Financing Africa’s Future: The Fight Against Poverty
ONE’s 2014 DATA Report finds that many developed and developing country governments are breaking their promises to the world’s poorest people
Governments of both rich and poor countries must urgently address serious shortfalls to ensure the very poorest people are at the heart of a renewed global drive against poverty from 2015, according to a report published today by The ONE Campaign.
Important progress has been made: the proportion of people living on less than $1.25 a day has halved in the last 20 years. Yet with a new blueprint for development on the horizon in 2015, leaders risk losing an historic opportunity to end extreme poverty by 2030, unless they deliver on financial commitments.
According to 2014 DATA Report “Financing Africa’s Future: The Fight Against Poverty”, the majority of donors failed to meet their aid pledges. Although some governments deserve praise for stepping up aid efforts – such as the UK, Japan, Germany, and Norway – other countries, including France, Canada, Australia and the Netherlands, showed marked declines. Collectively, the European Union fell short on its aid commitments by $52.5 billion in 2013.
In addition, not enough of total aid was concentrated on the countries most in need. Only one third of life-saving aid goes to least developed countries (LDCs). Increasing this amount to 50 per cent would see an additional $22 billion reach the most vulnerable people.
Sara Harcourt, Policy Director of Research and Publications for ONE and an author of the report, said:
“Next year, we want world leaders to agree an ambitious and inspiring set of development goals that deliver for the very poorest. We need an equally ambitious plan to finance them. Both donor and African countries must play an equal part in meeting their commitments and empowering those on the frontlines of poverty.”
African governments are also failing to prioritise their spending on the essentials that could save lives and boost the fight against extreme poverty. Only six of 43 countries have met their own spending goals on health, and only eight met their goals on agriculture . Between 2010-2012 an additional $54.8 billion would have been mobilised for health if all sub-Saharan African countries had met their promises.
Dr. Sipho Moyo, Africa Executive Director at The ONE Campaign said:
“First and foremost, public spending by African governments should be targeted towards the fight against poverty. In this regard, spending on agriculture is critically important for unlocking value chains, thus creating decent jobs and viable business opportunities, helping to secure a future for millions through inclusive economic growth.
“Equally important is the need to increase public investments to build resilient health systems that will save lives and help countries prevent crises such as the Ebola outbreak devastating West Africa today.”
The report also highlights the outdated rules on what counts as aid. The way official development assistance (ODA) is measured must be refined and improved. Since 2000, $250 billion, or a sixth of the total aid reported by governments, did not involve a real transfer of funds to developing countries. ODA levels have been given an artificial boost by including inflated valuations of debt relief, plus money spent by donors at home. ONE is also calling for more stringent guidelines on which loans to developing countries count as aid; if these had been in place in 2012, $19 billion of loans would not have qualified as aid.
2015 is an opportunity to deliver for the very poorest and most vulnerable and to help developing nations transform their economies so that citizens everywhere can lead their lives with dignity. The key recommendations of the 2014 DATA Report are:
- It’s time donors made good on promises: Donor governments must meet their commitments on overseas aid and target half of all aid to least developed countries.
- African governments must meet their own pledges on health, education and agriculture spending: building the vital infrastructure that would equip them with the tools to address crises swiftly.
- The rules on aid need to change: When DAC members agree on a new definition of ODA, they must ensure it reaches and empowers those who need it the most.
This report covers official public sector development finance and related commitments. Next year’s Third Financing for Development summit in Addis Ababa, Ethiopia will cover all financial flows related to development finance, including private investment, remittances, trade and climate finance.
 On average in 2010–12, only six of 43 countries in sub-Saharan Africa met the Abuja commitment to allocate 15% of their national budgets to health. (Source: WHO, Global Health Expenditure Database: National Health Accounts Indicators) On average in 2008-10, only 8 countries met the Maputo agriculture target of spending 10% of national budgets on agriculture. (Source: S. Benin and B. Yu (2013) ‘Complying with the Maputo Declaration Target: Trends in public agricultural expenditures and implications for pursuit of optimal allocation of public agricultural spending’, ReSAKSS Annual Trends and Outlook Report)
 An Organisation for Economic Coordination and Development (OECD) Development Assistance Committee (DAC) Senior Level Meeting is taking place on October 7-8. This meeting is to advance discussions on ODA modernisation, the scope of a new concept of ‘total official support for development’ and a recipient’s receipts measure.