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Africa Should Reduce Aid-Dependency and Explore Alternative Sources of Development Finance – AfDB President Donald Kaberuka


Tunis, 4 November 2010 - Africa must reduce aid-dependency and foster new alternative sources of development finance, the African Development Bank (AfDB) President, Donald Kaberuka, has said.

Speaking at the opening of a two-day Second Regional Meeting on Aid Effectiveness on Thursday, 4 November 2010, in Tunis, Mr. Kaberuka said that African countries must build an agenda that is internally based, and underscores a reduction of aid-dependency.

African countries must consider returning to the international financial markets, and also use the untapped potential in the domestic capital markets. “There is an appetite for Africa,” he said.

“To increase resource mobilization and broaden their tax base, African states need to persuade their citizens that their taxes are being used for public good. Many observers see this implicit bargain between state and citizen as fundamental to democratic development,” Mr. Kaberuka said.

He noted that while aid is still very important, Africa’s development must be driven by strong, private sector-led growth. African leaders should build effective administrations; raise their own revenues to finance their development needs and, in turn, become more accountable to taxpayers for their performance.  They should also create much stronger economic integration across the continent; and build economies of scale to enable Africa better compete in the global economy.

“I believe that it is time to shift the debate from the mechanics of aid delivery to the broader development challenges we will face in the coming years. Aid is only a means to an end. Indeed, if aid is truly effective, it will progressively put itself out of business. Effective aid should therefore be designed with this in mind – to strengthen, not displace, domestic energy and capacity; and to build up, not replace, alternative sources of development finance. This is a new way of thinking about development partnership,” Mr. Kaberuka said.

The AfDB is hosting the two-day Second Regional Meeting on Aid Effectiveness, South-South Cooperation and Capacity Development, jointly organized with the NEPAD Planning and Coordinating Agency, and the African Union.

Participants comprise delegates from across Africa, including ministers, senior government officials, parliamentarians, representatives of civil society organisations, the private sector and the academia.

The outcomes will help consolidate the continent’s strategies, agenda and emerging positions at the Fourth High-Level Forum on Aid Effectiveness (HLF-4) which will take place in Busan, South Korea, in November 2011.

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