By I. M. D. Little
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Extra info for Aid to Africa. An Appraisal of U.K. Policy for Aid to Africa South of the Sahara
K. aid used to be completely untied. But since 1958, when Commonwealth Assistance Loans were invented, it has been increasingly tied. D. loans now account for about a third of our bilateral financial aid, but also most of our 25 AID TO AFRICA other types of aid, including C D . & W. f are now partly or wholly tied. A distinction must here be made between "donor procurement" and " d o n o r or local" procurement. W i t h the former the aid money can be spent only on imports from the donor: with the latter it can bç spent either on imports from the donor or for local wages or for payment to local suppliers.
First consider repayment conditions. There is no question of Africa not continuing to be in need of aid indefinitely, certainly for another hundred years. If aid is to continue, then short-term loans merely have to be refinanced by the provision of further aid. e. give reverse aid, presupposes a miracle. Admittedly, individual donors may like to be able t o envisage the situation in which they are paid off, although this can happen only if others increase their lending. A s against this, these other donors are not likely to be enamoured of loans which are in effect used to allow others to reduce their creditor positions (except possibly in the context of East-West rivalry).
A s we shall see below, the latter kind of tying reduces the value of aid to the recipient far less than the former. C D . & W. funds can still be used for local procurement. e. donor procurement only. United States aid is, among that of Western donors, the most completely tied. S. procurement: in West Africa, the lower figure of 80 per cent seems to prevail, but this anomaly is probably transitional. A. is also experimenting with opening dollar credit lines to the value of the local cost component of the projects it supports—the counterpart funds being available to meet such local costs.
Aid to Africa. An Appraisal of U.K. Policy for Aid to Africa South of the Sahara by I. M. D. Little