Aid should be channelled through special fund - UN

To make the best use of the promised doubling of aid to Africa, it should be distributed multilaterally, possibly by a United Nations fund "independent of political pressures", according to a report by the UN Conference on Trade and Development (UNCTAD).

The report, released late on Thursday in Addis Ababa, calls for international donors to stop giving aid bilaterally but to rationalise their support by channelling it through a single multilateral and independent organisation.

UNCTAD’s economic affairs officer in Ethiopia, Janvier Nkurunziza, said the aid system was "unpredictable, incoherent and politicised", and called for one modelled on the Marshall Plan, which helped Europe to recover after the Second World War.

"De-politicised and more predictable flows with greater economic focus [are] needed, more grants and less loans, increased budget support to reduce project aid ... the Marshall Plan should inspire Africa," Nkurunziza said.

The report, entitled "Economic development in Africa 2006: Doubling Aid: Making the ‘Big Push’ work", notes that despite receiving about US $580 billion in foreign aid since 1960, Africa had been unable to achieve real economic lift-off.

Nkurunziza called for more aid for Africa, stating that "Asia received US $40 billion more aid than Africa between 1960 and 2004 … In relation to Africa's needs, achieving the MDGs [Millennium Development Goals], Africa will require at least twice the flow than now," he said, criticising the fact that aid in Africa was too concentrated on a few countries.

"Only 10 countries account for 40 percent of total flows," he said.

To overcome political bias, the UNCTAD report says that more aid should be channelled via the United Nations, through the creation of an independent UN fund. The report estimates there are about 75 agencies now providing help, and these generate 200-300 missions to Africa each year.

"Aid to Africa should not only be doubled, as now agreed by donors," said UNCTAD report. "There needs to be a greater multilateralisation of aid so that the distorting influence of individual donor preferences is reduced.

"The money should be released in predictable tranches over a long-term period, should be more focused than currently on enabling African economies to produce a broader range of goods and create more jobs, and should be channelled to those countries' general budgets so that their legislatures can best decide how to spend it," UNCTAD said.

The full report is available at: www.unctad.org

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