, the legislation that determines the spending levels on agricultural subsidies. However, the new 2008 Farm Bill did not fundamentally change the US domestic subsidy programme.
  • In February 2009, President Obama pledged to gradually phase out direct payments to domestic farmers, and followed this with a modest cut in the proposed budget for FY2010. However, this has been met with strong domestic opposition, making it increasingly unlikely that he will be able to follow through with his pledge.
WATER AND SANITATION
  • As it lacks a clear commitment, ONE interprets the G8 statement on water and sanitation to mean that a donor should direct 5.5% of its ODA to sub-Saharan Africa to the sector. Among G8 donors, the US lags the furthest behind in its percentage contribution of ODA to sub- Saharan Africa to the water and sanitation sector. In 2007, the US spent $181 million on water and sanitation, only 2.11% of its ODA to the region.
  • According to the methodology used in this report, the US would have needed to direct an additional $291 million towards water and sanitation in sub-Saharan Africa in 2007 to be on track to meet the 5.5% target.
  • Outside of sub-Saharan Africa, especially in the Middle East, the US provides considerable amounts of ODA to water and sanitation. While bilateral water and sanitation commitments to sub-Saharan Africa in 2007 accounted for 7.4% of bilateral global amounts, programmes in the West Bank/Gaza and Jordan alone represented 8.4% of the total. Iraq, the largest recipient of water and sanitation funds, accounted for 45% of bilateral commitments.

PROGRESS REPORT
HEALTH
  • Total health sector spending from the US for sub-Saharan Africa in 2007 was $3.43 billion, a 67.5% increase over 2006 and a $2.1 billion (154%) increase over 2004. The US is the largest G7 donor of health ODA to Africa, accounting for 59% of all health ODA from G7 countries.
  • Of total 2007 health spending, the US committed $3.11 billion (91.69%) to infectious diseases; $203.14 million (5.93%) to reproductive health; $61.50 million (1.79%) to health systems; and $54.46 million (1.59%) to basic health. For polio, it contributed $133.05 million to the Global Polio Eradication Initiative in 2007, and $129.75 million in 2008.
  • The US pledged $840.3 million to the Global Fund in 2008, while actually transferring $808.1 million. For FY2009, the Global Fund appropriation grew to $900 million, the same level as currently proposed for FY2010. At the time this report went to print, the US Congress was considering an additional $50-$100 million contribution to the Global Fund for FY2009.
  • In July 2008, Congress enacted the Tom Lantos and Henry J. Hyde United States Global Leadership against HIV/AIDS, Tuberculosis, and Malaria Reauthorization Act of 2008, which authorised $48 billion for HIV/AIDS, tuberculosis and malaria from 2009 to 2013. The goals of the Lantos Hyde Act are to prevent 12 million new HIV infections, and to provide treatment for at least 3 million people and care for 12 million.
  • The FY2010 budget proposes $8.6 billion in global health spending, an increase of $459 million (5.6%), from amounts estimated for this year.
  • For the longer term, President Obama has pledged to seek $63 billion for global health over the next six years.