Are Western donors more interested in workshops than work? Actually, no

Saturday May 5 2012

 

The past few weeks have seen harsh attacks on Western donors in the Kenyan press, with writers extolling the virtues of the Chinese approach to aid. The basic argument seems to be the following: China cares about infrastructure and wants to invest in real development projects, no questions asked. The West is obsessed with good governance and only provides aid with lots of conditions attached. The conclusion is facile: China rules.

I am quite in favour of African countries negotiating the best deals they can get by playing off different donors against each other. Everyone is ultimately self-interested in this game, and African governments will and should pursue their own best interests.

Some aid “conditionalities” are onerous and unjust, but it does not follow that Chinese aid is superior because it is unconditional: Africans do not always benefit when their governments do, which is why so many big investment projects in Africa have led not to greater development, but to grander corruption. If African governments are not encouraged to be transparent, or to promote oversight institutions, there is a greater risk that big money, wherever it comes from, will lead to big waste.

Nevertheless, what is truly irksome about these recent columns is that their writers are ignorant of the most basic facts about what “traditional” donors actually fund.

Is it true, for example, as one Dann Mwangi suggests in the Daily Nation, that donors “like the US have preferred to pump money into workshops and conferences in the name of democratisation at the expense of development”? Basic data on what donors pay for in Kenya is available, but most polemicists seem uninterested in checking their facts.

So let’s do their homework for them. In 2009/10, according to the Kenyan Ministry of Planning’s 2010 Public Expenditure Review (PER), 56 per cent of public health spending (amounting to around Ksh60 billion, over $700 million) was paid for by donors.

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Donor-dominated

Nearly three quarters of this came from a single donor: the United States. Kenyans still spend a lot on healthcare out of pocket, but without Western donor support, they would spend even more, and become further impoverished. Does Mr Mwangi sincerely believe that this health spending comes “at the expense of development”?

The health sector is particularly donor-dominated, but Western donors make a significant contribution to a number of other sectors as well. For example, the 2010 PER shows that donors contributed about 18 per cent of total funds in the water and sanitation sector (Ksh5.6 billion, some $67 million). The agriculture sector receives at least 10 per cent of its funding from development partners.

Another source of information on donor financing in Kenya is the Ministry of Finance’s External Resources Department. The Department’s report, “Development Estimates 2010/11” breaks down total donor resources by country and project.

Chinese support

The figures in this report certainly reveal the massive size of Chinese support: nearly Ksh16 billion in loans, and more than Ksh1 billion in grants in fiscal year 2010/2011 (a total of around $205 million). But we must also keep this in perspective: Chinese funds amount to roughly 12 per cent of the total donor resources that Kenya receives. Official Chinese aid is also only one-third of what the US spends on health alone.

Now, let’s look at what China funds. Three quarters of Chinese funding (Ksh13.6 billion, or $164 million, out of Ksh17 billion) went to three infrastructure projects: Thika Highway, the Nairobi Eastern and Northern Bypass, and drilling of geothermal wells. Another Ksh1.5 billion ($18 million) went for a power distribution project, and nearly a billion for a sports centre in Kasarani.

So China does, as the stereotypes suggest, fund big infrastructure. But what about the West? If we look at all official donor funding for projects under the Ministry of Energy in FY 2010/11, China contributed the greatest single share of any country: Ksh5.8 billion ($70 million). But this was still less than half of total donor funding in that sector, where the rest of the Ksh13 billion ($156 million) plus were invested by Germany, Belgium, Spain, and the World Bank, among others.

The roads sector is where President Kibaki has staked his legacy, and here China has made a contribution of over Ksh9 billion ($108 million). Again, however, this is merely a fraction of the nearly Ksh40 billion ($482 million) that went into this sector in 2010/11.

The balance was primarily funded by the African Development Bank and the World Bank through their concessional arms (ADF and IDA). These institutions are dominated by Western donors, though China also contributes to them. However, taking the ADF as an example, China’s contribution is only 16 per cent of the US contribution, and 18 per cent of France’s.

There are many things that one can criticise Western donor countries for. A failure to invest in core development areas is not one of them. The data speak for themselves, if anyone cares to look.

Dr Jason Lakin is a programme officer and research fellow at the International Budget Partnership. [email protected]

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