ECONOMIC aid to Africa should be phased out over 10 years to stimulate the growth of local economies, a leading development economist has suggested.
In a provocative analysis of aid policies, Dr Elliot Berg suggests Africa has received too much rather than too little aid from the West. "African countries, with typically weak administrative systems, have been unable to absorbing an effective way the resources that have been available," he says.
Dr Berg, a Harvard educated economist who is the author of several World Bank reports, was in Ireland recently to conduct a series of seminars at the invitation of the Department of Foreign Affairs.
He told the seminars Africa was the most heavily aided region for over 20 years. The ratio of aid to gross domestic product was 10 times that found elsewhere in the developing world. Aid accounted for an average of 13 per cent of GDP in the region overall. These factors discouraged exports and reduced the incentive for governments to stay within budget, Dr Berg said.
Aid which was not performance related allowed governments to postpone policy reforms and moves to better governance.
"Control over investment slips away, donors devise and run projects, usually with only limited local participation." The World Bank and the International Monetary Fund exerted deep influence on policy reforms, manpower levels and the setting of budgets.
The problems caused by too much aid were compounded by mistakes in the allocation and use of aid. These included dealing too much with inefficient or corrupt government agencies and too little with the private sectors; neglecting to supervise and evaluate projects; focusing too much on a project by project basis; and not listening to the recipients of aid.
However, if a credible agreement to phase out aid could be reached, this could help to build local capabilities, strengthen institutions and allow the private sector to flourish, Dr Berg concluded.
