São Paulo – The economic crisis in Europe should have a drastic impact on public aid to African countries. The claim was made in the Africa 2012 report, issued this Tuesday (27th) by the United Nations Economic Commission for Africa (ECA) during a meeting of African finance ministers in Addis Ababa, Ethiopia.
The document stresses that countries such as France and Italy have already reduced their bilateral assistance to Africa as a result of the economic crisis. According to the report, Official Development Assistance (ODA) accounts for 2.8% of Africa’s Gross Domestic Product (GDP).
Although the rate is low, the funds are crucial to some African economies, according to the ECA study. “two thirds of African countries depend on ODA to some extent, and many African countries are heavily reliant on ODA to finance their public spending and capital budgets,” the report claims.
The aid reduction is likely to put pressure on social sectors, the ECA believes, in particular healthcare, education and sanitation, and it should also impact on poverty-reduction efforts in the region. Trade, however, should suffer the most, according to the ECA, because Africa exports large volumes of products to Europe.
Africa grew by 4.6% in 2010 and 2.7% last year. The decline was mostly due to political issues in North Africa, which caused investment risk in the region to go up. Despite the adverse global scenario, however, Africa is expected to grow by 5.1% this year. According to the ECA, The key downside risk lies in export revenues shrinking because of sharply lower world commodity prices and adverse weather conditions.
*Translated by Gabriel Pomerancblum
