It now looks as if sub-Saharan Africa will receive just half of the $25 billion in new foreign aid that was pledged for 2010 by wealthy nations at the Gleneagles Summit in 2005. Fifteen European countries pledged to increase their aid to 0.51% of GDP, but only nine of them will meet this target. Britain is expecting to increase its aid to 0.56% of GDP this year, despite the problems caused by the global economic crisis.
Britain does not provide budget support to Kenya because of concerns over government corruption, and British aid to Uganda has been frozen at 2007/8 levels, so the increase in East African funding is going to Tanzania. Unfortunately the latest indications from Tanzania are that aid is not working well there, either. In polite terms, “stated priorities, budget allocations and actual spending are not well aligned”.
Like many aid recipient nations, Tanzania suffers from sustained lack of financial discipline in the treatment of donor funds, and donors have not taken adequate steps to ensure proper use of funds. Foreign aid accounts for 10% of the country’s GDP and 40% of the government’s budget. Aid recipient countries often have trouble receiving and dealing with foreign aid when it accounts for more than 10% of the government’s budget.