Massive aid injection needed to break dependence

Africa needs a massive injection of external financing to kick start and maintain growth in the region if it is to break its dependence on aid, a new UN report said on Thursday. The report by the UN Conference on Trade and Development (UNCTAD) said that large amounts of official aid was the “only feasible way” to help break the “vicious circle” of inadequate and volatile financial flows and erratic growth in the region. It said doubling official financing to sub-Saharan Africa to an annual US $20 billion could help trigger increased national savings and investment, as well as faster growth. The region received an annual average of US $10 billion in official flows over the last five years, the report said. Flows of private capital as a proportion of gross national product (GNP) have fallen and long-term bank lending has completely disappeared since the mid-1980s. In sub-Saharan Africa private inflows have mainly been in the shape of foreign direct investment and short-term bank lending, UNCTAD said.