South Africa slams UK decision to phase out aid

JOHANNESBURG Tue Apr 30, 2013 4:03pm BST

International Development Secretary Justine Greening leaves Downing Street in London, September 4, 2012. REUTERS/Neil Hall

International Development Secretary Justine Greening leaves Downing Street in London, September 4, 2012.

Credit: Reuters/Neil Hall

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JOHANNESBURG (Reuters) - South Africa criticised Britain on Tuesday for a decision to phase out aid worth 19 million pounds ($29.5 million) a year, saying it was "tantamount to redefining" the relationship between Africa's biggest economy and its top investor.

British International Development Secretary Justine Greening told an African business conference this week that UK aid would end by 2015 in favour of a "new relationship based on sharing skills and knowledge, not development funding".

However, the announcement triggered a heated reaction from Pretoria, which said it was kept in the dark about the decision.

"This unilateral announcement no doubt will affect how our bilateral relations going forward will be conducted," foreign ministry spokesman Clayson Monyela said in a statement.

Greening was quoted on the UK government website as saying she had agreed with her South African counterparts on the need for a shift in development policy.

Despite pressure on public finances, Britain's Conservative government has pledged to increase aid spending to 0.7 percent of GDP, although it has made clear it will cut assistance to wealthier emerging states to boost it for poorer ones.

Last year, it said it would stop financial aid to India by 2015 amid domestic anger at annual handouts of 280 million pounds to Asia's third-largest economy while UK citizens were facing aggressive budget cuts.

Britain, South Africa's former colonial master, remains far and away its biggest investor, accounting for half of the country's 1 trillion rand ($110 billion) of foreign direct investment stock, according to central bank figures.

However, London's annual aid package, which focuses on public health and improving regional customs systems, is a drop in the ocean for Pretoria, whose budget forecasts spending of nearly $120 billion this year.

(Reporting by Ed Cropley; Editing by Jon Herskovitz)

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