By Sarah Hermitage, Special Correspondent
British Aid is supporting a series of corrupt African governments, is impossible to audit, causing inflation and is distorting interest and exchange rates. Spending is bonus and target driven and corruption in Kenya was deliberately ignored so as not to impede the achievement of the Department for International Development’s (DFID) targets and senior DFID members of staff are getting bonuses which discourage criticism.
This shocking view was presented to the House of Lords’ Economic Affairs Committee last week by retired Development Economist Gordon Bridger. He told the Lords: “The DfID is now not fit for purpose. What was once Barbara Castle’s proud achievement, a Ministry of Overseas Development, is now largely an overseas welfare organization whose main beneficiaries are those who work for aid institutions,” he said. The economist together with Charles Cullimore CMG, a former High Commissioner to Uganda (1989-93) and now honorary President of the Business Council for Africa and Michael Shaw, a former District Officer in then Tanganyika (now Tanzania) who now acts as an adviser on Governance to the DFID and other organisations, systematically challenged DfID’s DNA particularly in respect of general budget support.
In his evidence to the Committee, Bridger quoted respected academics and journalists who had argued for a large reduction in aid and cited examples where corruption in Kenya was deliberately ignored so as not to impede the achievement of DFID’s targets. He informed the Committee that DfID staff members were concerned that too much money is being given in Aid which was distorting economic pointers, fuelling corruption and driving up exchange rates to uncompetitive levels. “Across Africa, the countries getting budget support do not have to bother too much about raising their own revenue. Meanwhile, DfID is dumping as much money as it can with international bodies as fast as it can. These are genuine comments by very concerned DfID staff members and is the reason why I am here,” he said.
This is in sharp contrast to the message conveyed to the Committee earlier in the week by the British Secretary of State for International development, Mr Andrew Mitchell MP, who espoused the effectiveness of UK Aid to the Committee. “I have seen it as part of my job to move DfID away from sometimes looking a bit like a rather well-upholstered NGO moored off the coast of HMG to being a department of state for development in the developing world,” he said. Mitchell told the Committee that at the heart of DfID policy was the need to be accountable to the British taxpayers and deliver 100 pence of development for each £1 of their hard-earned cash to deliver result on the ground. “We have been very clear indeed that we need to be able to reassure the British public – it is also why we set up the Independent Commission for Aid Impact, the independent watchdog,” he said.
The Secretary of State stated that DfID now has an increased emphasis on accountability and scrutiny which added to the effectiveness and accountability of foreign aid. However, when asked by Committee member Baroness Kingsmill how much he thought had been lost by way of corruption, he stated it was impossible to answer the question. He informed the Committee that DfID was moving into the private sector as a means of delivering support, a sector he described as ‘the engine of development’ in Africa and an effective mechanism for the distribution of aid.
Mr Cullimore told the Committee he felt this move was unlikely to be effective. “As far as I can see, there is really no way around the conflict between sovereignty on the one hand and the need for conditionality on the other, particularly in the context of budget support. The question refers to possible commitment by the recipient Government to improve ‘public financial management’. “I can see that could be negotiated as part of an arrangement. It might be the deal, as it were, that would be part of the conditionality for the budget support. However, it would be very difficult to monitor whether that was happening, still less to impose it. Therefore, I do not think that it can be effective. Perhaps it is not an exact parallel, but look what is happening in Greece,” he said.
Mr Shaw concurred with this view, making the point that for private sector aid to work, proper investor environments were required to have impact. “You need a secure environment, good governance, the rule of law and proper land registration—all those things around which a decent Administration revolves. If you do not have those, the whole aid programme is a waste of time – the one thing that DfID and the British Government should be doing is concentrating on those good governance factors that have to be in place before you can bring in private investment,” he said.