The European Court of Auditors, which monitors European Union spending, has called for an overhaul of the bloc’s development spending programmes for African, Caribbean and Pacific (ACP) countries to prioritise domestic manufacturing and energy.
In a report published on Tuesday (8 September) examining the use of €435 million of EU funding to Kenya between 2014 and 2020, the Court found that the bloc’s ‘standard formula’ for allocating cash to African countries “does not address their specific development obstacles or the funding gap. The country allocations also did not take into account other donors’ grants or loans.”
More broadly, the Court argues that the European Commission should “examine the EU’s method for allocating funding between ACP countries and make it conditional upon the recipient country’s performance and commitment to reforms.”
“We did not see sufficient evidence that aid under the 11th European Development Fund is channelled to where it can do most to reduce poverty,” said Juhan Parts, the ECA Member responsible for the report.
“Job creation is the most effective and sustainable way to reduce poverty, so EU funds should primarily be focused on economic development,” he added.
In July, EU leaders agreed a seven year budget plan that will allocate €26 billion to programmes in sub-Saharan Africa between 2021 and 2027. However, development spending from Europe is likely to come under further pressure in the wake of the COVID-19 pandemic, with recessions among donor countries expected to significantly reduce aid budgets.
African leaders are expected to demand more support for their manufacturing, agriculture and energy sectors at an EU-African Union summit scheduled for October, although EU officials are tight-lipped on whether the summit will have to be postponed as a result of COVID-19. The summit had been ear-marked as the setpiece when the two sides would agree on a ‘strategic partnership’ between the two continents.
African diplomats have complained for years that EU funding programmes are difficult to access and that cash is spread too thinly. They have urged the Commission to focus on increasing private sector development and job creation, investment in the renewable energy sector, transport and logistics.
The report by the Luxembourg-based ECA states that it had “found no reason why the Commission and the EEAS had chosen not to directly support the manufacturing sector, a sector which has great potential to create jobs.”
In Kenya, the Court noted that €228.5 million had been allocated to food security and climate resilience, saying the funds are “likely to improve the living standard of the rural communities and small farmers, particularly in dry areas”.
However, the Court added that the EU funding programme for Kenya “does not help progress towards farming commercialisation and the expansion of agro-processing.”
Meanwhile, the €175 million provided for energy and transport infrastructure was “too limited to achieve the very ambitious objectives agreed with the Kenyan authorities and to make a significant impact.”
(Edited by Frédéric Simon)