A social policy analyst, Dr William Ahiadze, has said that aid has become a blunt instrument for economic development and poverty reduction.
This was because of the lapses in disbursement and the utilisation of aid, due to policy failures, weak institutional capacities, the lack of vision and boldness on the part of governments of developing countries.
Speaking to the Daily Graphic, Dr Ahiadze, who is also a lecturer at the Centre for Social Policy Analysis of the University of Ghana, Legon, said the system of aid allocation and utilisation, showed that “old habits die hard.”
He, has therefore asked political leadership of developing countries to soberly reflect on their part of development, develop visionary policies and have the boldness to follow it through.
Dr Ahiadze who has studied the processes and implementation of the Paris Declaration on Aid Effectiveness, said although the declaration was to address some of the challenges in aid, a lot more needed to be done.
The Paris Declaration is a joint effort agreed to by 90 developing and developed countries as well as 27 aid agencies in Paris on March 3, 2005 for the effective use of aid.
For instance, he said the declaration did not clearly link aid to gender, social service provision and agricultural development in developing countries.
These were however important areas and catalysts for development.
On the key principles underlying the declaration, that is, ownership , harmonisation, alignment, results and mutual accountability, Dr Ahiadze pointed out that challenges still persisted in realising these governing principles.
These principles would ensure local ownership and participation in the processes of aid disbursement and utilisation and the fine co-ordination of the efforts of donors and creditors.
While the country-led strategies would be perfectly matched with aid activities for development results and mutual accountability.
Dr Ahiadze said under the framework, Ghana’s Poverty Reduction Strategy, was key in aid utilisation.
Because it was the policy framework that set out the strategic requirements in manpower, economic, and other sectors for poverty reduction and economic growth of the country.
However, most Ministries, Departments and Agencies (MDAs), hardly used it as a policy guide and the government had to work to change that.
Also the GPRS had to be harmonised with the Multi Donor Budget Support (MDBS), that is, the collective channel of contribution by donors in supporting a country’s programmes.
He said since the MDBS was a key trigger for aid disbursement, the GPRS was not and that needed to be corrected.
For donors on the other had, Dr Ahiadze said, they had to let go of some of their conditionalities that made aid ineffective.
For instance, in the area of capacity building, some donors tied the provision of technical assistance to aid and part of the funds was used in paying for that.
That did not build local capacities and it also reduced the amount of aid needed for a particular project, making aid ineffective.
He said the aid release process was also sometimes characterised by delays, or what was termed "disbursement lag."
When that happened, programmes and projects were stalled making recipient nations worse off, he said.
Dr Ahiadze also pointed to a contradiction in the new framework governing aid.
Despite the underlining principle of making aid more effective for development and poverty reduction, certain prescriptions by donors under like the privatisation of social services, meant limiting access to these services by the poor, a target group of aid.
Another contradiction raised by Dr Ahiadze was the fact that the new aid framework was still being governed by people in charge of international financial institutions.
He said that would mean the same old practices governing the disbursement and utilisation of aid.