To accelerate income growth towards seven per cent, and to spur strong progress towards the Millennium Development Goals, the volume and quality of external aid to sub-Saharan Africa must change radically. To ensure effective absorption, increases in aid over the next three to five years should be strong and measured. They must also be accompanied by continued improvements in governance in aid-recipient countries, by substantial changes in donor behaviour, and by learning and evaluation. Past experience shows aid can be provided and used badly. But more and better aid can support positive changes, as demonstrated by recent advances in many African countries, including Senegal, Mali, Burkina Faso, Ghana, Benin, Ethiopia, Uganda, Tanzania, and Mozambique.

This chapter proposes:

• Doubling aid levels over the next three to five years, to complement rising levels of domestic revenue from growth and from better governance;
• Financing increases in aid by meeting existing commitments to move toward the 0.7 per cent ODA/GNI target, by raising additional finance from an International Finance Facility (IFF), and by developing international levies (for example, a tax on airline tickets) with revenues dedicated to development;
• For poor countries in sub-Saharan Africa which need it, the objective must be 100 per cent debt cancellation as soon as possible. This must be part of a financing package for these countries – including those excluded from current debt schemes – to achieve the MDGs, as promised in Monterrey and Kananaskis. The key criterion should be that the money be used to deliver development, economic growth and the reduction of poverty for countries actively promoting good governance;
• Improving radically the quality of aid, by:
  • Strengthening the processes of accountability to citizens in aid-recipient countries;
  • Allocating aid to countries where poverty is deepest and where aid can be best used;
  • Providing much stronger support to advancing governance where conditions for effective use of aid are currently weak;
  • Channelling more aid through grants, to avoid the build-up of debt;
  • Aligning more closely with country priorities, procedures, systems, and practices;
  • Providing aid more predictably and flexibly over the longer term;
  • Protecting countries better against unanticipated shocks.