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THE INTERNATIONAL COMMUNIT Y AND DE VELOPMENT
FIGURE 5.12 Net ODA varies widely as a share of GNI in Sub-Saharan Africa Angola Benin Burkina Faso Burundi Cameroon Centrtal African Republic Chad Congo, Dem. Rep. Congo, Rep. Côte d’lvoire Ethiopia Ghana Guinea Guinea Bissau Kenya Liberia Madagascar Malawi Mali Mozambique Niger Nigeria Rwanda Senegal Sierra Leone Sudan Tanzania Togo Uganda Zambia
GLOBAL MONITORING REPORT 2010
demand and the relative merits or difficulties of investing in a given country. But donor agreement to clarify defi nitions and benchmarks would help set the stage for a besteffort commitment from all donors to raise ODA in some subset of countries faster than the average growth rate. Large-scale reallocation of current aid is neither feasible nor desirable, but donors should consider rebalancing future aid increases.
Debt relief: progress and challenges
0
20
40
60
80 100 120 140 160 180 200
ratio of ODA to GNI, % ODA/GNI Source: OECD DAC.
according to two benchmarks, and 7—mostly in Sub-Saharan A frica— according to three or more benchmarks. Under the IDA performance-based aid allocation formula, the amount required to raise aid levels to the norm is estimated at $3.3 billion a year; under the poverty efficiency benchmark, the amount rises to $12.5 billion. These are large amounts representing roughly 7 percent and 25 percent, respectively, of programmable aid from bilateral donors to countries excluding SubSaharan Africa. Variations in aid are not just supply driven. The decision to provide or withhold aid depends on many factors, including effective
Since the Monterrey Conference on Financing for Development in 2002, substantial progress has been made in implementing the Heavily Indebted Poor Countries (HIPC) Initiative and the Multilateral Debt Relief Initiative (MDRI). Of 40 eligible countries, 35 have passed the decision point and qualified for HIPC assistance. Of those, 28 countries have reached the completion point and qualify for debt relief as of January 2010. Several other countries are also well on their way to the completion point. As a result, the debt burdens of many poor countries have been markedly reduced. The overall assistance committed to the 35 post-decision-point countries represents an average of 40 percent of their 2008 GDP and, together with relief under traditional mechanisms and additional relief from Paris Club creditors, is expected to reduce their debt burden by more than 80 percent (figure 5.13). Poverty-reducing expenditures in these countries rose 2 percentage points of GDP between 2001 and 2008, while debt service obligations declined correspondingly. Commercial creditors have also increased debt relief, largely through substantive debt relief to Côte d’Ivoire and Liberia. Debt relief for Côte d’Ivoire was provided through a rescheduling agreement in 1998. In April 2009 commercial creditors provided full debt relief to Liberia under a debt buyback operation supported by IDA’s Debt Reduction Facility and contributions from bilateral donors. Litigation by commercial creditors, an impediment to delivering full debt relief to heavily indebted poor countries, appears to have lessened although a small number of