Malawi and Kenya: Aid (Hansard, 24 February 2003)

§ Lord Steel of Aikwood
asked Her Majesty's Government:
Whether they will resume their budgetary aid programmes to Malawi and Kenya in light of political developments in both countries.

§ The Parliamentary Under-Secretary of State, Foreign and Commonwealth Office (Baroness Amos)
My Lords, budget support remains an important part of our assistance to Malawi. In 2003–04, our programme totals £47 million, of which £15 million is earmarked for budget support. Should the Government of Malawi take steps for sustainable poverty reduction, additional assistance may be available from DfID's performance fund.
The United Kingdom is working closely with the new Government of Kenya to develop the policies and systems that could pave the way for a resumption of bilateral budget support.

§ Lord Steel of Aikwood
My Lords, I am grateful to the Minister for that Answer. Has she noted that in Malawi, thanks partly to the emergency food aid given by Her Majesty's Government, the good rains and the good crops, they are well on their way to overcoming the hunger problem and, in fact, expect a food surplus this year? But will she recognise that, in the mean time, social programmes such as those for education and health have been cut back pending the resumption of full budgetary aid?
2 I join the Minister in welcoming the peaceful and democratic transition to a new government in Kenya. Does she agree that they have got off to a good start, with emphasis on good governance, respect for human rights and the attack on corruption? Will Her Majesty's Government continue to press them to move in the direction of the constitutional reforms that we expect?

§ Baroness Amos
My Lords, I agree with the noble Lord, Lord Steel, that the work that we and other donors have done and the good rains have enabled Malawi to overcome the problem of hunger. Suspension of donor budget support in late 2001 resulted from the consistent failure by the Government of Malawi to implement agreed macro-economic reforms and to pursue the right macro-economic policies. We have been working with them on that. That is why we have said that, if they pursue the right policies, we will return to giving a limited amount of budget support. I agree with the noble Lord about the impact that that is having on social sectors.
The new Government of Kenya have got off to a good start. My right honourable friend Clare Short was there, and I visited recently. They are doing a considerable amount of work to tackle corruption. We are working closely with them. They intend that the constitutional reforms will be put in place by the middle of the year. We will continue to encourage that process.

§ Baroness Rawlings
My Lords, we welcome the election results in Kenya and congratulate President Kibaki. I hope that it heralds a brighter future for the people of Kenya. Can the noble Baroness confirm that aid to Kenya will be securely linked to political and economic reform and to ending corruption? Does she accept that, if more and more aid bypasses charities and local civic society and goes straight into central government pots, it is more difficult to ensure that money is accountable? Does she further agree that more money should be spent by local organisations, 3 which are less corrupt, more effective in fighting poverty and will help to build a more vibrant civic society?

§ Baroness Amos
My Lords, the noble Baroness and I have discussed the issue in the past—not in relation to Kenya, but more generally in terms of our development resources. She will be aware that a key part of our strategy is to move to longer-term understandings with governments that are pursuing the right policies and are on track with the IMF. That will enable us to move to a 10-year programme, as we have done in Ethiopia and Rwanda, whose governments know the amount of resources that they will get year on year. I can assure the noble Baroness that we do not move to that form of support unless we are sure that the right kind of financial systems are in place. At the same time, we continue with wider programme funding, some of it through NGOs, which is important, as the noble Baroness said, to build local capacity and, in particular, local civic society.

§ Lord Alton of Liverpool
My Lords, I welcome what the Minister has said to the noble Lord, Lord Steel of Aikwood. Does she agree that during the final months of the rule of Daniel arap Moi in Kenya corruption had become endemic and had led to the closure of a number of United Nations schemes, particularly the building of water catchment dams in remote areas of Kenya such as Turkana, which I visited a few months ago? Will the Minister look at that particular set of projects, as irrigation and clean water constitute one of the most fundamental bases for development? If such programmes are to be suspended because of previous corruption, it will have a disastrous effect on the people of those areas.

§ Baroness Amos
My Lords, the noble Lord is right that donors were very concerned about corruption in Kenya. We are pleased that the proposal for the new anti-corruption authority will give them the power to prosecute independently, which the previous Kenyan government's proposals lacked.
The noble Lord asked about irrigation and clean water. He will be aware that our focus is on education, in particular working with the Kenyan Government to provide schoolbooks, especially for primary education. I have seen the impact of that in the schools that I visited when I was in Kenya earlier this year. The European Union focuses on irrigation and water projects. I will certainly take the noble Lord's comments back to the EU.

§ Lord Rea
My Lords, I was also there during the elections. There is an enormous amount of good will towards the new Kenyan Government. One of the first decrees was that all primary schooling should be free. That resulted in an enormous increase in the number of children who turned up at school. Do the 4 Government have any plans to help the Kenyan Government with this new influx of primary schoolchildren?

§ Baroness Amos
My Lords, that was one of the first announcements to be made by the new Kenyan Government. Noble Lords may know that not only did primary schoolchildren turn up once free education was announced, but also a number of adults who had not had the opportunity to receive schooling. We immediately reported that an additional amount would be made available for our education programme in Kenya, and we shall watch the results very closely. Once Kenya is on track with the IMF, we shall look again at our funding mechanisms.

§ Baroness Northover
My Lords, does the Minister agree that the new Kenyan Government should receive our full support if we are to help to ensure that the Kenyan people retain their faith in the democratic process? What is the timetable for restoring UK and EU aid? Following the question of the noble Lord, Lord Rea, will the provision of primary education for all children be adequately funded, especially as adults are also now trying to take part in that education? In addition, will the constitution change be the cornerstone of that support so that the progress made thus far will be secured into the future?

§ Baroness Amos
My Lords, we are working closely with the Kenyan Government to support the development of a credible poverty reduction strategy and to help them to strengthen their financial and management systems. We shall need to see considerable progress in those areas before resuming budgetary support, although, as I said in my previous answer, we are giving a substantial amount in support of education.
The resumption of bilateral budget support will depend on the speed with which the Kenyan Government make progress in developing their poverty reduction strategy. The noble Baroness may wish to know that the World Bank intends to provide some 50 million dollars for primary education. It also intends to release the second 50 million dollar tranche of the public service reform programme loan, which was held back two years ago. Therefore, there is already some movement. The European Commission will soon release some 40 million euros in budget support to meet earlier retrenchment costs.

§ Lord Taylor of Blackburn
My Lords, is my noble friend aware of the amount of work being done by the British Council in Kenya? What additional moneys are the Government giving to the British Council to extend that work?

§ Baroness Amos
My Lords, I am aware of the work being done by the British Council in Kenya and in other parts of Africa. The British Council's overall budget is agreed by the Foreign and Commonwealth Office as part of a three-year cycle. The council received an increase in that grant earlier last year.