Africa feels the pinch as donors slash funding

“External funds are productive funds as they are normally channelled to social services such as education and health and infrastructural projects such as roads, power and water,” said Linet Oyugi, a macroeconomist with the Institute of Policy Analysis and Research (IPAR) a local think tank.

“By using these funds for development expenses such as road construction, energy generation they open up the economy by improving the business environment which invariably attracts investment,” added Ms Oyugi.

Oxfam has criticised the move by the donors to cut funding to Africa.

“These broken promises are nothing short of a scandal,” Oxfam senior policy advisor Max Lawson said in a statement.

However, some of the OECD member countries are expected to meet their commitments despite the tough economic environment.

Countries such as UK, Ireland, Spain, Belgium and Japan will surpass the 0.51 per cent limit.

Other countries that are expected to meet and surpass their pledges include Sweden and Luxembourg which are set to provide 1.3 and 1.0 per cent respectively.

“Countries such as the UK, Spain and Belgium are demonstrating it is possible to show development leadership, and we still hope to see others like France, Germany and Italy stepping up in 2010,” said Lawson of Oxfam.

However, Italy, Germany, France, Greece and Japan are expected to fail to honour their pledges.

Italy and Japan economies have been hit hard by the recession forcing them to record negligible growth in the last couple of years.

In deed, Japan with previously a strong record of donating generously to Africa is expected to see its donation fall by $4 billion from its pledge of $10 billion.