Select Committee on European Union Fortieth Report


Letter from the Chairman to Rt Hon Hilary Benn MP, Secretary of State for International Development, Department for International Development

  Thank you for coming to give evidence to Sub-Committee C on the EU's Strategy for Africa on Tuesday, 29 November 2005.

  Following agreement of the Financial Perspective 2007-2013 at the European Council in December 2005 we have a number of specific questions which we wish to raise concerning the financing of the Strategy, which were not capable of being answered during the evidence session. We would be grateful for your detailed answers to these questions which will assist in our current inquiry into the implementation of the Strategy.

  The Strategy reflects the commitment given by the EU and its Member States in May 2005 to give as official development assistance 0.56% of EU GNI by 2010, with half of the additional €20 billion going to Africa, and 0.7% of GNI by 2015 in the case of 15 Member States, whilst other Member States will strive to increase their ODA to 0.33% by 2015. We understand that these increases will be provided through both bilateral and multilateral resources. However, it remains unclear what proportion will be provided by Member States directly and what through other international organisations and institutions, including the EU.

  Could you therefore provide a table setting out the proportion of Member States' ODA which will be provided through (a) bilateral assistance; (b) the EU (including the EDF); and (c) other multilateral organisations (such as the World Bank). We appreciate that no precise figures will be available and ask only for broad estimates based on previous spending and agreed future commitments such as the Financial Perspective.

  For clarification, could you also provide a full list of the distinct funds upon which the EU is expected to draw in its implementation of the Strategy for Africa, along with (a) the overall amount available in each of those funds for the last year for which figures are available; and (b) the projected amounts available under the next Financial Perspective.

  Aside from this statistical information, we ask the following questions arising from the agreement of the Financial Perspective.

  The agreed budget envisages an increase in the CFSP budget from 2007, and that over the period 2007-2013 that at least 90% of its overall external assistance should be counted as official development assistance. What impact will this have on implementation of the Strategy for Africa?

  Cooperation with the ACP countries is to be allocated €22,682 million in current prices for the period 2008-13 under the existing inter-governmental European Development Fund framework. Is there any commitment to use this increase on the funds available in the 9th EDF to specifically support African countries and projects devised under the Strategy for Africa?

  The Strategy seeks to "strengthen the Africa Peace Facility with substantial, long-term, flexible, sustainable funding". What progress has been made on agreeing a source for this funding bearing in mind the serious implications of this for what the Facility money can ultimately be used to fund?

  Finally, how will the various funding strands of the EU architecture be better coordinated so that they are both more streamlined for recipients, and so that all essential initiatives are covered?

12 January 2006

Letter from Rt Hon Hilary Benn MP to the Chairman

  Thank you for your letter of 12 January seeking further clarification on the financing of the EU-Africa Strategy.

  On your first question, as you suspected, no precise figures are available at this stage for the breakdown between bilateral official development assistance (ODA) and contributions to the various multilateral organisations, where future commitments have yet to be agreed eg the size and shares of the next replenishment of IDA. But I can provide your Committee with a table showing OECD/DAC forecasts of ODA to 2010 and a breakdown of outturn EU ODA for 2004. Based on current spending patterns and the commitments which have been made, such as the replenishment of the EDF, the multilateral share of EU ODA is likely to decline in the future.

  In terms of Community funding for Africa, the main source is the European Development Fund (EDF). In 2004, €2,464 million was spent under the EDF, of which €1,912 million in sub-Saharan Africa. Sub-Saharan Africa also receives funds from the EC external actions budget, as does north Africa. In 2004, sub-Saharan Africa received €447 million from the budget and North Africa €558 million.[62] The precise allocations to sub-Saharan Africa and North Africa within the 10th EDF and new Financial Perspective will depend on the outcome of resource allocation decisions to be agreed over the coming months, but I would expect both to increase significantly over the level of funding available under the 9th EDF and current Financial Perspective.

  An increase in spending on CFSP will have little if any impact on spending in Africa. The 90% ODA target will not necessarily have much impact on the level of assistance going to Africa specifically, but will mean that expenditure will focus on development assistance and should be subject to the new European Consensus on Development, which I think is very positive.

  The increase in the size of the 10th EDF over its predecessor will be reflected in an increase in resources available to African countries.

  Work will soon begin on EDF resource allocation criteria. I expect this work to maintain the high proportion going to the poorest countries. Especially in sub-Saharan Africa. The EDF will be used to support some of the activities identified in the EU-Africa Strategy; indeed the Austrian Presidency intends to put forward a draft roadmap to implement the Strategy, which will set out areas where the EDF will play a major role.

  To date, there has not been further progress on future funding of the Africa Peace Facility. The Austrian presidency has agreed however to try to bring discussions to a conclusion now that the Financial Perspectives have been agreed. I will keep you advised of progress.

  On your final point, I agreed that is essential that the EU improves its coordination and access to assistance for developing countries. Work is being carried out on harmonisation and coordination in which the European Commission is playing a leading role.

11 February 2006

62   Source European Commission Annual Report 2004. Back

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