Friday, November 16, 2007

General budget support

In Tanzania aid accounts for more than 40% of the national budget. Several European countries have been sending their aid money straight into the government’s treasury and not for specific projects. The approach is called ’general budget support’. Proponents of that system say that it forces the government to be accountable to its people and also argue it’s the only way to phase out aid dependence in countries like Tanzania. However, they also advocate that taxes must be raised so they can take over from aid as financing.

Allison Dempster on Africa Files reviews the case for this kind of aid to Tanzania.

Donors and sponsors to the School of St Jude can tie their funds to something specific by sponsoring a child or a bus or a classroom, or they can donate to general funds and give the school administrators the flexibility to apply the funds where needed most.

Donor countries like Sweden and Norway are helping Tanzania grow its administrative capacities by donating to general budget support which Allison describes as
To hear its fans describe it, budget support is the Tom Hanks of foreign aid concepts - ordinary looking, but turns in solid performance most of the time. A no-name’brand approach to international aid, if
you will.

Interesting, yes?

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