Tag Archives: aid

Ugandan People’s Defense Forces raid on opposition candidate Bobi Wine’s Headquarters puts US in awkward position

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The UPDF has raided the political headquarters of Ugandan opposition MP and presidential candidate Bobi Wine, per Reuters and other news reports.

Wine, whose real name is Robert Kyagulanyi, told Reuters dozens of police and soldiers barged into the offices of his National Unity Platform (NUP) party in Kamwokya, a suburb of the Ugandan capital Kampala

The security personnel, he said, seized documents containing signatures from supporters that his party had collected to back his nomination, as well as 23 million shillings ($6,207.83).

We have Americans working to support Bobi Wine, and presumably Museveni as well, in the campaigns, and Americans working through USAID to support the democratic process. Uganda has always been a challenging environment on democratization–one in which our diplomats face an extra helping of competing priorities.

Uganda has never had a peaceful transition of power but remains more stable under Museveni’s rule than at most times prior to his military ascension in 1986. Museveni is a critic of the West who generally does business with the United States and generally facilitates our humanitarian and development aid programs, while doing business as well with China, North Korea, the former Gaddafi regime in Libya and other non-democratic actors.

Over the years that I have been informally watching (since 2008 really) we have offered occasional but muted criticism of Museveni’s disappointing performance on “deepening democracy”. See, i.e., “Uganda: Retiring US Ambassador “stings Museveni for overstaying in power” but emphasizes support for Uganda’s role in regional stability”.

Uganda billboard Museveni and Gaddafi

The use of the Ugandan military in the domestic election process against democratic norms, however, presents a particular problem because of the strong military-military relationship.

Ten years ago, ahead of Uganda’s 2011 election, I wrote a blog post entitled “Democracy and Competing Objectives: We need you to back us up”:

I also had a senior military officer, a general, say to me, “It really doesn’t help us when you all don’t come out and criticize sort of half-hearted democratic elections. You tell us ‘Democracy, Democracy’; then you accept when we don’t have fully up to a minimal level of standard, because you’ve got presumably some other competing objective there that mitigates against that, because otherwise we don’t understand the point of continuing to strive for that standard. We need you to back us up and to back up our societies.”

This was Kate Almquist, now Senior Fellow for Security and Development at the Africa Center for Strategic Studies, at a Military Strategy Forum on AFRICOM at CSIS in July (2010). Ms. Almquist was Assistant Director for Africa at USAID from May 2007 to 2009. She is speaking on a panel, relating her recent discussions with senior African military leaders at the Africa Center in response to a question about “competing objectives” regarding U.S. “strategic partners” including Rwanda, Uganda and Ethiopia, and “how do we know U.S. military support is not increasing autocratic tendencies and not decreasing democratic space?”

Since this event we’ve had a substandard election season in Rwanda–as well as the leak of a draft UN report using the term genocide in reference to Rwandan activity in the DRC. In Uganda, Museveni has announced formally that he is running for re-election, while continuing to refuse action to relinquish the unilateral appointment of the Electoral Commission. At the same time, Rwanda is threatening to pull its “peacekeeping” soldiers out of Darfur, and Uganda is offering an additional 10,000 soldiers to be “peacekeepers” in Somalia. The conundrums continue.

Here is a link to the audio and video from CSIS (also available on podcast). This discussion starts at 32:50 in the panel following General Ward’s speech.

The U.S. “official” infatuation with Kenya, in numbers

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I’ve spent some time looking at “Official Development Assistance” (“ODA”) numbers for Africa to test my perception that the U.S. seems, for some reason that is hard to pin down, to give an inordinate amount of “development” money to Kenya.

At play Monkeys at play on UN vehicle

Sure enough. Going through the ODA summaries by country from the OECD, for each of 47 countries in continental Africa, we find plenty of verification of this. The U.S. is the leading bilateral ODA donor for 25 of the 47, including Kenya (Kenya’s number two donor is Japan). Kenya is the number three recipient of bilateral ODA from the U.S. for a 2010-2011 annual average (the most recent listing) of $642M, behind only the Democratic Republic of Congo at $1,053M and Ethipia at $791M.

On a per capita basis this is $15.53 for DRC, $15.43 for Kenya and $9.34 for Ethiopia. What about “need” based on poverty? PIn the DRC the Gross National Income (GNI) per capita is $190; in Ethiopia $400. Kenya, on the other hand, has a GNI per capita of $820, more than double that of Ethiopia and well more than four times that of the DRC.

Across the continent as a whole, Kenya ranks ninth in per capita U.S. ODA. Three countries of those getting more per capita are special cases: Liberia and South Sudan, post-conflict states where the U.S. has a special historic relationship and responsibility relating to the founding of the country itself and Libya, an immediate post-conflict situation where the U.S. government was instrumental in supporting the removal of the prior regime. All of the recipients ahead of Kenya except for the DRC have relatively small populations.

Among the five countries of the East African Community, Kenya receives both the largest amount and the most per capita in ODA from the U.S., even though its GNI per capita is by far the largest:

Country        GNI Per Capita      U.S. Bilateral ODA      Per Capita      Rank/Reference

Burundi           $250                             $48M                      $5.58        2 (1-Belgium 161M)

Kenya             $820                              $642M                   $15.43       1 (2-Japan $139M)

Tanzania         $540                             $546M                    $10.74          1 (2-UK $219M)

Rwanda           $570                             $167M                   $15.32           1 (2-UK $121M)

Uganda           $510                              $388M                   $11.24           1 (2-UK $163M)

————-
And a sampling of other countries of interest:

Somalia           —-                                 $90M                      $9.38           2 (2-UK $107M)

C.A.R.           $470                                $16M                      $3.56           3 (1-France $29M)

Malawi          $340                                $140M                    $9.69           1 (2-UK $126M)

Mali               $610                                $232M                  $14.68          1 (2-Canada $106M)

Niger             $360                                  $97M                     $6.02          1 (2-France $56M)

Chad              $690                                $124M                    $10.75       1 (2-France 45M)

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State of U.S. economic interchange with Kenya

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So where do things stand economically between the United States and Kenya at the start of the Administration’s “new policy” for Sub-Saharan Africa?

Faded Aid

From the East African’s coverage of the Gration resignation, Envoy’s exit underlines new US strategy in Africa:

Over the past five years, the US clout in the local economic scene has been declining as Kenya continues to look east, specifically to China, India and Japan for aid. Whereas the US continues to be a major source of development aid, disbursing an estimated $3 billion between 2008 and 2011, China, India and Japan have emerged as new sources of infrastructure funding.

China is currently carrying out improvements of roads in Nairobi, while Japan is actively supporting the country’s energy sector.

America’s support has largely focused on health and military funding, with the US government set to give Kenya $14 million in military help this year.

In trade, whereas imports from the US have stagnated at Ksh45 billion ($535 million) since 2007, Kenya’s imports from China and India have more than tripled, rising from Ksh46 billion ($547 million) and Ksh56 billion ($667 million) to Ksh144 billion ($1.7 billion) and Ksh148 billion ($1.8 billion) respectively.

Kenyans had been hoping that General Gration, who spent his childhood in Democratic Republic of the Congo and Kenya, and spoke fluent Kiswahili, would take US-Kenya relations to a new level given his knowledge of Kenya, its people, its language, and its culture.  .  .  .

Assistant Secretary of State Carson testified on June 28 before the Senate Foreign Relations Committee on “Economic Statecraft” emphasizing the importance of the renewal of the Third Country Fabric provisions under AGOA, and the harm caused by uncertainty:

. . . As you know, many African countries are not taking full advantage of the benefits of AGOA. However, some AGOA beneficiary countries take good advantage of the provisions for fabric and apparel product lines. The third country fabric provision component of AGOA was designed to provide an opportunity for AGOA-qualified countries to be more competitive in labor intensive textile processes such as sewing, stitching, and cutting fabric.

It was widely recognized that most African countries were not able to compete in the more capital intensive process of producing fabric from raw cotton. African manufacturers have successfully used the AGOA third country fabric provision to create jobs, not just in the manufacturing countries but have used this provision to create cross-border pan-African supply chains. These supply chains also encourage regional integration – one of our key goals for the continent. Fabric and apparel exports are the second largest AGOA export after extractive industry products. However, these imports still account for less than two percent of U.S. imports.

I’d like to say a few words about what is likely to happen if third country fabric is not renewed. In our globally linked world, American buyers place orders six to nine to twelve months ahead. 95 percent of AGOA apparel and textile exports enter under the third country provision. And the AGOA third country fabric provision is the only way that African textile and apparel companies can remain competitive with larger producers such as China, Vietnam, and Bangladesh.

Without our help, jobs will continue to disappear in some of Africa’s most vulnerable economies, affecting primarily women and the families they support. Eighty-five percent of these imports come from just four countries: Lesotho, Kenya, Mauritius, and Swaziland.I know that diplomats from these countries have come to see you to emphasize the disproportionate effect that lack of renewal of this provision will have on their economies.

The effects of the loss of orders are troubling. At the AGOA Forum, the Swazi Minister for Trade told AGOA delegates that the loss of the provision will “shut the country down”. The textile and apparel sector is the largest formal sector employer with over 15,000 jobs and employment is already 41 percent in this small, landlocked country. Loss of just one of these jobs means that ten people lose their livelihood, since Swazi officials calculate that each textile job directly supports ten people. Lack of orders have already led to plants closures in Namibia, robbing people of their legitimate livelihoods and governments of much needed tax revenues. The Mauritians report that their orders are down 30 percent since January due to the uncertainty whether this provision will be renewed in a timely fashion.

The Trade and Politics Blog indicates that passage of the new bi-partisan legislation to extend the third country fabric provision is finally expected by the end of July before the Congressional Augut recess.  I hope this get squared away as soon as possible.

See “Africa Bureau announces vision to revitalize AGOA” and comment by Dr. Richard Mutule Kilonzo, Chief Executive, Kenya Export Processing Zones Authority:

The potential impact of a delayed renewal of the third country fabric provision of AGOA is grave. Third country fabric is the most successful components of the AGOA legislation and can be credited with over 100,000 direct jobs in Sub-Saharan Africa. Apparel orders are drying up due to the uncertainty surrounding the provision. In Kenya alone, over 40,000 factory workers could very likely lose their jobs if third country fabric is not renewed in a timely manner. The apparel industry in SSA rely on the third country fabric provision; without it there is a very real possibility that the investors in the apparel factories will pack up and move production to some other part of the world as happened in Madagascar following its loss of AGOA eligibility in 2009. This would cause enormous economic strife in countries that are strong partners of the United States. On September 30, 2012, the third country fabric AGOA provision will expire. With barely six months to go, further delay threatens the lives of 1 Million people, mostly women who work in the apparel sector. We estimate that each factory worker supports ten additional people. If third country fabric is not renewed soon, these jobs will disappear and Africa’s poverty rate will sour by over 55%.

Horn of Africa Famine Updates

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Africa Works has a short post today that I will quote in full, recognizing the hard reality:

Africa Works (G. Pascal Zachary):  Somalia and the limits of humanitarian aid:

Jeffrey Gettleman’s excellent article on the Somali famine presents a useful reminder of Amartya Sen’s famous insight that famines, chiefly, are human constructions. The persistence of famines isn’t a tragedy but rather a consequence of social and political breakdowns. In the Somali case, the country’s long civil war– and the tactics used by contending factions — means that famine is a tool of combat rather than the result of “food shortages” as such.

Because famines usually arise from dysfunctional distribution of food resources (rather than from an absolute shortage of food), aid agencies are inevitably limited in what they can do to alleviate famines. Moreoever, realities on the ground mean that famine aid inevitably benefits combatants as much or more than the truly needy. In Somalia, political dysfunction mocks the good intentions of relief agents. That famines are man-made does not obviate the need for famine relief efforts. However, the social construction of famines ought to give rise to a parallel public understanding of why famines persist and the limits of humanitarian aid.

The U.S. State Department has a “background briefing” on “Somalia and the Delivery of Humanitarian Assistance”:

. . . nearly 12 million people primarily in Ethiopia, Kenya, and Somalia in urgent need of humanitarian assistance. Three reasons for this: This two-year drought that we’re currently experiencing, which is part of a 60-year drought cycle; then continued lack of central government in Somalia; and then the work of al-Shabaab or the depredations of al-Shabaab in southern and central Somalia.

We are taking all of the necessary steps. We’re doing everything we can to provide assistance to Somalis in need. That is really – right now our primary concern is helping to save lives in the Horn of Africa. And I just have to point out that it’s not a coincidence that the two areas in Somalia where the UN has declared famine conditions exist are areas under al-Shabaab’s control. Be that as it may, we are doing everything we can to get aid to people who need it. And we do remain, of course, concerned about the actions of al-Shabaab. And so as we’re delivering aid to people in need, we have got to take care that al-Shabaab is not able to profit from this humanitarian crisis.

Now, U.S. law has never prohibited humanitarian assistance to people in need in Somalia. In fact, about 90 million – or rather, about $80 million of our aid thus far has, in fact, been delivered to people in Somalia. But in the face of this evolving crisis and the extreme humanitarian needs, we have issued new guidance to allow more flexibility and to provide a wider range of age – of aid to a larger number of areas in need. We hope this guidance will clarify that aid workers who are partnering with the U.S. Government to help save lives under difficult and dangerous conditions are not in conflict with U.S. laws and regulations that seek to limit the resources or to eliminate resources flowing to al-Shabaab.

. . . .

We don’t expect there to be any grand bargain where we’ll be able to have access to all of southern Somalia, but we are working to find whatever ways we can to deliver that assistance and have a significant contribution of food arriving as we speak.

19,000 metric tons started arriving last week. We have been working throughout the Horn since the early warning systems alerted us to a possible drought last fall, and we were able to preposition supplies and increase programming throughout the Horn. The difficulty has been access in southern Somalia, and so that is the biggest challenge facing us right now, is how to get aid to the people who need it most who are still stuck inside of south Somalia. We’ve seen a huge refugee outflow into Ethiopia and Kenya as well as a significant displacement – about 1.6 million Somalis have fled north into the urban areas, which is – also presents a humanitarian challenge for us.

We believe that there will be ways and opportunities to move selectively into parts of southern Somalia with food, health – health is a critical piece of this given the leading cause of death in the ’92 famine was health-related causes – and send the therapeutic and supplemental feeding that will help save lives. We’re moving aggressively to provide all of that assistance.

Owen Barder at “Owen Abroad” has excellent background on the context of the famine and how preparation from past experience and political divergence make the situation now so different in Somalia and Ethiopia. And links on where each of us can contribute financially to relief efforts. (h/t Texas in Africa).

Ongoing East African Food Crisis Continues to Worsen

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“Famine in East Africa: A Catastrophe in the Making,” Der Speigel:

Eastern Africa is baking under a merciless sun; the last two rainy seasons have brought no precipitation at all. It is said to be the worst drought since 1950. And hunger comes at its the heels. In Somalia, Ethiopia, Kenya, Djibouti, and Uganda, people are suffering like they haven’t in a long while. The UN estimates that some 12 million people are already faced with hunger. And that is likely just the beginning.

There are many indications that the situation will only worsen in the coming weeks. For the moment, many of the regions in eastern Africa are classified by the UNHCR as “emergency” areas. But on Wednesday, the UNHCR declared famine in two regions in southern Somalia and said that it could spread unless enough donors can be found to help those in need. “If we don’t act now, famine will spread to all eight regions of southern Somalia within two months,” said Mark Bowden, humanitarian coordinator for Somalia.

It is a catastrophe that has been a long time in coming. Experts have been warning of the approaching famine for months and the causes are clear. They also know that the current disaster won’t be the last. As a result of climate change, it has become increasingly the case that rainy seasons fail to materialize in the region. Adding to the problem, the population in the countries currently suffering has quadrupled in recent decades, from 41 million to 167 million. Plus, aid organizations tend to budget most of their money for emergency situations, leaving little left over for wells, fertilizer, seeds and efforts to teach farmers how to make the most from their plots of land — all measures that could forestall the next disaster.

Somalia has been especially hard hit because the Islamists from the al-Shabab militia, who are fighting against the country’s government, have chased almost all aid organizations out of the country.  .  .  .

.  .  .  .

Despite the difficulties, the WFP has managed to more or less rebuild the harbor in recent years. Warships from the European Union anti-piracy mission Atalanta guide freighters full of aid supplies through the pirate infested waters and into the harbor.  .  .  .

. . . .

An equally large problem is the phenomenon known in aid circles as “donor fatigue.” People around the world are becoming tired of sending money to Africa, where nothing ever seems to change. Just last year, the WFP asked rich countries for $500 million to combat hunger on the Horn of Africa. They were unable to raise even half of that. And that despite the fact that the scientists working for the US-based Famine Early Warning System have long been warning that first the crops, then the animals and finally the people themselves would begin dying should the rainy season fail to materialize.

“Refugees flee famine stricken Somalia”, NPR

UK Cuts Education Aid Once Again in Lastest Round on Kenyan Education Scandals (Updated)

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Update, June 16: The Irish Times reports that the U.K. will “push hard” for return of its share of stolen education aid funds.

The country’s finance minister Uhuru Kenyatta said the names of officials investigated had been given to the police, but analysts said the chances of prosecutions were low.

“Handing over reports to the criminal investigations department of the Kenyan police force is a good way of shelving investigations,” said Mwalimu Mati, chief executive officer at the corruption watchdog Mars Group Kenya. “It is hard to see how such a discredited police force can bring about justice when they are still investing in Anglo Leasing and Goldenberg.”

The Goldenberg scandal, which cost the country over 10 per cent of GDP, dates back to the early 1990s. It saw the government of Kenya pay out hundreds of millions of dollars of public money in a bogus gold export scheme. No government officials have been prosecuted for their part in it.

Despite coming to power in December 2002 on a strong anti-graft platform, President Mwai Kibaki has failed to stamp out corruption in east Africa’s largest economy. Kenya has slipped down the rankings of Transparency International’s 2010 corruption perceptions index, falling to 154 out of 178 countries.

Last year the government said it could be losing $4 billion, nearly one-third of the national budget, to kickbacks and other forms of corruption.

“Kenya is good at talking about corruption cases,” Teresa Omondi, the deputy executive director of Transparency International – Kenya, said, “but not at prosecuting anyone in them. The fact that no stringent action is ever taken means there is a risk of us hearing about all this again next year.”

“UK cuts education aid by Sh300m”, Daily Nation:

The government was on Tuesday put under pressure to rein in corruption within its ranks, with the United Kingdom announcing a Sh300 million education budget cut.

British High Commissioner Rob Macaire said that they will continue funding education, but only through non-governmental channels until the Ministry of Education adopted prudent financial management systems.

This year, the British Government has allocated Sh1.3 billion to fund various educational programmes through these channels.

“It is shocking that civil servants in trusted positions in the government would steal such an amount of money.

“We share in the outrage of Kenyans about this, because there is UK taxpayers money involved too,” Mr Macaire said.

He was responding to fresh investigations by Treasury over a Sh4.2 billion fraud in the Education ministry.

“This should not be allowed, neither tolerated,” he said, adding that the culprits should be prosecuted.

So far, the Department for International Development (DfID) has supplied 320,000 children in slums with textbooks in 1,100 selected schools.

Mr Mike Harrison, deputy director at DfID, said unless financial transactions are electronic, they would not fund the ministry.

“We need some concrete proof that the financial management in the ministry are turned around.

“Electronic money transfer will have to be at the heart of the system unlike today where paper transfer is easily doctored.”

.  .  .  .

See, “Treasury audit reveals Sh5.8bn fraud”, Daily Nation.  “Education and Medical Services staff probed over Sh 6.2bn loss“, The Star.

Dancing with the Data We Have

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Daniel Kaufmann draws lessons from the events in the Middle East:

‘Tunisia, Egypt and Beyond:  Fewer Predictions, More Data and Aid Reform Needed,’ The Kauffmann Governance Post

The Worldwide Governance Indicators (WGI), which has been compiled since the mid-1990s, measure six components of governance. One very important component is Voice and Democratic Accountability (V&A). The V&A indicator measures not only whether countries hold elections, but also whether these are truly contested, legitimate, free and fair, whether the government is accountable to its citizens, and whether there are basic freedoms of expression and association, including protection of media freedoms, of civil society, and against human rights abuses.The sobering reality is that in terms of Voice and Democratic Accountability, the Middle East has rated very poorly relative to the rest of the world for many years. With very few exceptions, there is little variation on this indicator across the region. Worse, even though the region began the past decade underperforming on V&A, most every country in the region has deteriorated since and ended the decade at even lower levels of V&A.

Figure 1 below shows the extent to which the Middle East has been afflicted by a severe deficit in accountability. In fact, all Middle East countries, with the exception of Israel, rank in the bottom half of the world on V&A. Within the Arab world, Lebanon and Kuwait are above the rest, but still remain in the bottom third globally. The remaining Middle East countries perform even worse, in the bottom quartile (25th percentile or below) in the V&A component, including Tunisia and Egypt (both underperformed rather similarly). Countries like Iran, (North) Sudan, Syria, Saudi Arabia and Libya rank among the very bottom (10th percentile or below).

From a broader global perspective, Egypt’s percentile rank, at a lowly 15.6 (out of a maximum of 100) in 2009 (meaning that over 170 countries around the world rated above Egypt) compares extremely poorly with countries like South Africa (67th percentile), Brazil (62), Ghana (61) and Indonesia (49). By the end of the decade, Egypt rated similarly in V&A to countries like Cote d’Ivoire, Angola and Congo.

So here we have a comparison of the Voice and Accountability measure from the World Governance Indicators for the five countries of the East African Community, plus Sudan and Ethiopia, along with Tunisia and Egypt (for 2009, the most recent):

Tanzania–43.6

Kenya–37.4

Uganda–33.2

Burundi–28

Egypt–15.2

Ethiopia–12.3

Rwanda–10.9

Sudan–6.2

Libya–2.8

To prepare for the Uganda election February 18, here is the full Uganda Country Report for the World Governance Indicators with links to the sources of the original data.

Dr. Kaufmann goes to look at aid spending:

. .  .  .  Let us look specifically at how donors have responded to the democratic deficit in the Middle East over the past decade.

On aggregate, as Figure 2 indicates, donors have been oblivious to poor democratic governance in the region. In fact, while Voice and Accountability have deteriorated over the past decade, aid increased significantly, even when excluding the ‘special case’ of Iraq from this sample (from US $6.2 billion to $10.5 billion). In fact, almost all of donor development aid is channeled to Middle East countries that have low democratic accountability by the standards of other developing countries.

Are we doing any better in East Africa or are we ‘oblivious’ as well?  Simply looking at the “Voice and Democratic Accountability” scores raises obvious questions . . . .

Meanwhile, in the Kenyan hinterlands, the usual emergency starts again . . .

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Another drought, more famine.  One of the early and formative conversations I had shortly after arriving to work in Kenya was with a judge who encouraged me to take note of the living conditions of the people that he saw in the pastoralist regions when he traveled to remote courts: “it is hard to believe that they are Kenyans” and yet lived in such difficult circumstances.

During the last drought in 2008-09 we had the infamous Maize Scandal, the first big new scandal for the Grand Coalition, and as yet unresolved.  How will the Government of Kenya respond this time, or is this just an issue between the outside humanitarians and the locals and not worth notice in Nairobi?

Act now to mitigate drought effects, say aid agencies, IRIN

Kenya can best mitigate the devastating effects of recurrent drought by strengthening the livestock sector so that it becomes a viable money-based economy, and improving pastoral food and water security, say aid officials.

“Responding to drought has largely remained a reactive mechanism over the years,” Enrico Eminae, Action Aid Kenya’s Northeast Regional Coordinator, told IRIN. “There is also a lack of a coordinated approach by CSOs [civil society organizations] and government in addressing drought-related issues at all levels.”

According to the Kenya Red Cross Society (KRCS) Secretary-General, Abbas Gullet, drought mitigation should focus on addressing vulnerability factors through activities such as dam construction and investments in irrigated farming in marginal areas.

.  .  .  .

“The story of drought and famine is almost becoming a cliché in Kenya,” noted Damaris Mateche, environmental security analyst at the Institute for Security Studies in Nairobi. “Despite the existing drought early warning systems in the country, drought disaster response mechanisms and coping strategies remain miserably wanting. More often, drought and famine situations degenerate into dire humanitarian crises before the government takes substantial action.” (emphasis added)

“Coping with hardship in pastoralist regions,” IRIN

Aid–gaming the current numbers, with risks in the long term?

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From Ed Cropley at Reuters Africa Blog–“Donors’ aid squeeze to up Africa’s debts”

In 2005, donors at the G8 summit in Gleneagles, Scotland promised to double aid by up to $50 billion in five years — an ambitious promise that has not been matched by reality.
Furthermore, a trend since then towards more aid delivered via grants risks going into reverse as cash-strapped rich-country finance ministers seek out cunning ways to make their development budgets go further.
For instance, by most definitions a bilateral loan qualifies as “aid” if a quarter of it is a grant, meaning donors can cut today’s cost of their aid bill by 75 percent, and then swallow the cost of a low lending rate over the duration of the loan.
“In 2009, France’s proportions of aid going in loans just rocketed,” Coppard said. “This theoretically will need to be paid back.”
The implications of such a switch by other donors would be dire, burying many African states under the same mountain of obligations that triggered the 2005 Heavily Indebted Poor Countries (HIPC) debt forgiveness initiative.
For example, if all its overseas grants became loans tomorrow, Tanzania would be running a budget deficit of a staggering 25 percent of GDP — a ratio that would leave its plans for a $500 million Eurobond dead in the water.

Debt may be appropriate for specific projects that generate government revenues to service the debt, but if borrowed funds are sunk into more general budget substitution, experimentation, projects that reflect donor priorities that may not have local buy-in or results, it seems a stretch to equate a loan to a grant or gift.

Worth noting that Kenya specifically has a had a big run up of domestic debt recently.

Kenyatta reports frustration with US on aid, but new reports show more corruption problems

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From an AP report today, in the Boston Globe:

Kenya’s deputy prime minister, Uhuru Kenyatta, said he also would like to see more cooperation from the United States on stabilizing Somalia and fighting piracy off the Horn of Africa.

Kenyatta said U.S. officials, including Vice President Joe Biden, had said that Kenya could expect more aid through an agreement with the Millennium Challenge Corp. after it pushed through a new constitution.

The constitution was signed in August, but Kenyatta says U.S. development agencies are insisting on evidence of progress in taming corruption.

Kenyatta asked, in his words, “Why do they keep changing the goal posts?”

At the same time, however, the Daily Nation ran a story headlined “Revealed: Fraud and waste of tax billions”:

The government lost billions of shillings from the tax kitty during the 2008/2009, according to the latest Controller and Auditor-General’s report.

Discipline was so poor that ministries spent fortunes and then pushed the bills to the following financial year in the so-called pending bills.

But the biggest scandal is in imprests where government officials are given money for travel, accommodation and other official expenses, which they fail to account for. In the period under review, public officials failed to provide proof of how they spent Sh3.4 billion in imprests.

Paid to fake IDPs

In some cases, the officers could not explain how they spent public money. Some of it was paid to fake internally displaced persons (IDPs) in apparent widespread fraud.

A total of Sh7 billion was poured into funny imprests or nobody can explain how the money was spent.

So prevalent is the imprest abuse and fraud that some of the civil servants have left the service holding the money, meaning that it will never be recovered. The auditor questions why officials were allowed to pile up unaccounted for imprests, even though there were rules on accounting for such funds.

I attended a discussion at the National Endowment for Democracy (NED) back in the summer of 2009 with key Kenyan parliamentary leaders–this was the key theme then when I asked a panel what message they would have to Americans interested in being helpful to Kenya: more aid dollars, through the Millennium Challenge Corporation particularly. It seems to me that good governance and limiting corruption have always been understood to be key MCC criteria. Kenya has a lot going for it–a lot of advantages over other poor countries–so why the special pleading? As long as new scandals continue to accrue while the old ones fester unaddressed, it does not seem to me that Kenyan politicians are entitled to be frustrated with the US for not ramping up government-to-government aid expenditures.