Sections:

1. More and Better Aid

What we agreed at Gleneagles

The G8 and other donors will provide an extra $50 billion of aid (Official Development Assistance – ODA defined as aid to developing countries and multilateral institutions provided by official agencies or their executive agencies.) by 2010. Half of this will go to Africa.
The European Union (EU) set a target for its 15 established members to be providing 0.51% of Gross National Income (GNI) in aid by 2010 and 0.7% by 2013. New member states will aim for 0.17% and 0.33%.
The G8 will increase aid and make sure it will be used more effectively. This means that developing countries will take responsibility for their own development and that all donors will guarantee that aid is better co-ordinated – to avoid duplication and waste. The benchmark for this is the 'better aid principles' of the OECD-DAC Paris Declaration on Aid Effectiveness.

How is the UK doing?

UK ODA was £6.85 billion in 2006 which is 0.52% of Gross National Income. Under the OECD Development Assistance Committee’s scoring of ODA, the debt relief is counted as ODA in the year it is given. Therefore the UK’s ODA figures for 2005 and 2006 are significantly higher than projected as a result of the benefits of Nigeria’s debt relief being frontloaded. It is, conversely, expected that the figures in 2007 will be lower than projected. However the UK is on track to meet the 0.51% target by 2010 and to reach the 0.7% target by 2013.

The 2006 baseline survey on better aid - covering the implementation of the DAC Paris Declaration - showed that the UK was performing well:

We are improving the co-ordination of aid to support country owned poverty eradication programmes by working with other donor countries and organisations like the UN.

We are increasingly using the developing countries’ own systems to deliver aid.

How the international community is doing

boy in zimbabwe Since 2004 there has been a significant increase in global aid – rising by 25% to just over $100 billion including a record high of $27 billion in disbursements to sub-Saharan Africa. Compared to 2004, ODA from DAC members to sub-Saharan Africa increased by $10 billion or 59% in real terms. Excluding debt relief, ODA increased by $2 billion or 12.4%.

There is still much more to do and we are working hard to ensure countries meet their promises so that the aid to Africa promised at Gleneagles starts to have a real impact on the Millennium Development Goals (MDGs). A substantial part of the increase in global ODA since 2004 is due to exceptional debt relief packages. From 2007, as the impact of this debt relief on the ODA figures becomes less significant, it will be important for all donors to renew efforts in order to meet their 2015 commitments.

The signing of the DAC Paris Declaration on Aid Effectiveness in 2005 by major donors like the UK and by developing countries was a big step in improving the quality of aid. Some, but not all countries have begun to implement its principles. In particular many donors continue to by-pass developing country systems which risks duplication and inefficiency. As well as this, much aid remains 'tied' to using the donors’ own procurement procedures. This makes aid less effective than using open competition for procurement.

What should happen next?

Through the EU and G8, the UK is working to encourage other donor countries to deliver more aid and meet their Gleneagles commitments. Many civil society groups work internationally, motivating people to lobby governments to meet their promises.

The UK is also seeking to accelerate aid flows by developing innovative programmes, such as the International Finance Facility for Immunisation.

Donors will be held to account at the High Level Forum in Ghana in 2008 for progress on the extent to which they are meeting the Paris Declaration on Aid Effectiveness commitments.

Where it is making a difference

Aid Effectiveness in Uganda - in Uganda seven donors (including the UK) are supporting a Joint Assistance Strategy which is led by the Ugandan government. The strategy identifies priorities and sets out plans to implement programmes. This makes for a more open relationship and a more systematic approach to development. By working with other donors the UK can deliver more effective aid.