Aid, conditionality and debt in Africa

Abstract

The years since the early 1980s have seen an exhaustive, and exhausting, debate on foreign aid, conditionality and debt. The post-WWII consensus on aid flows to fill the investment-savings ‘gap’ in the less developed countries has collapsed, under attack from both the political right and the political left. Closely tied in to this debate were the disagreements on conditionality, and on debt. The Latin American debt crisis of the 1980s launched the arguments for and against debt relief with different degrees of conditionalityboth for the debt relief and for subsequent new flows. But it is in Africa that the current debate finds its centre of gravity. Despite massive foreign aid, with inflows far exceeding debt servicing outflows, and despite much resented conditionality on this aid, Africa has failed to achieve significant progress in the wellbeing of its population. Some lay the blame on Africa’s foreign debt burden. Others on conditionality. But on conditionality, there seems to be a three-cornered fight: between those who believe aid conditionality would work if only it were targeted towards the opening up of markets and rolling back the frontiers of the state, those who believe it would work if only it were targeted towards better allocation of public expenditure and programmes toward the poor, and those who believe that the carrot and stick of aid is powerless in the medium term to shift the domestic political equilibrium in a direction other than the one in which it wants to go.

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