The End of UK Aid: Is South Africa Ready?

governance aid npos economic growth
Wednesday, 10 July, 2013 - 09:52

The United Kingdom’s excuse for withdrawing aid to South Africa is that the country has seen a sustained growth in its growth domestic product post-1994, putting the country on the same level with countries such as Brazil and Austria, which do not require aid

The roughly one hundred and fifty year long relationship between the United Kingdom (UK) and South Africa, is about to become, for the first time, a relationship of equals . From 2015, the UK will conclude several development projects that it has supported over the last two decades and ultimately end its bilateral, grant-based aid programme to South Africa.(2) Justine Greening, UK Secretary of State for International Development, has recently announced the UK’s desire to move from supplying South Africa with aid, to becoming a partner in trade.(3) The UK, through the Department for International Development (DfID), is currently supporting 11 operational development projects and has completed 15 projects in South Africa over the last decade, with a spending total of £ 66 685 207 104 (about US$ 100 billion). The DfID has prioritised many sectors, however projects that focus on HIV/AIDS have received by far the most Official Development Assistance (ODA).(4) Over the last decade the DfID has not only worked in tandem with the South African Government on projects, but has also channelled aid through independent nonprofit organisations (NPOs).(5) This paper discusses the changing nature of this bilateral relationship, as well as the impact that an altered relationship with the UK will have on South African development.
 
Reasoning behind ending UK aid to South Africa
 
From 1993 until 2012, South Africa’s gross domestic product (GDP) growth rate averaged 3.22 percent.(6) In its fastest expansion since the advent of democracy in 1994, South Africa’s economy grew at an average of 4.5 percent year-on-year from 2002 to 2008.(7) Since South Africa’s economy has grown from strength to strength, the DfID feels justified in its decision to cut aid to South Africa, and has expressed an interest in pursuing a relationship based on trade and investment. This will, in theory, be of economic benefit to both countries. After all, reducing Africa’s dependency on aid is a necessary goal, and one that South Africa, as Africa’s largest economy, should be eager to spearhead. This is also in-line with the fact that, post-1994, the aid relationship between the UK and South Africa was founded in the context of non-dependence (8) and, as a result, aid from the DfID is considered to be almost negligible at a percentage of government expenditure.(9)
 
Greening maintains that the move from aid to trade is a show of faith in South Africa’s economy and will become more influential in Africa and globally, as the move is intended to bolster pan-African trade and support South Africa’s growing role as a development partner for the rest of the continent.(10) In recognition of the progress the country has made in the last 20 years, the new relationship between the UK and South Africa will be based on sharing skills and knowledge, rather than development funding.(11)
 
The UK’s decision to end aid to South Africa has been on the cards for the last few years, with many projects set to conclude before 2015.(12) This change in attitude reflects a need for a shift in the current aid paradigm in which wealthy nations send aid to the South, as this no longer corresponds with the current global economic climate. South Africa, as a developing nation, has achieved a GDP that puts it on par with countries like Brazil (13) and Austria.(14) Based on income levels alone, South Africa is an upper-middle income country.(15) Since the end of apartheid, South Africa has made great strides in development - including becoming an inclusive democracy, increasing the provision of basic services and creating roughly three million jobs.(16)
 
However, despite all the progress South Africa has made since the end of apartheid, there are still 20 million people living below the poverty line.(17) Despite South Africa’s growing economy, it has not been able to turn this growth into human development. South Africa’s Gini coefficient, the measure of the extent to which the distribution of individuals’ or households’ income or consumption expenditure within an economy deviates from a perfectly equal distribution (zero being total equality and one being the greatest inequality), reached 0.70 in 2008, rising from 0.66 in 1993.(18) About 10 percent of the population is HIV positive, unemployment reached 25 percent in 2012,(19) life expectancy at birth is only 53 years and the average number of years of schooling for adults is 8.5.(20) Thus, while South Africa’s development indicators alone render it deserving of aid, some argue, albeit short-sightedly, that  the size, strength and continual growth of its economy means that, in theory, South Africa should be able to mitigate its own poverty levels. Therefore, ODA from the UK should not be needed.(21)
 
However, over 41 percent of the world’s poor live in middle income countries, but despite this the international community continues to reduce aid to these countries.(22) This is problematic as some have asserted that cutting aid to middle income countries ultimately underestimates the impact that this limited aid actually has in countries like South Africa as the little aid that is provided is rendered less effective. Furthermore, ‘local, regional and global development challenges for South Africa are both compounding and increasing exponentially’(23) and, even though aid from the UK has constituted less than a percentage of the South African Government’s expenditure,(24) it is argued that this aid is still vital to human development. The DfID’s continued presence in countries like South Africa can still play a vital ‘role in driving progressive policies on inequality,’(25) which would continue to be of use to South Africa when considering its Gini coefficient.
 
The benefits of UK aid to South Africa
 
It must be asked then, how, in real terms, has the UK’s aid contributed to development in South Africa?  Recent DfID development programmes in South Africa have provided support in the areas of jobs and promotion of economic growth, improved health care, climate change and addressing gender-based violence. Since 1994 the DfID has focused mainly on improving the South African health sector, and has 20 projects in the country linked to the national and three provincial departments of health and a number of non-governmental organisations (NGOs). It has played a piloting role by funding relatively small projects which have helped the South African Government to innovate and improve on the delivery of essential, basic services.(26) Its areas of focus are reproductive health (including HIV) and the development of public sector managerial capacity.(27) Projects like South Africa’s Revitalised Response to AIDS and Health (SARRAH), which focus on improving the governance of integrated and effective responses to HIV/AIDS and health in general, are currently in operation.(28) Furthermore, thanks to the DfID’s projected Operational Plan 2011-2015 for South Africa, 156 000 women have accessed, or will be able to access, early antenatal care. The project will also aid in preventing a projected 400 maternal deaths per year.(29)
 
Aid from the DfID plays a crucial role in providing knowledge and funding to the health department as well as advocacy NPOs.(30) For example, SARRAH has facilitated knowledge transfer by hosting South African health inspectors in the UK to enable them to learn more about National Health System (NHS) standards.(31) Also, the fact that some NPOs have received funding from sources other than the South African Government, strengthens the advocacy abilities of South African civil society, because discourse critical of the state often finds its voice within civil society.(32) For example advocacy organisations like the Treatment Action Campaign (TAC) which, amongst other things, “challenge by means of litigation, lobbying, advocacy and all forms of legitimate social mobilisation, any barrier or obstacle, including unfair discrimination, that limits access to treatment for HIV/AIDS in the private and public sector,” depend on independent funding from the DfID.(33)
 
The South African nonprofit sector
 
Greening said in a statement to the press that she has “agreed with [her] South African counterparts that South Africa is now in a position to fund its own development. It is right that [South Africa and the UK’s] relationship changes to one of mutual cooperation and trade, one that is focused on delivering benefits for the people of Britain and South Africa as well as for Africa as a whole.”(34) However, there is one group that stands to lose more than it gains from the planned cut.
 
The impact of a cut of one fifth of one percentage point of UK aid (35) on South Africa's US$ 123 billion annual budget is expected to be slight, (36) and the issue is not so much whether or not South Africa can afford the cut, but whether the country’s most vulnerable can. The greatest casualty resulting from the change will likely be UK funding to civil society organisations, and this will come at great cost to South Africa’s 20 million poor people. Even though only about 2 percent of DfID aid goes to South African NPOs, any funding is critical to the functioning of these organisations in a country where NPOs close their doors on an almost weekly basis.(37)
 
According to South African NPOs like Aids Legal Network, those infected with HIV stand to lose the most from the UK’s decision to cut aid, as access to UK-funded antiretroviral (ARV) treatment will be diminished.(38) Furthermore, UK-funded projects focused on reducing mother to child transmission of HIV will have to seek funding elsewhere.(39) Charities based in the UK have also expressed some concern in the planned cut in aid to South Africa. Oxfam and ActionAid both assert that this funding cut has come at too short notice, giving UK-funded NPOs little time to find other sources of aid.(40)
 
Funding for NPOs from both the public and private sectors in South Africa has greatly diminished due to the need for austerity and belt-tightening in the wake of the recent global economic crisis. Indeed, the need for austerity has undoubtedly influenced the UK’s decision to cut aid to South Africa and other middle income countries. In a nation where the government has been unable to keep up with the increasing demands of the poor for basic services,(41) the South African nonprofit sector plays a vital part in allowing the country’s poor to access services, guaranteed by the socio-economic rights enshrined in the constitution, which would otherwise be out of reach.(42)  There is certainly some wisdom in Butjwana Seokoma, southern African NGO network SANGONeT’s information manager’s words that “Countries like South Africa should learn to make a difference with the little funds they have, and stop relying on the West to further their own development agendas.”(43) But while the government’s lack of capacity to fulfil its constitutional mandate persists, the poor cannot be left to fend for themselves. While acknowledging that South Africa should fund its own development, Oxfam maintains that UK aid is “still a lifeline” in the face of poverty and inequality.(44)
 
However, the role of civil society organisations extends beyond merely picking up the government’s slack.  The UK’s plan to end aid to South Africa happens to coincide with ‘a steady and slow erosion of South Africa’s democratic space with civil society being one of the most visible sites of this erosion.’(45) Over the last few years South Africa has seen a consistent decline in indicators for ‘voice and accountability’, ‘government effectiveness’ and ‘control of corruption’.(46)
 
It seems the DfID has taken seriously the UK’s proclaimed commitment to promoting good governance and strengthening South African civil society, one of the ‘pillars’ of the South Africa-United Kingdom Strategy adopted in 2011. As Joanna Kerr, Chief Executive of ActionAid, has stated, the DfID has been “good at supporting civil society,” doing a lot to bring issues such as good governance into public view.(47) Governance issues, together with inequality, are still major challenges in South Africa and it may be too early to cut out the critical work that South African NPOs do in these areas by cutting their funding further.
 
Conclusion
 
South Africa’s classification as a middle income country does not belie the fact that aid, even in a limited capacity, has contributed significantly to human development in that more women and children have been afforded better quality health care and more HIV sufferers have benefited from targeted responses in health care. Now projects that have depended on DfID aid need to find alternative donors. Between 2010 and 2011 South Africa received an average of US$ 547 million in ODA from the United States and US$ 176 million from the European Union, the country’s two biggest donors.(48) It is possible that aid from these sources will be able to compensate for the loss from the UK. In addition, DfID-piloted projects like SARRAH have been jointly run by the DfID and the South African Department of Health for a number of years. This bodes well for their future success in that the Department merely has to keep momentum.
 
With the South African Government seemingly most perturbed by what it perceives to be a unilateral move on the part of the UK Government in its cutting the aid without consultation, describing the move as “tantamount to redefining [the UK and South Africa’s] relationship,”(49) the UK’s decision seems more likely to affect relations between the two nations than it will development. Although the prospect of doubling trade by 2015, as agreed upon at the 2011 UK-South Africa bilateral forum, may do much to quiet the waters.
 
However, the future developmental success of projects like SARRAH is also dependent on the scourges that plague South Africa, like inefficiency and corruption, being kept at bay. What will fundamentally change in South Africa is that the UK will no longer be pressured to engage with the South African Government in the context of an aid and development relationship. The South African Government will no longer be forced into policy dialogue with the UK on issues such as transparency, anti-corruption and poverty alleviation. This aspect of DfID funding, within the context of South Africa, is the most important – that actions are held accountable to bodies other than the notoriously corrupt (50) organs of state. South Africa may not miss the £19 million (US$ 30 million) received annually from the DfID, but the accountability that accompanied this ODA most likely will be.
 
Notes:
 
- Lauren Stuart through Consultancy Africa’s Intelligence Africa Watch Unit (africa.watch@consultancyafrica.com). This CAI paper was developed with the assistance of Claire Furphy and was edited by Nicky Berg.
 
This edition of the CAI Africa Unit Watch Issues Newsletter is republished here with permission from Consultancy Africa Intelligence (CAI), a South African-based research and strategy firm with a focus on social, health, political and economic trends and developments in Africa. For more information, see www.consultancyafrica.com or www.ngopulse.org/press-release/consultancy-africa-intelligence.
 
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(2) Glennie, J. and Hubert, J., ‘UK should revisit its decision on South Africa and its concept of aid’, The Guardian, 2 May 2013, http://www.guardian.co.uk.
(3) ‘UK to end direct financial support to South Africa’, Inside Gov, 30 April 2013, http//www.gov.uk.
(4) The Department for International Development, http://projects.DfID.gov.uk.
(5) Ibid.
(6) ‘South Africa GDP growth rate’, Trading Economics, http://www.tradingeconomics.com.
(7) Ibid.
(8) Gilson, L. and Schneider, H., 1999. Small fish in a big pond? External aid and the health sector in South Africa. Health Policy and Planning, 14(3), pp. 264-272.
(9) Glennie, J. and Hubert, J., ‘UK should revisit its decision on South Africa and it’s concept of aid’, The Guardian, 2 May 2013,  http://www.guardian.co.uk.
(10) ‘UK to end direct financial support to South Africa’, Inside Gov, 30 April 2013, http//www.gov.uk.
(11) Ibid.
(12) The Department for International Development, http://projects.dfid.gov.uk.
(13) Haddad, L., ‘Should the UK give aid to South Africa?’, Institute of Development Studies, 1 May 2013, http://www.developmenthorizons.com.
(14) Davies, R., ‘UK aid cut-no shock not even a surprise’, The Daily Maverick, 3 May 2013, http://www.dailymaverick.co.za.
(15) Haddad, L., ‘Should the UK give aid to South Africa?’, Institute of Development Studies, 1 May 2013, http://www.developmenthorizons.com.
(16) Glennie, J. and Hubert, J., ‘UK should revisit its decision on South Africa and it’s concept of aid’, The Guardian, 2 May 2013,  http://www.guardian.co.uk.
(17) Haddad, L., ‘Should the UK give aid to South Africa?’, Institute of Development Studies, 1 May 2013, http://www.developmenthorizons.com.
(18) Ibid.
(19) Glennie, J. and Hubert, J., ‘UK should revisit its decision on South Africa and it’s concept of aid’, The Guardian, 2 May 2013, http://www.guardian.co.uk.
(20) ‘South Africa country profile: Human development indicators’, UNDP, http://hdrstats.undp.org.
(21) Haddad, L., ‘Should the UK give aid to South Africa?’, Institute of Development Studies, 1 May 2013, http://www.developmenthorizons.com.
(22) Vasquez, S.T., 2008. Aiding middle income countries? The case of Spain. Oxford Development Studies, 36(4), pp. 409-
(23) Glennie, J. and Hubert, J., ‘UK should revisit its decision on South Africa and it’s concept of aid’, The Guardian, 2 May 2013, http://www.guardian.co.uk.
(24) Davies, R. ‘UK aid cut-no shock not even a surprise’, The Daily Maverick, 3 May 2013, http://www.dailymaverick.co.za.
(25) Glennie, J. and Hubert, J., ‘UK should revisit its decision on South Africa and it’s concept of aid’, The Guardian, 2 May 2013, http://www.guardian.co.uk.
(26) Ibid.
(27) Gilson, L. and Schneider, H., 1999. Small fish in a big pond? External aid and the health sector in South Africa. Health Policy and Planning, 14(3), pp. 264-272.
(28) The Department for International Development, http://projects.DfID.gov.uk.
(29) Ibid.
(30) Glennie, J. and Hubert, J., ‘UK should revisit its decision on South Africa and it’s concept of aid’, The Guardian, 2 May 2013, http://www.guardian.co.uk.
(31) ‘Quality inspectors in training ‘, SARRAH, http://www.sarrahsouthafrica.org.
(32) Mueller–Hirth, N., 2010. “South African NGOs and the public sphere: Between popular movements and partners for development”, in Fowler, A. and Malunga, C. (eds.). NGO management: The Earthscan companion. Earthscan: London.
(33) Treatment Action Campaign website, http://www.tac.org.za; ‘Treatment Action Campaign annual financial statements for the year ended 29 February 2012’, TAC, http://www.tac.org.za.
(34) ‘UK to end direct financial support to South Africa’, Inside Gov, 30 April 2013, http//www.gov.uk.
(35) O'Riordan, A., ‘UK doubles aid budget but ends aid to South Africa’, The South African Civil Society Information Service, 2 May 2013, http://sacsis.org.za.
(36) ‘U.K. to end South Africa aid in 2015’, The Wall Street Journal, 1 May 2013, http://online.wsj.com.
(37) Ravelo, J.L., ‘For NGOs in South Africa, reality gets tougher’, devex, 9 May 2013, https://www.devex.com.
(38) ‘SA NGO’s to suffer the most’, ENCA, 2 May 2013, http://www.enca.com.
(39) Ibid.
(40) Davies, R. ‘UK aid cut-no shock not even a surprise’, The Daily Maverick, 3 May 2013, http://www.dailymaverick.co.za.
(41) Lombard, A., 2008. The implementation of the White Paper for Social Welfare: A ten year review. The Social Work Practitioner-Researcher, 20(2), pp. 155-171.
(42) Wyngard, R., ‘The South African NPO crisis - time to join hands’, SANGO Pulse, 12 March 2013, http://www.ngopulse.org.
(43) Smith, D., ‘South Africa warns aid cut means change in relationship with UK’, The Guardian, 30 April 2013, http://www.guardian.co.uk.
(44) Davies, R. ‘UK aid cut-no shock not even a surprise’, The Daily Maverick, 3 May 2013, http://www.dailymaverick.co.za.
(45) O'Riordan, A., ‘UK doubles aid budget but ends aid to South Africa’, The South African Civil Society Information Service, 2 May 2013, http://sacsis.org.za.
(46) Ibid.
(47) Smith, D., ‘South Africa warns aid cut means change in relationship with UK’, The Guardian, 30 April 2013, http://www.guardian.co.uk.
(48) ‘Aid statistics: Recipients aid at a glance’, OECD, http://www.oecd.org.
(49) Smith, D., ‘South Africa warns aid cut means change in relationship with UK’, The Guardian, 30 April 2013, http://www.guardian.co.uk.
(50) De Waal, M., ‘2013 budget: the cruellest cut of all- funds lost to corruption’, The Daily Maverick, 28 Feb 2013, http://www.dailymaverick.co.za.

 

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