Foreign Aid Effectiveness and Development Strategies in Eritrea: A lesson for Sub-Saharan African countries

Abstract

This study analyses foreign aid effectiveness and development strategies in Eritrea. It attempts to draw a lesson for Sub-Saharan African (SSA) countries. The study seeks to answer the following question: "what are the conditions for foreign aid effectiveness in SSA countries"? The data for this study was collected in 2015 in six months period from February to August. In this study, both primary and secondary data sources were used. Interviews were conducted with 45 key government officials and development partners. The study adopts a deductive approach to explaining aid and development in Africa. In this study, it is found that ownership, alignment, harmonization, result orientation, strong institutions and policies, accountability, and coordination and monitoring among aid agencies and partner institutions were the main conditions for aid effectiveness. The study further reveals that, in most SSA countries, absence of good governance was the main challenge for aid effectiveness. Aid is not effective when recipient countries do not have enough "absorptive capacity" as a result of their poor policies and/or weak institutions. Eritrea"s emphasis on self-reliance and national "ownership" of development projects is of considerable interest given the aid dependence of much of SSA countries. Aid should be used to deepen country ownership of development policies; support and strengthen institutions; align more closely to national priorities; and strengthen the country"s ability to oversee, manage and coordinate incoming aid and donor activities. To this end, drastic and concrete changes should be made at national, sub-regional, regional, and international levels to pave the way towards sustainable development and economic growth.