For the Guardian report (see http://tinyurl.com/3k99aa9.
Whether one regards official development assistance (ODA) as "aid" in the traditional sense, or as part of the shared obligation for spending on global public goods, both critics and proponents of aid should be able to agree on the need for more transparent tracking of what is being spent where and with what results. Since the Paris Declaration on Aid Effectiveness in 2005, the efforts to track such spending and improve accountability have multiplied. The 4th High-Level Forum on Aid Effectiveness will be held in Busan, Korea from 19 November to 1 December this year.
While much of the language of both official reports and of the critiques is obscure, the availability of more detailed data and analysis does have the potential to be used by both internal and external critics to campaign for greater accountability. Donor "spin" will without doubt continue, but it is increasingly possible to go beyond abstract debates about "aid" to focus on what works and what doesn't.
This AfricaFocus Bulletin contains a short article from the UN's Integrated Regional Information Service (IRIN) citing recent reports questioning the transparency of aid reports, and excerpts from a new report by ActionAid, which has a critique of the G8 Accountability Report with respect to the pledges made on on food security at the 2009 G8 Summit, the L'Aquila Food Security Initiative.
Selected recipient country and donor case-study evaluations being prepared for the Busan Forum are available at http://www.oecd.org / Direct url: http://tinyurl.com/3v4ezbl African countries included to date are Benin, Cameroun, Ghana, Malawi, Mali, Mozambique, Senegal, South Africa, Uganda, and Zambia.
Dakar, 31 May 2011 (IRIN) - Poor-performing donors were lambasted by UK Prime Minister David Cameron at this year's G8 leaders' meeting for failing to move towards meeting 0.7 percent [of gross national income] aid targets; but most major donors are to blame for tying aid to donor-based contractors, say aid watchdogs, and for reporting money spent at home as aid.
AidWatch (http://aidwatch.concordeurope.org/), a group of European aid experts representing 1,600 NGOs, estimates European Union members reported US$7.4 billion (EU5.2 billion) in inflated aid in 2010 - that is, the money was actually spent on debt cancellation, on foreign students, and on refugees in donor countries.
This is equivalent to almost 10 percent of the total aid provided that year.
Donors may report the first year of housing costs for refugees, and costs spent on foreign students, as part of official development aid (ODA).
In 2009 - the most recent year for which data is available - the US reported the highest volume of aid on refugees at home ($740 million), while Canada and France reported the highest percentages of their overall aid (6 and 4 percent, respectively) on refugees at home, according to Josh Lozman, chief of staff at aid watchdog ONE.
France, Germany and Canada, the only G8 countries that report foreign student costs as part of ODA, spend 14, 8 and 9 percent respectively.
A significant proportion of the rest is tied - that is, spent on consultants and contractors from donor countries, said Karin Christiansen, director of NGO Publish What You Fund ) http://www.publishwhatyoufund.org/).
Much progress has been made to untie aid: several large donors have stopped formal aid-tying, including the UK, Canada, Denmark, Australia, Norway and Switzerland; while bilateral untied aid grew from 46 percent to 76 percent as a proportion of all aid between 2001 and 2007, according to the Organisation for Economic Cooperation and Development's Development Assistance Committee (OECD DAC).
But these figures exclude food aid and 'technical assistance'. When these sectors are included, 17 percent of all OECD aid was tied in 2009, according to ONE; the biggest offenders being Italy at 38 percent; the US at almost a third; and Germany at 27 percent.
Even when aid-tying is banned, contracts can still easily end up in the coffers of companies from donor countries, according to Christiansen. A study of UK contracts awarded in 2009 said 65 percent were awarded to UK companies.
Aid-tying makes the aid 30 percent more expensive, said Christiansen. "Tied aid is like a form of subsidy. Even if you're less efficient, you'll get the contract," she told IRIN.
"Untying aid is about allowing greater efficiency and flexibility to aid recipients, increasing country ownership over development," said Lozman. "It is also more cost-effective."
Analysts also take issue with debt relief being included as part of official development aid figures, said Franz Berger, coordinator at AidWatch.
Many donors include past, current and future interest payments in their aid figures, which distorts reality, he said. "ODA is presented as money to lift the poor and marginalized out of poverty, but debt relief is not a transfer of resources to a developing country - so it should not be included."
In the end, aid figures vary wildly depending on who is reporting them and how. In the pre-G8 accountability report, leaders claim to have fallen short of 2005 Gleneagles aid commitments by just $1 billion per year; while the OECD DAC estimates they were $22 billion short - the difference, says Berger, is that donors did not take into account inflation.
Spending aid at home, and aid-tying are unlikely to disappear soon, said Christiansen, but more open reporting of aid figures would at least enable a more honest debate, and less quibbling over numbers. "This is why we need transparency - so we can have a genuine conversation about the numbers"; We can't influence decision-making around spending, if all the information is based on hunch and rhetoric."
Donors pledged to improve transparency as part of a wider agenda to improve aid quality when they signed up to the Paris declaration on aid effectiveness in 2005, and the follow-up Accra Agenda for Action in 2008.
In the future, she hopes to see links between donor aid spend on projects and procurement databases, so people can examine exactly where the money is going; how much is tied; and how efficient the procurement is. "We can then shift from endlessly arguing over which numbers are accurate, to having a far more interesting conversation: Is the aid actually working?" she said.
There has been progress, said ONE's Lozman. Donors now report on 'country programming aid' (CPA) - or aid that can be programmed in-country; and as a proportion of total G7 official aid CPA has increased from a third in 2005 to 61 percent in 2009.
G8 leaders stressed aid transparency and accountability at this year's summit, stating in a communiqué "We will improve transparency of our aid information. In particular, we will make further efforts on publishing information on allocations, expenditure and results."
ONE and Publish What You Fund welcome these commitments. But Luca De Fraia, global governance expert and NGO ActionAid's deputy director in Italy, stresses donor accountability must focus as much on recipients as on taxpayers at home.
Donor rhetoric over recent months has emphasized accountability to taxpayers - as evidenced, for example, by several statements by European Development Commissioner Andris Piebalgs; and a preG 8 communiquéfrom President Barack Obama and UK Prime Minister David Cameron.
What is lacking, according to Da Fraia, is a process by which donors are held accountable when they fail on their promises. "The system now is very unbalanced," he said, calling for sanctions on donors whose aid projects cannot be accounted for.
These questions and others will be debated at the fourth high level forum on aid effectiveness to be held in Busan, South Korea, at the end of 2011.
Two Years On: Is the G8 Delivering on its L'Aquila Hunger Pledge?
Following the 2007-08 food crises, donors made an important 'Hunger Pledge' to the worlds poor. At the 2009 G8 Summit in L'Aquila, Italy, donors launched the L'Aquila Food Security Initiative, backed by 27 countries and 14 international agencies. Within this, donors pledged to mobilise US $22 billion over three years in support of country-led plans for agriculture, with a 'coordinated, comprehensive strategy'.
Two years on, with food prices reaching record levels, the world stands on the precipice of another food crisis. With only one year left to deliver, the G8 and other L'Aquila donors have launched their accountability report with a focus on progress towards goals set in L'Aquila on food security and on global health. This is the report where the G8 and other donors are to account for progress on their 'Hunger Pledge'. At face value, the report says that the G8 is broadly on track. However, an analysis of the data reveals that this is extremely difficult to justify with any certainty: because it is nearly impossible to rate countries' relative performance due to inconsistent and erratic reporting methods.
ActionAid believes that the accountability process is severely undermined by a lack of transparency on how much countries have spent and a lack of consistency in measuring progress and timelines. A few donors -- the EU, Germany and Japan -- are not even able to account on their expenditure to date and are still only reporting on what they have committed to doing. Moreover, the accountability report shows that around two-thirds through the pledge only 22 percent has actually been spent.
Meanwhile, some countries, such as Italy and Germany, are reporting against progress on projects and items which were outside of their original pledge. This suggests that governments are re-categorising commitments, in order to mask their lack of progress. Moving the goalposts halfway through the game is not fair play.
Accountability also involves transparency and reflection on failures, as well as on achievements. Few donors are openly admitting shortcomings. The US government is one of the few exceptions: not only is the US being clear in its reporting but they are also being transparent about their disbursement delays.
France, who this year is hosting the G8 and G20, appears to be trying to mask their poor performance behind some bad reporting. Following their moderately good L'Aquila pledge to agriculture, they are now failing to deliver it, with less than 50 percent of their commitments being spent two-thirds of the way into the pledge timeline. Not meeting these hunger commitments could undermine President Sarkozy's credibility in championing G20 action on food price volatility and food security this year.
But perhaps of greatest concern is the lack of concrete evidence of progress towards achieving several of the core components of the pledge: increasing aid to agriculture, through support of country-led agriculture plans that target the needs of small holder farmers. Progress on the pledges of aid to agriculture are by far the most off-track; with delivery being particularly slow compared to spending on other categories of aid for food security. For instance, Italy has actually had a cut of 56 percent in their agricultural aid spending since L'Aquila.
With the world just one bad harvest away from another food crisis, we need urgent injections of funding and donors to make good on their promises, not clever accounting.
Moreover, the effects of increasing food prices on poverty are extremely alarming. The World Bank estimates that high food prices have pushed 44 million people into extreme poverty in low- and-middle income countries, and warns that food prices are at 'dangerous levels'.
Indeed, the investment that donors have delivered on -- while far from sufficient -- is helping to mitigate the impacts of the crisis.The evidence that increased investment in agriculture over the last few years has helped to minimise Africa's exposure to the recent surge in global food prices should spur greater action and ambition from donors. Countries such as Rwanda and Malawi, which have recently increased government support to smallholder-based agriculture, are reporting stable local food prices and abundant supplies.
Sadly, donor aid to agriculture is still woefully short of what is needed to meaningfully reduce hunger. And in spite of African countries' stepping up in response to the food crisis and drafting ambitious country plans through the Comprehensive Africa Agriculture Development Programme (CAADP) process, donors are not living up to their end of the bargain. African countries have developed costed and peer reviewed plans, but donors are not keeping up through support to fund them. Huge gaps exist in the money needed. For just the 20 African countries that are an advanced stage of the CAADP process, there is a funding gap of $36.3 billion that needs to be filled.
With the world teetering on the edge of another food crisis, the G8 must keep to their 'Hunger Pledge'. ActionAid is also urging the G8 and all donors to channel their aid behind country plans.
It is vital that donors ensure their L'Aquila pledges are delivered within the 3 year timeframe, with shortfalls in commitments and disbursements of agricultural aid addressed as a matter of urgency by all donors.
Donors should channel more money through GAFSP, which is delivering new money, transparently, in support of country led plans.
Donors need to take the next step and go beyond L'Aquila and ensure that all CAADP investment plans are fully funded.
Section 3. Moving forward: What needs to happen?
Aid to agriculture is still woefully insufficient to signficantly reduce hunger. African countries are increasingly meeting their side of the bargain via the CAADP progress, and and have developed costed and peer reviewed plans, but donors are not keeping up.
The individual performance of L'Aquila donors in increasing aid over the period from 2002-2009 to agriculture does show some progress but almost all this progress is a consequence of significant advances by a handful of donors. Among the largest donors, best performers include the USA, the EU and Japan. All these three donors have more than doubled aid to agriculture since 2002. France, however, has made significant cuts in aid to agriculture in the last couple of years and the aid provided by Germany remains fairly stable. Among smaller donors, Spain has made remarkable progress. Canada has also managed to double aid to agriculture since 2002.
The Comprehensive African Agricultural Development Programme (CAADP) aims to revitalise African farming in order to reduce rural poverty and hunger. CAADP was conceived by the African Union in 2003 as an ambitious and comprehensive attempt to help African countries reach higher economic growth through agriculture-led development, with the ultimate goal of eliminating hunger and reducing poverty. Since then, CAADP can be credited with changing the way in which national governments and donors approach agricultural development, while shifting focus back onto African agriculture as a key development pathway. Signatory countries also made important commitments through CAADP to increase spending on agriculture to 10 percent of their overall budget and reach an agriculture growth rate of 6 percent per annum.
To date, 23 countries have completed the CAADP roundtable process - a country-led process that defines a strategy for reducing hunger and improving agricultural productivity through policy reform, as well as more and better investment in public resources. The aim is that these country-level processes lead to national compacts and ultimately to investment plans that are jointly owned by governments, donors, civil society organizations, the private sector and regional economic communities.
Despite African countries stepping up in response to the food crisis, donors are not living up to their end of the bargain. Huge gaps exist in the money needed (see table two below [in full report]). For just the 20 African countries that are an advanced stage of the CAADP process, there is a funding gap of $36.3 billion that needs to be filled [67% of the $54.8 billion estimated cost].
With the world teetering on the edge of another food crisis, the G8 must keep to their 'Hunger Pledge'. It is simply not acceptable that they are unable to give a full and transparent account of progress to date. In so doing, the G8 is severely undermining the 'accountability' process by a lack of transparency.
The figures suggest, despite some outstanding exceptions, that there is a lag in progress on the key elements of the pledge: aid to agriculture, and in support for country-led plans and small holder farmers.
ActionAid is urging the G8 and all donors to channel their aid behind country plans. This is particularly important in light of evidence which shows that increased African government support to agriculture is helping to cushion countries and poor communities against the current global price spikes.
In particular, investments channeled via the GAFSP are proving to be an effective and transparent vehicle for moving funds to support country led plans, but not enough donors are supporting it. All details about country plans, financial disbursements and commitments about GAFSP are available publicly on the web -- all L'Aquila bilateral donors should follow this model.
Ensure that the underlying data on 2010 disbursements is publicly released by all donors and is reported on according to the original commitments made, with no re-classification of funds.
Ensure the full delivery of the L'Aquila pledge and transparently spell out how and when the money will be delivered.
It is important that the shortfalls in the progress on commitments and disbursements of aid to agriculture are addressed as a matter of urgency by all donors.
Donors need to take next step and go beyond L'Aquila and ensure that all CAADP investment plans are fully funded.