In 2021 this trend will reverse. Rich countries are cutting direct aid by about a third as a
result of their own problems. The immediate impacts will be bad. Bill Gates, a
philanthropist, says covid-19 and cuts in aid are undermining 25 years of progress in
improving health. The World Bank thinks the number of very poor people globally could
jump by up to 100m.
Yet over the longer run there will be positive changes. Remittances will become even
more important than aid. Having fallen by 23% to $37bn in 2020, they are expected to
improve slightly in 2021. Much of the money sent home by migrants goes into education
and housing. Little is stolen by corrupt officials. Many African countries are putting
scarce aid money into social safety-nets rather than wasteful grandiose projects. And
less aid means many countries will have to raise more in taxes. To do so they will have
to promise better governance, more accountability and more democracy—and perhaps
fewer petit fours at AU shindigs.
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