Donor-driven initiatives in Africa
Table of Contents
Introduction
Donor-driven initiatives play a crucial role in supporting development efforts in Africa. This article will explore the role of France as a donor country and its initiatives in Africa. We will discuss France’s ranking as a donor country, its commitment to ODA/GNI ratio targets, and its innovative financing mechanisms. Additionally, we will examine France’s allocation of bilateral ODA and its focus on income levels and recipient countries in Africa.
France as a Donor Country
France has emerged as a significant donor country, with a commitment to supporting development efforts in Africa. In 2022, France was the fourth largest donor country within the DAC, contributing a total of US$15.9 billion in Official Development Assistance (ODA). This marked a 3% increase from the previous year, overtaking the UK as the fourth largest donor.
Ranking by Prioritization of Development
When ranked by prioritization of development, France stood as the tenth largest donor in 2022. The country allocated 0.56% of its Gross National Income (GNI) towards ODA, reflecting a 12.5% increase from 2021. In 2021, France was the seventh largest donor, spending 0.51% of its GNI on ODA. France’s steady increase in ODA aligns with its goal of reaching an ODA/GNI ratio of 0.7% by 2025.
Commitment to ODA/GNI Ratio Targets
France’s commitment to increasing its ODA/GNI ratio is outlined in the Programming Law for Solidarity-based Development and the Fight Against Global Inequalities. This law, adopted in 2021, sets milestone ODA/GNI ratios to track progress. In 2022, France aimed to achieve a ratio of 0.55%, which it successfully surpassed with a ratio of 0.56%. To reach the target of 0.7% by 2025, France has prescribed a trajectory of 0.61% in 2023 and 0.66% in 2024.
However, projections for the 2023 budget development suggest a potential shortfall in meeting the targets set by the law. While an official estimate of France’s total ODA for 2023 is yet to be published, current estimations indicate it will amount to EUR16.1 billion (US$19 billion). This shortfall is attributed to a reduction in in-donor refugee costs, which counterbalances the expected increase in the ODA mission and contributions to the EU budget.
Innovative Financing Mechanisms
France has been at the forefront of implementing innovative financing mechanisms to mobilize funds for multilateral development priorities, particularly in the areas of health and climate. Two notable mechanisms are the Financial Transaction Tax (FTT) and an airline tax.
Financial Transaction Tax (FTT)
The FTT is a mechanism that levies a small tax on financial transactions. France has successfully implemented this tax and directs the revenues raised towards multilateral assistance. Each year, the FTT and the airline tax mobilize EUR738 million (US$872 million), which is disbursed through the Solidarity Fund.
Airline Tax
France has also introduced an airline tax, which contributes to the funding of multilateral organizations. The revenues generated from this tax are pooled and channeled towards health and climate organizations, furthering France’s commitment to supporting development priorities.
Use of SDRs to Increase ODA
France has taken a leading role in advocating for the use of Special Drawing Rights (SDRs) to increase overall ODA. SDRs are international reserve assets created by the International Monetary Fund (IMF). France has committed to redirecting 30% of its SDR allocation to the African continent, further demonstrating its dedication to supporting development initiatives in Africa.
Bilateral ODA Allocation
France allocates a significant portion of its ODA bilaterally, surpassing the DAC average. In 2021, 66% of France’s ODA was channeled bilaterally, compared to the DAC average of 43%. This allocation highlights France’s commitment to direct engagement with recipient countries.
Cap on Multilateral Spending
Despite France’s emphasis on bilateral ODA, it remains a strong supporter of multilateral organizations. However, the 2021 Development Law introduced a cap on multilateral spending, mandating that bilateral ODA should represent 65% of France’s total ODA between 2022 and 2025. This cap may result in larger budgets for France’s implementing agencies, particularly the Agence Française de Développement (AFD).
Bilateral ODA Categories
France’s bilateral ODA encompasses various categories, including education, financial services and business support, health and populations, and environmental protection. However, it is important to note that the reported figures include items categorized as ODA that may not represent actual transfers from France to recipient countries. For example, hosting students from partner countries is included in the reported figures.
Loans vs. Grants
France provides more than half of its bilateral ODA as loans, aiming to minimize the impact on actual budget transfers while increasing overall ODA. This approach differs significantly from the DAC average, which allocates only 9% of bilateral ODA as loans. However, the French government has committed to increasing the share of grants within its ODA. The 2021 Development Law stipulates that grants should make up 70% of France’s bilateral ODA over the period of 2022-2025.
Focus on Recipient Countries in Africa
France strategically focuses on recipient countries in Africa, particularly those in the Sahel region. In 2021, France allocated 26% of its bilateral ODA to Sub-Saharan Africa, slightly above the DAC average of 24%. This emphasis on Africa aligns with France’s commitment to supporting development efforts on the African continent.
Income Level Differentiation
France’s approach to bilateral ODA takes into account the income level of recipient countries. The country primarily extends loans to emerging economies, while grants are allocated to Low-Income Countries (LICs). This differentiation ensures that France’s support is tailored to the specific needs and capacities of each country.
Priority Countries and Grants
France focuses its grant funding on 19 Lower Middle-Income Countries (LMICs) designated as ‘Pays Pauvres Prioritaires’ or ‘PPPs.’ These countries are mostly located in Sub-Saharan Africa and include Benin, Burkina Faso, Burundi, the Central African Republic, Chad, Comoros, the Democratic Republic of the Congo, Djibouti, the Gambia, Guinea, Madagascar, Mali, Mauritania, Niger, Senegal, and Togo. The 2021 Development Law mandates that by 2025, priority countries should receive 25% of France’s bilateral ODA and at least half of all grants.
Top Recipient Countries
Despite the emphasis on grants for priority countries, France’s top recipient countries in 2021 were primarily Middle-Income Countries (MICs) due to the country’s continued focus on loans. The top recipients of grant funding were Morocco, Côte d’Ivoire, and Senegal, while the top recipients of loans were Brazil, Colombia, and Morocco.
Conclusion
France’s donor-driven initiatives in Africa play a significant role in supporting development efforts. The country’s commitment to increasing its ODA/GNI ratio and its innovative financing mechanisms demonstrate its dedication to achieving development goals. Through its bilateral ODA allocation, France focuses on recipient countries in Africa, emphasizing income level differentiation and prioritizing specific countries. As France continues to evolve its development strategies, its contributions to Africa’s development are poised to make a meaningful impact.
