Foreign aid is again in the spotlight after the recent G8 meeting in L’Aquila, Italy. One area that garnered particular attention from the media was the decision by G8 leaders to increase aid to Africa for food security and agricultural development to $20-billion—a 33% increase from the previously promised $15-billion.

While the $20-billiion aid-promise received much attention, a recent article by Yash Tandon from the Southern and Eastern African Trade Information and Negotiations Institute presents a much starker—and realistic—picture.

First, and most importantly, Mr. Tandon points out that the promise from the G8 is, simply, a promise; there is no guarantee the money will ever make its way to African countries.

Secondly, he says the money is likely not new at all, rather it will be recycled from previous commitments—many of which were unfulfilled.

Yet, the most scathing criticism from Mr. Tandon comes in response to the debt payments made by African countries to multilateral agencies such as the World Bank and the IMF. “Between 1990 and 2003,” he says, “African countries had received US$540 billion in loans and had paid back US$580 billion in debt and service charges (US$40 billion more than what they had received), and yet by the end of 2003 US$330 billion debt had still remained to pay.”

“In 2003 alone African countries had paid over US$25 billion in debt servicing,” he quickly points out.

Much of the money that is spent on servicing government debt comes at the expense of funding domestic health programs, Mr. Tandon warns. For example, he says that in 2002 the Democratic Republic of Congo spent more than four dollars on servicing external debt for every dollar spent on health care. And Angola, in the same year, spent $106 per capita in servicing debt compared to just $38 per capita on health programs.

Yet aid-enthusiasts respond that leaders at the 2005 G8 meeting in Gleneagles, Scotland promised to write off $40-billion in debt owed by 18 Highly Indebted Poor Countries (HIPC) to the World Bank, the IMF and the African Development Bank (ADB). But Mr. Tandon responds that a more sober assessment of the promise reveals the “business-as-usual” scenario at the G8.

The $40 billion debt write-off was extended to only 18 HIPCS. “How were they identified, and who selected them?” asks Mr. Tandon. “Africa itself had no say in this. They were selected by the ‘donor community’, not by any agency of Africa, such as the African Union.”

And on what criterion?

“These 18 countries were identified as those that had faithfully followed the IMF/WB strictures on Structural Adjustment Programmes (SAP – policy prescriptions that demanded pro-cyclical, deflationary, measures from these countries). The G8 stated that 20 more countries, with an additional US$15 billion in debt, would be eligible for debt relief on condition that they met targets on fighting corruption and continued to fulfill SAP conditionalities and provided they eliminated impediments to foreign private investments in their countries.”

Mr. Tandon argues that these superficial debt write-offs made matters even worse in Africa, as they relieved the pressure on government leaders on the continent to push for a complete cancellation of these debts on the basis that they were odious and illegitimate. Plus, the decision bolstered false hopes that Africa was finally reaching a turning point, and with the debt cancellation, countries on the continent would be able to better pursue healthy economic growth.

Mr. Tandon says this is simply not the case. “The neutralising of pressure from African civil society was well calculated,” he says. “Taking advantage of the easing of this pressure, the G8 creditor countries now put pressure on African governments to pay their debts and to conform to IMF/WB conditionalities.”

In the end, Mr. Tandon calls for a reassessment of the role of the G8 concerning African countries. “Let us not hitch the African wagon to the G8 engine,” he says. “What looks like an act of benevolence and charity is, in reality, an act of creating subtle forms of debts by which to tie the future of Africa to their single-minded pursuit of capturing Africa’s resources and Africa’s markets.”

This leads Mr. Tandon to dispute the very nature of the term ‘development aid’. “’Development aid’ is, when applied to the reality on the ground, a contradiction in terms.”