AFRICA’S NEEDS AND THE EVOLVING ROLE

OF DEVELOPMENT AID

Creating an Enabling Environment for SSA to Realize its Potentials:

Perspectives and Role of African Governments

Presented by
Toga Gayewea McIntosh,PhD
at
The Bretton Woods Committee Discussion Panel
October 29, 2010

I. Introduction

We are grateful for your invitation and for the opportunity to express our views on and make a
modest contribution to the on-going debate surrounding development aid effectiveness. Any
opportunity to make the case for Africa is always a welcome opportunity. We have been asked
to place on the table issues associated with defining and executing the African agenda for
creating an enabling environment within the region that would yield greater development results
given its vast potentials.

To create the relevant environment that would enable or lend appropriate support to achieving
desired results with assistance from a second party such as aid providers; it is important that the
key players have a convergence on (i) the nature and complexities of the short, medium and
longer term challenges that are to be addressed; and (ii) a set of answers to a set of questions that
have lingered on for a long time in the use of development aid to meet Africa’s development
needs.

I shall briefly touch on these two prerequisites as seen by an African development practitioner
eyes and experience gained over the years. I shall conclude my brief remarks offering for
discussion what I consider to be a suitable role of governments, aid donors and the private sector
players in the transformation of African economies.

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II. Nature, Intensity and Complexities of the Challenge

Much has been written and said in recent years about the challenges faced by SSA in the wake of
the on-going global recession and anticipated global slow recovery. Yes, aid packages would
compress in volume; private sector investment; flows to Africa could gradually dry out; and
national budgets would be filled with deficits.

Let us for a moment put this aspect of the challenge aside. There are other major challenges
faced by African Governments in dealing with the “Aid Architecture” well before the crisis that
have constrained Africa’s ability to realize its potentials. Most of these challenges are still
roaming in the air; and if not adequately addressed by both the governments and their
development partners, the number of people graduating into poverty would continue to swell;
and the amount of donor assistance remaining ineffective.

Let me briefly highlight two from the growing list of challenges:

(i) Identifying, Harmonizing and Sequencing Development Priorities

A major challenge is to minimize or eliminate conflicting economic, social and at times political
priorities between donors and national governments. What has been very difficult during
negotiations is reaching an agreement on a set of variables in determining the context and areas
of priorities, and what is not a priority in a country’s development agenda. Priorities set by Aid s
donors in their respective countries may not necessarily be in harmony with those set in national
framework documents or the ad hoc priorities that have emerged as a result of the need for a
rapid response to a social or economic crisis. Such a case does not only result in long
disbursement of funds; but could escalate the crisis.

An associated challenge, particularly in post-conflict countries and countries that are at the
lowest end of the development ladder, is prioritizing priorities. Every required intervention is a
priority that must be met in the short to medium run to keep the whole together. Working with
aid donors in undertaking this tedious and at times frustrating task, and getting their respective

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capitals and institutions to understand this abnormal situation, have proven difficult in many
instances.

(ii) Balancing multi-lateral and bilateral aid flow to Africa

The good intention of many donor countries to deal directly with governments in the delivery of
aid assistance is gaining momentum; and showing good signs for rapid respond and appropriate
targeting. Equally, essential, is the growing appetite for multilateral assistance both on the part of
governments and donor institutions. The challenge is bringing the two sources of funding
together and striking the right balance. When one thinks of it, the sectors to be funded are first
limited to not more than four in any given country; or you may find several donors within the
same sector in an uncoordinated manner. International NGOs are notorious in this regard; and if
the concerned government is not vigilant enough, substantial wastage could occur.

III. Finding Appropriate Answers to Lingering Questions

Obviously, policy and decision makers are, from time to time, searching for answers to a host of
questions when they are involved with designing and negotiating aid packages. The extent to
which suitable and converging answers are found and internalized by both aid recipients and aid
donors, would to al large extent determine the level of effectiveness of the package.

Some of these questions relate to finding out and appreciating the type, scope and the location of
abundance potentials in Africa that could and must be realized? There are untapped natural
resources sitting to be explored and utilized to create and distribute wealth to the various corners
of Africa. I am talking about those resource bases that are above the ground, beneath the ground,
and those flowing down the slopes. The key of these is the human resource base, which if
developed properly, has the ability to develop and manipulate the other resource bases to create
growth, wealth and development.

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Much more can be said of the value in finding appropriate answers to the question of
underutilization of valuable idle resources for the benefit of all. But let me briefly shift to a major
question that is worth thinking deeply about within the context of the ongoing debate and the
theme of today’s working session:

How does one Differentiate Critical Needs from Wants?

Sometimes there are misinterpretations between aid donors and aid recipients on what is really
required. At times the recipient may mix up needs and wants or is not in the position partly due
to capacity constraints to clearly differentiate and/or prioritize the two expectations. At times it
is the donor, who has failed either willingly or due to ignorance of the ground, to clearly
differentiate and/or prioritize the two expectations. In some cases, clear distinction is made and
the decision to focus aid resources on meeting critical needs is taken by both sides in the
framework document. Then comes the project designer with his /her own conception and
understanding of what is required, which in many cases could be slightly different from the
needs as was agreed to by the two parties. To further complicate matters, the project
implementation team arrives, with its own conception and ignorance.

The result is derived outputs that do not effectively contribute to meeting the identified needs.
Certainly, the effectiveness of the allocated resources becomes questionable.

As we enter into the post-crisis and learning from the last two decades, Africa needs, for which
donors’ complimentary support is required and most critical is building the requisite and
enabling infrastructural base for sustained growth and poverty reduction: roads, energy,
agriculture and human capital. Willingness on the part of our partners to focus their assistance on
this critical area of needs is all we ask. I hold the strong believe that with this paradigm shift
and a concerted partnership effort, Africa together with het partners can drive the growth story
well into the future.

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IV. The Role of Governments and Donors in the Equation

The key overarching mission should be aimed at ensuring a growth pattern that is sustained,
equitable and based on dynamic structural changes. Several interdependent players
(Governments, donors, private sector) must play well their parts. The literature and policy
framework documents are full of indicative lists of what each of these players should be pre-
occupied with in achieving the desired mission.

I want to single out two from the list only to demonstrate the frustration and relative setbacks
encountered when the expected roles are being played by the required players. One has to do
with the conceptual/theoretic aspect while the other deals with the practical side of the issue. The
goal here is to see where attention needs to be focused if the participating tri-partite team is to
deliver maximum and effective results.

• Ensuring a developmental macroeconomic policy environment

It would be useful if the current narrowed focus on inflation, budget and account deficits were
broadened to incorporate policies that would support growth and productive employment into
macroeconomic frameworks of national development strategies and plans. This approach would
signal and provide stronger support of private sector interventions on the development field of
play. Lessons elsewhere suggest that this move would spur greater inflow of development
resources and accelerate economic productivity.

A clear analysis of the interdependence of these in any growth model; and a better understanding
of the tangible developmental benefits to be derived by this renewed policy focus, could make a
world of a difference in our result matrixes.

• Living the true spirit and meaning of partnership

Development players should be considered as a team on the field of play in any geographical
space. Like any team in the Olympics or the World Football Cup, the goal of the players as a

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whole is to move tactically in one direction towards a single goal. Imagine what the results
would be if the players were moving in different directions and shooting at different goals with
all their energy using the team resources. The team and all of its supporters and not the
individual player would lose and become an unaccomplished team.

These players are partners. They are taught and trained to be partners. Each player adjusts and re-
adjusts any handicap that would destroy that partnership to remain an effective player on the
team. They work hard each day to strengthen that partnership through fair and open dialogue
with each other and mutual respect. The extent to which they succeed in building and living that
partnership would determine the number of games they would win.

Government, aid agencies and private sector players need to learn from the athletic page to
ensure a win-win situation.

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