Africa After the Music Stops

Susan E. Rice
Susan E. Rice Former Brookings Expert, Distinguished Visiting Research Fellow - School of International Service, American University

August 2, 2005

Now that the Live 8 bandstands have disappeared and the G-8 leaders’ brief comity is starting to dissipate, what will become of the promises made to Africa at the Gleneagles Summit? How much was actually accomplished, and what does Africa stand to gain?

In fact, the Gleneagles Summit accomplished more than many activists and analysts had predicted. Still, the outcome fell short of British Prime Minister Tony Blair’s original ambitions. Regrettably, the US contribution was modest, if not grudging. Moreover, given that the G-8 leaders’ most significant commitments on poverty reduction will be meaningless without subsequent follow-up action, it is far too early to declare even incremental victory.

Blair has made poverty reduction in Africa both a major focus of UK policy and a powerful political rallying cry in Britain. The British Prime Minister set the G-8 agenda early by establishing a high-powered, multinational commission for Africa. The commission produced a seminal and exhaustive report on the reciprocal steps African and donor governments should take to alleviate poverty on the world’s poorest continent. The study also assessed the quality and quantity of aid that Africa needs as well as the pace with which it could absorb that aid—provided continued progress on policy reform, democratization, and reducing corruption in Africa.

Based on this analysis, Blair set the goals for his Gleneagles summit. The most important were gaining G-8 leaders’ commitments to spend 0.7 percent of gross national income on overseas development assistance by 2015; to double total annual aid to Africa to US$50 billion by 2010, and then to increase to US$75 billion by 2015; establish an International Finance Facility (IFF) to front-load and stabilize aid commitments; to cancel debt owed by the poorest countries without compromising the multilateral banks’ lending capacity; and to eliminate agricultural export subsidies and related measures that harm many African farmers.

What Blair managed to achieve on Africa was, perhaps, a bit more than “half a loaf.” The US and Japan refused to join the European members in signing up to the 0.7 percent goal, while Canada agreed in principle but refused to set a timeframe. The most significant outcome of the Summit was the promised doubling of aid to Africa. It was accomplished at the last minute in the context of a global increase in aid, when Japan made new commitments to top off the total already on the table—mainly from Europe. No mention was made of the goal of providing US$75 billion annually to Africa by 2015. The US and several others rejected the IFF, leaving a European rump group to launch a modest pilot effort to finance health investments.

Eighteen countries—14 in Africa—will benefit from cancellation of at least US$40 billion in multilateral debt, a deal worth an estimated US$1.5 billion annually. Over 20 other developing nations, such as Kenya, remain burdened by what they maintain is unsustainable debt, but were not eligible for debt relief. Finally, the G-8 leaders agreed in principle to work toward the elimination of agricultural subsidies, but set no date to achieve that goal, leaving the challenge to their notoriously pugnacious WTO negotiators. The World Bank estimates that eliminating agricultural trade subsidies in developed countries would yield a real income increase for the developing world of US$9 billion by 2015. According to Oxfam, Sub-Saharan Africa currently loses approximately US$440 million a year due to trade distortions in cotton markets alone.

Despite President Bush’s compelling rhetoric the week before Gleneagles on the importance to US national security of poverty reduction in Africa, the US contributed little to the summit’s positive outcomes. Of the additional US$25 billion promised to Africa, the US agreed to provide just US$4 billion. The EU committed over US$17 billion of this total, and Japan and Canada the remainder. The US share is meager, considering the relative size of its economy, and falls well short of the customary minimum US contribution to multilateral funding instruments of at least 25 percent, or US$6 billion.

President Bush went into the G-8 summit trumpeting that his administration had already tripled his predecessor’s African aid level. He then pledged to double US aid to Africa yet again from 2004 levels by 2010. Unfortunately, these claims and pledges do not bear up under close scrutiny. In reality, the Bush administration did not triple—or even double—aid to Africa from 2000 to 2004. In real dollar terms, US aid to Africa increased 56 percent over that period, and more than half that increase consisted of emergency food aid, which saves lives but has no lasting developmental impact.

Moreover, the US$4 billion in additional annual aid that President Bush pledged for Africa by 2010 will include very little new money. Virtually all of the increase promised by 2010 amounts to a re-packaging and re-pledging of prior and, as yet, unfulfilled commitments the President made a few years ago when he unveiled his Millennium Challenge Account and Emergency Plan for AIDS Relief. The funding for these two programs was intentionally “backloaded,” so that the bulk of the expenditures would occur in the programs’ later years. Yet, the President’s budget requests even for the early years of these programs fell short of his promises. The US Congress further cut those requests, leaving major shortfalls to be made up in the coming years, if the President’s original commitments are to be met.

It is reasonable to suspect some comparable “smoke and mirrors” behind the pledges made by other G-8 members, widening still further the potential gap between the optimism that accompanied the Gleneagles communiqué and the incremental benefits likely to accrue to African nations. The commitments of each G-8 country deserve careful comparison with prior pledges to ascertain how much of the Gleneagles money will actually be “new.”

It is equally important to hold the signatory leaders and their successors accountable for their Gleneagles commitments. The upcoming WTO Ministerial in December 2005 will be the first crucial test of the success of the Gleneagles summit. The WTO session will shape the outcome of the Doha Development Round, which has failed thus far to make meaningful progress on trade subsidies. If G-8 countries fail to commit in Hong Kong to an early date for the elimination of agricultural subsidies and related measures, the hopes raised by Gleneagles will be dashed.

Finally, it is a political reality that few, if any, of the current G-8 leaders will hold office in 2010 when their Gleneagles aid pledges come due. The willingness of future leaders and their legislatures to make good on their predecessors’ promises is questionable at best. The lesson of Live 8 and the campaigns “To Make Poverty History” is that grassroots movements, especially when fueled by rare coalitions of celebrities and religious leaders, can make a difference. Though not all of their goals were achieved, it is almost certain that more was accomplished in Gleneagles than would have been the case without sustained and intense public pressure. If the anti-poverty movement loses its focus and intensity in coming years, it is likely that Africa will also lose whatever it might have gained at Gleneagles.