Most people around the world are oblivious to the ways in which global power relations determine African governments’ capacity to respond to socio-economic and political challenges. Over the past 100 years, foreign aid structures that began with European colonialism have become tied to shifting economic, social and political interests in favour of the Global North. Even after colonised African states gained their political independence, foreign support as Official Development Assistance (ODA) continued, with a focus on economic development, albeit under the direction of multilateral organisations like the United Nations, the International Monetary Fund (IMF) and the World Bank Group (WBG).
The resultant effects of the way ODA is structured have been that African governments have increasingly lost the policy and fiscal space and sovereignty to develop their own developmental policies, while institutions, as donors, continue to play a significant role through policy conditionalities and programme development. As such, key social sectors like healthcare have become a function, not of the state but of external funding due to shifts from state paternalism to donor paternalism. It is no wonder that the recent decision to immediately freeze global aid flows by the United States Agency for International Development (USAID) sent shockwaves through the global health community. It unleashed a “state of uncertainty” about how HIV/AIDS, tuberculosis, malaria and related programmes will respond. Additionally, the UK’s announcement of further ODA cuts presents further uncertainty.
In 2001, African governments committed to allocating at least 15 per cent of their annual budgets to health financing. However, more than 20 years later, the average allocation of government budgets to healthcare across Africa is 7.2 per cent, less than half of the agreed target. The out-of-pocket expenditure on healthcare in Sub-Saharan Africa averages over 35 per cent of total funding, and is the second-highest rate globally after South Asia. In fact, a 2017 report indicated that out-of-pocket spending in countries like Nigeria, Cameroon, Equatorial Guinea and Sudan was over 70 per cent. This reliance on out-of-pocket spending is systemic and deeply structural, and has placed an unfair burden on citizens.
The resultant effects of the way ODA is structured have been that African governments have increasingly lost the space and sovereignty to develop their own developmental policies while institutions, as donors, continue to play a significant role through policy conditionalities, and programme development.
Structural adjustment and the ‘aid trap’: kicking away the ladder
The role of the Bretton Woods Institutions (BWIs), the World Bank and the IMF, in deepening foreign aid dependency cannot be ignored. In the 1980s, the BWIs pioneered the Structural Adjustment Programmes (SAPs), therefore making financial resources dependent on liberalisation, deregulation and privatisation in regions including Africa and Latin America. SAPs were a set of conditionalities that drove the restructuring of African economies. These included the implementation of austerity programmes, i.e. spending cuts particularly to healthcare, education, social protection, agricultural extension, among others; increasing tax rates, particularly indirect consumption taxes; or a combination of both. Since then, key social sectors such as healthcare have fallen into the hands of donors and the private sector. These reforms have been renamed as ‘prior actions’ in World Bank Development Policy Financing (see Inside the Institutions, What is WBG Development Policy Financing?) and continue to serve the same function – ramping up especially now under the newest wave of austerity.
The BWIs’ austerity policies effectively diminish African states’ direct involvement in development, consequently creating a lacuna that is claimed must be filled by ODA. It is therefore not surprising that the US, the European Union and other wealthy states are key donors, also investing in for-profit healthcare, and consequently benefitting from such investments. As we reflect on the words of former Zambia Vice President Simon Mwansa Kapwepwe, “If as Africans we don’t handle our independence very well, colonisers will come back in the form of investors. Colonialism is like a chameleon, it changes its colours.” It is clear that the dominant influence of Global North states within the IMF that effectively promulgates austerity measures in Africa is not by accident. In the case of the IMF, the US, as the Fund’s largest shareholder with 16.5 per cent of voting power, wields veto power over crucial policy decisions, with some requiring 85 per cent approval.
Historically, donor support has been a notable component of Africa’s health financing, yet it is unsustainable as a primary source. In most Sub-Saharan African nations, donor funding contributes up to 20 per cent of healthcare expenditure. A 2020 study revealed that in Malawi and Mozambique, donor funds accounted for as much as 60 per cent of healthcare expenditure. Donor funds are also often designated for specific health programmes – such as vaccination, HIV/AIDS, malaria, tuberculosis and, more recently, maternal and child health – limiting their flexibility for broader healthcare needs. As such, they promote short-term solutions that centre foreign and corporate-driven interests and treat women, youth, indigenous, black and brown people as third class citizens.
Aid, in whatever form, is a neo-colonial tool and an instrument of imperial domination. African governments, now more than ever, must become more conscious of IMF and WBG policy conditionalities that undermine their sovereignty and space to determine their development trajectories.
Faith Lumonya is a Feminist and Development Economist. She uses her writing and analysis skills to contribute to reflective and radical confrontation of systems and structures that are responsible for inequality and discrimination in society. She serves at Akina Mama wa Afrika as the Economic Justice and Climate Action Lead.
