Of the ten states, Kenya and Tanzania receive half of the aid money going to Africa

Kenya and Tanzania are heavily dependent on help from wealthy nations and international organizations to cover their government’s budget, making them two of Africa’s top recipients of such monies.

According to a new research by the Mo Ibrahim Foundation, eight African nations—including Kenya, Tanzania, Uganda, and the Democratic Republic of the Congo (DRC)—received nearly half of the official development assistance provided to the continent in 2022. These nations heavily depend on grants even as the amount of official development assistance (ODA) they receive from wealthy nations to fund local government budgets ranges from $2 billion to $8 billion. This is because the donors’ objectives are shifting and the donations are starting to decline.

With the exception of 2018, Africa received the most ODA of any area in the world between 2013 and 2022. But according to the study released this week, ODA received by Africa decreased overall from $86.4 billion in 2020 to $81.4 [billion] in 2022.

Apart from the four countries in the region, the top recipients of aid funds are Egypt, Ethiopia, Nigeria, Mozambique, Morocco, and Niger. The total aid money received by the ten countries in 2022 was $37.8 billion, or 46.4 percent of the aid money coming to the continent.

ODA went to the DRC for $3.4 billion, Kenya for $3.3 billion, Tanzania for $3 billion, and Uganda for $2.4 billion throughout the area.

In the midst of fresh fiscal austerity measures meant to rein in spiraling debt levels, the sum is nearly identical to what the nations hope to generate via increased taxes this year.

Surprisingly, according to the most recent data from the World Bank, these are also some of the richest nations on the continent, together contributing to about 45% of the GDP of the continent.

ODA is undoubtedly a vital source of funding for all African nations, but the majority of it has requirements that must be fulfilled and occasionally forces governments to make difficult choices.

For example, the International Monetary Fund (IMF), which is the largest source of official development assistance (ODA) for Africa along with the World Bank, conditions its donations and concessional loans on economic reforms that frequently result in fiscal consolidation and efforts to increase tax revenues that frequently face opposition.

According to the research, other major contributors, such as the US and the EU, have requirements about political plurality, market-based economies, and occasionally conditionality about immigration, particularly with the EU.

Between 10 and 70 percent of the aid money is not used by African countries and is returned to the donors, suggesting that the strict conditions attached to the gifts are restricting their absorption.

“Many countries face challenges in efficiently utilizing ODA funds as a result of different administrative and political missteps in investment project management,” the research stated.

In 2022, the OECD reported that donor countries receiving official development assistance (ODA) retained 14.4% of the $193 billion in aid that was supposed to be distributed but was never delivered. Additionally, the report states that mislabeling aid amounts resulted in approximately $30 billion being returned to donor countries’ accounts.

In addition to the difficult circumstances that frequently accompany these ODAs, their effect on the economies of the continent may be another reason why they are not beneficial for Africa.

“Official development assistance has not met the challenge of getting African economies out of debt, and several countries have contracted the aid curse,” states the African Development Bank.

In its most recent Africa Economic Outlook report, the continental lender stated that “ODA appears to be positively and significantly associated with the increase in budget deficits and public debt.”