A female farmer in Swaziland. Although many Africans depend on agriculture, financial investment in agriculture is low.
Photo: ©IFAD / Guy Stubbs

Less funding reaching the poorest people

The world’s poorest are receiving a declining share of global financial resources according to a new report from the ONE Campaign. African countries are most affected, who also suffer from their governments‘ failure to make the pledged investments in education, health and agriculture.

Global Official Development Assistance (ODA) has risen, but the world’s poorest are left behind according to report published by the ONE Campaign in September 2017.

In 2016, global Official Development Assistance (ODA) amounted USD 140.1 billion, a 7.4 per cent increase from 2015 in real terms. However, almost half of all DAC donors used more than one fifth of their bilateral ODA for In-Donor-Refugee-Costs (IDRC).

Despite the increase in ODA, the least developed countries’ (LDCs) share in 2016 fell to 28 per cent down from 32 per cent just four years ago.

Africa, home to more than half of the world’s extreme poor, is being hit hardest because of donor countries defaulting on their ODA pledges, low levels of foreign direct investment (FDI) and falling domestic revenues. 

The share of global aid going to Africa has dropped from 36 per cent in 2012 to 32 per cent in 2016. What is more, falling commodity prices have led to a 24 per cent decline in Africa’s revenues since 2012.

Like ODA, financial resources through the FDI are also very unequally distributed. 75 per cent of all FDI-resources going to all 42 African LDCs or fragile states went to just six countries: Angola, Egypt, Nigeria, Ethiopia, Mozambique und Congo. Apart from Ethiopia, these countries are all rich in raw commodities and oil and gas producers.

African states under-invest in agriculture

Failure to invest in Africa’s youth will lead to widespread joblessness and instability and threaten the Sustainable Development Goals, the report warns. Crucial factors are not only financial resources from ODA, FDI und domestic revenues, but also the investments African states themselves make in the sustainable development of their own countries.

The African Union member states have pledged to spend at least 15 per cent of their budgets on health, 10 per cent on agriculture and 20 per cent on education. Reality is still a far cry from reaching these goals.

To achieve such a situation, every African fragile state or LDC must increase average expenditure on education by some 20 per cent and on health by almost 50 per cent. The average spending situation for agriculture is even more drastic. This would have to rise by more than 100 per cent.

In 2014, only four African countries achieved these health goals, eleven the education goals and three the agricultural goals. Malawi (LDC and fragile) surpassed its health and education goals and almost doubled the target spending for agriculture. Ethiopia, too, exceeded its health and education spending goals.

Read more: The 2017 DATA Report

(ile/one)