30 June 2005

Africa: Increasing Aid Goes Hand in Hand with Fighting Corruption

press release

With just over a week until the G8 begins, African organizations and international aid agencies today called on world leaders to see aid as a weapon through which corruption can be fought rather than an excuse to stall on increasing aid pledges.

The coalition of poverty groups are calling on rich countries to make a clear commitment to not only double their aid spending to $50 billion but to also tackle global corruption which includes ratification of the UN Convention on Corruption at the G8 in July. They argue that not only does aid work in alleviating poverty, it can also support the fight against corruption which should not be seen as a problem that is unique to Africa; developed countries and multilateral companies are also culpable.

Kumi Naidoo, Chair of the Global Call to Action Against Poverty, the biggest global anti poverty campaign in history which represents 450 million people said: "The Global Call to Action Against Poverty is resolutely committed to fighting corruption. For years national coalitions across the south have been exposing petty corruption and holding governments to account to ensure that aid money goes to where it is needed most. Corruption on a grand scale would in many cases not be possible without the collusion or indifference on the part of rich countries. As former President Clinton said, too many rich countries use corruption as a smokescreen and an excuse for inaction."

Corruption is a serious problem that demands serious solutions. There are six main reasons why corruption should not be seen as a blockage to further aid increases. These are:

--Aid works and has been critical in getting 2 million children back into school in Tanzania and ending diseases such as river blindness and smallpox. Even in countries where corruption has been endemic, aid has helped to alleviate poverty.

--Provided in the right way, aid is a weapon through which corruption can be fought by building governments' capacity to monitor the spending of aid money and ensuring that civil servants are paid a salary which they can survive on.

--Corruption itself is in part a consequence of poverty. "Petty" corruption is more likely to take place when civil servants are paid very low wages - a fact that has been acknowledged by both the World Bank and IMF. In such circumstances, simply withholding aid is ineffective, and can be counter-productive. It ignores the fact that aid can be delivered in multiple ways, through different parts of government and via different actors such as civil society groups. Casting countries adrift where there are serious corruption concerns only serves to compound rather than address the problem.

--Corruption is a global phenomenon. It exists in rich and poor countries. The trend of increasing democracy in Africa bodes well for reducing corruption in the future. Better political accountability to electorates can only lead to increased scrutiny of government and donors.

--Large-scale bilateral and multilateral aid can lend itself to patronage, politics and waste. Donor countries must ensure that aid is well targeted, well-managed and transparently given based on a needs led basis. The G8 must lead the fight against corruption but should also stop giving aid (and debt relief) solely as a reward for countries opening up their markets, pursuing free-market policies, or joining the fight against terrorism.

--Western governments are quick to admonish developing countries for corruption but they themselves should clean up their act and make it harder for money to be held off-shore. Rich countries should provide aid according to need rather than geopolitical interest, make export credit agencies distribution of money - often a source of corruption - far more transparent, and take stronger action against suspicious payments into western banks.

Corruption on a grand scale would in many cases not be possible without the collusion or indifference on the part of rich countries. In areas where there are serious problems with corruption such as oil, diamonds and other extractive industries the problem is often the collusion by multinational companies with the knowledge and tacit approval of their developed country governments.

Charles Mutasa, Acting Executive Director, African Forum & Network on Debt and Development (AFRODAD) said: "It is important to understand that aid goes to Africa for a variety of reasons, only one of which is for development and to lift people out of poverty. Much of the large-scale corruption that developing countries are fighting today originates from northern partners and companies. Studies on the loan contraction process in Africa by AFRODAD have shown that there are instances where an international financial institution or donors fail to convince the civil servant, they resort to bribing the politician to push through deals that would otherwise have been blocked by the civil servants rationale. Corruption is an issue that affects the poorest the hardest and is something that needs to be fought tooth in nail both in Africa and in the west."

Oxfam is supporting local civil society groups across Africa to scrutinize the delivery of aid spending as corruption hits the poorest hardest. In Malawi, Oxfam has funded groups which tour the country's schools making sure textbooks paid for by foreign aid actually arrive. In Uganda, an anti-corruption group supported by Oxfam named and shamed a corrupt official who had pocketed £15,000 earmarked for a road upgrade. He was arrested and forced to hand back the money. These are just two examples of how African citizens are taking action against corruption within the continent.

Irungu Houghton, Oxfam's Pan African Adviser: "We take corruption seriously and are supporting local groups in Africa to ensure that aid, in the form of text books and desks, gets to those who need it. Used in the right way, aid can lift people out of poverty and take away the incentive for corruption. Good governance is absolutely critical and people in Africa are holding governments to account. The G8 leaders must not use corruption as an excuse to not increase the aid urgently needed to fight poverty which costs the lives of 30,000 children a day."

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