A new report by the World Bank's Development Research Group on the links between foreign aid and economic policy reform in Africa has revealed that aid has in some countries has been effective in supporting policy reform, but that, in general, donors have not discriminated effectively between different countries. In this way, foreign aid can help deepen reform commitments and support high growth rates.
Reform is largely home-grown.
In light of the potential for reform and economic growth, the World Bank reiterated that rich countries should honour a commitment to the UN to devote 0.7 percent of their annual GDP to overseas aid, and to open their markets to exports from developing countries. It is painfully ironic that just at the time when many African governments are putting in place effective social and economic policies, and committing to reform, development aid is being cut. African leaders are determined as never before to lead their own renaissance, but what they also need is increased development assistance to support those reforms and access to developed country markets. Rich countries need reminding that their current levels of foreign aid, at some 0.24 percent of yearly GDP, fall far short of the 0.7 percent target they promised to meet. The difference between these figures is worth a hundred billion dollars a year.