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Foreign aid is a shocking waste of money – and I should know

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IS THE UK foreign aid budget a colossal waste of money? From my long experience of working to implement assistance projects (1993-2016) on behalf of the Department for International Development (DfID) and other aid agencies spending UK money, I can say with great confidence that the answer is a resounding YES. 

To illustrate how money is wasted from the development budget I tell the story of two multi-faceted projects I was involved in between 1993 and 2009: assistance to the Uganda Revenue Authority, and assistance to the Albania Revenue Authority.

Uganda

As an accountant, I was asked in 1993 to go to Uganda to restructure its tax system by working in management as one of the Deputy Commissioners – I was the Chief Investigation Officer. I thought this was a good idea: it would let the country raise its own money and stop aid in the medium term. At the end of the three-year project the expatriate team had the tax department running well, and as a bonus I had survived the death threats. However the person designated to continue my work, a Ugandan national, had no experience, was I understand previously a coffee salesman in the USA, but had the all-important qualification of being a family acquaintance of the President. This did not bode well.

Ten years later I was asked to go and assist the Uganda Revenue Authority to get back on track. The organisation was struggling to control rampant corruption and restructuring was difficult, as great resistance was met from within the organisation. Indeed at one point the Dutch project manager overseeing the Netherlands part of the basket development fund (UK, Netherlands, Belgium) called a management meeting to threaten to withdraw his support for the project. Despite this strong and unusual backing from a development partner, the project had only limited success.

Five years later I was asked by the Uganda Revenue Authority to write a report on why the tax authority was not still performing well. Telling the truth (corruption and incompetence) was not welcomed. Surprise, surprise, this was my last assignment there.

Albania 

I spent six years in Albania, once again restructuring their tax system. After four years my team had achieved a semi-accountable tax department, with all personnel fully trained and capable of doing the job properly, although the rampant corruption was, let’s say, a bit of a problem. Then a new government was elected, and every single person in the tax department was dismissed, from Director General to the cleaners, as they were placements by the outgoing government. Four years of work was wasted. Although DfID decided to carry on with the project, another two years was spent to achieve very little as the new government has no interest in it. 

I could give more details of problems, generally corruption, with other projects but the list is too long. Examples include:

·       Being pushed out of the DfID-funded Uganda National Roads Authority by the local management when I reported that the World Bank-funded computer implementation was going to fail. My report to the World Bank representative was very unwelcome, and instead of acting on the report he passed my complaint to the local management responsible for the imminent failure!

·       Being asked to leave the DfID-funded Rwanda Revenue Authority project. This was a puzzle until I was contacted by another consultant and informed that my training course for the Investigation Section, using investigation into petroleum smuggling as an exercise, had uncovered that the ‘smuggling’ appeared to be the Rwandan authorities shipping the petrol into the Democratic Republic of Congo in contravention of UN sanctions. Oops.

You might ask, why don’t the aid agencies evaluate the design, implementation and outcomes of these multi-million-pound projects to ensure value for money? Well, they do – an independent consultant is engaged to evaluate the project. However, ‘independent consultants’ do not in any circumstance say the project failed, as they are contracted by DfID, and DfID do not want to hear the truth. My only personal experience of evaluating a DfID project on behalf of DfID (assistance to the Sierra Leone tax authority) was that the honest evaluation of failure was not appreciated by DfID, and was never to be repeated. 

I do believe aid and assistance is a laudable endeavour if provided in circumstance where a country is in dire straits through no fault of its own. Famine, flood, pestilence, conflict – yes, let’s help. But pouring money into bottomless corrupt cesspits because, let’s face it, there is too much money sloshing around, and the target is to spend the money, not get results – that is an unsupportable position.

This article is an abridged, edited version of a report made to Lord Lipsey in support of his Bill to make the expenditure target one that applies over a five-year period, rather than annually, to avoid the risk of having to rush through expenditure at the end of each financial year to meet the spending target, and thus allow much greater flexibility.

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Stephen Tye
Stephen Tye is a retired accountant who spent the last 22 years of his career working on projects funded by international aid donors in Africa, Europe, Middle East and Asia.

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