Mandela Told the UK That People Could Eradicate Poverty—but Only if They Target It.

“Like slavery and apartheid, poverty is not natural. It is man-made and it can be overcome and eradicated by the actions of human beings.

And overcoming poverty is not a gesture of charity. It is an act of justice. It is the protection of a fundamental human right, the right to dignity and a decent life.

While poverty persists, there is no true freedom.”

Nelson Mandela, Trafalgar Square, February 2005
 

Twenty years ago, Nelson Mandela argued that poverty was man-made; and that it could be eradicated by the actions of human beings. He emphasized the role of trade and debt as well as aid quantity and quality in ending extreme poverty. Halving extreme poverty was the first Millennium Development Goal, ending it is the first Sustainable Development Goal and the UK government’s mission is “to create a world free from poverty on a liveable planet”.

But for aid to make a difference to poverty; it must focus on it; particularly now the US – the largest provider of aid to Africa - has frozen much of its support (USAID allocated almost $12 billion to Africa in 2023, more than any other country). 

In this blog, we look at the UK’s recent patterns in aid allocation. We find that UK aid has drifted away from those countries where extreme poverty is concentrated. The UK’s bilateral aid to Africa has been cut by two-thirds in real terms since 2019; and the prior UK government failed to meet its (unambitious) target to allocate half its bilateral aid to the 44 least developed countries (LDCs). In addition, the UK’s bilateral programmes are now smaller than those of similar donors, making it harder to create real change in the countries they support. 

The UK’s bilateral aid has become ill-targeted, and fragmented. There may be little direct benefit to supporting small, poor countries, but the UK’s allies and those in the Global South do recognize the UK’s past leadership on this agenda giving a geopolitical pay-off. We urge Ministers to re-focus aid where it makes the most difference; and to substantially increase the size of programmes in those countries. 

Extreme poverty concentrated in Africa

Two-thirds (67 percent) of people living in extreme poverty reside in Sub-Saharan Africa; and over a third (36 percent) of Sub-Saharan Africans live in extreme poverty. Yet UK bilateral aid to Africa has been cut by almost two-thirds (65 percent) in real terms since 2019: down from £3.6 billion to just £1.3 billion in 2023. This far outstrips overall cuts to the aid budget, at 14 percent in real terms over the same period. 

Figure 1: UK bilateral ODA to Africa (£ billions, constant 2024 prices)

Since January, the United States has frozen much of its aid spending and reviewing to ensure it puts ‘America first’. The US is the largest provider of bilateral aid to African countries, providing over $9 billion every year since 2011, and $15.7 billion in 2023 (over a third of total bilateral support). Three quarters of US support ($11.8 billion) is provided by USAID, an agency which is being dismantled by the second Trump administration. 

What about all least developed countries?

The wider international community sees supporting LDCs as important; and providing assistance to this group was at the heart of the UK’s reputation on international development. Throughout the 2010s, the UK was the only G7 country to meet the UN’s goal to spend 0.2 percent of Gross National Income (GNI) in LDCs. But since 2020, it has stopped doing so, spending less than 0.15 percent of GNI in these countries; and Germany is now the only G7 member to meet the goal. In fact, Andrew Mitchell’s 2023 White Paper committed to spend a historically modest 50 percent of the UK’s country allocable aid to LDCs (as well as the UN 0.2 percent goal); but it failed to do so in 2023, falling to 47 percent its lowest level in 15 years. Although the United States’ low aid to GNI ratio meant it did not meet the UN target; LDCs were over half its budget in most of the decade to 2021 (after which the share fell due to new aid to Ukraine; but US LDC aid reached an all-time high of $13.7 billion in 2023).

Looking at a broader group of poorer countries—the 77 countries that are categorised as low- or lower-middle income (LICs & LMICs)—the same trend is apparent. The UK is spending a smaller share of the aid it allocates in the poorest places.  

Figure 2: LIC & LMIC share of UK country-allocable bilateral ODA

In 2005, 97 percent of the UK’s country-allocable bilateral Official Development Assistance (ODA) went to LICs and LMICs; by 2023 this had fallen to 75 percent. Yet over the same period, the share of global poor living in LICs and LMICs only fell from 97 to 94 percent. 

Extreme poverty is becoming more concentrated in the poorest countries. World Bank researchers forecast that in the coming years, the share of the global poor living in LICs will exceed 50 percent (from under 30 percent in 2010). Whilst there are still many people living in extreme poverty in middle-income countries (MICs), if these countries maintain their pre-pandemic rates of economic growth, the share of the global poor living in the current group of MICs will fall 11 percentage points to 38 percent by 2030 (this excludes some LICs that are expected to become MICs). 

Achieving real change

Another important characteristic of UK aid is the small country programme size of bilateral aid relationships. As our colleague Charles Kenny has highlighted, the UK’s largest country aid programme in 2023, was less than a tenth the size of the US’s; and around a fifth of Germany’s. The ratio is similar for the 10^th largest aid program. One of the major features of aid in the poorest places is that it can be large relative to an economy: $100 million to Burundi is equivalent to 0.79 percent of its GNI, whereas $100 million to Turkey is less than 0.01 percent of its GNI. In poorer countries, aid can achieve real economic change, and potential positive influence on recipients’ development and values, but small programmes, like those under $100 million (£80 million), seem much less likely to achieve that change.

In 2023, just seven of the UK’s bilateral aid relationships exceeded $100 million (5 LICs, 1 LMIC and 1 UMIC), under half the figure throughout the 2010s (see Figure 3 below). The UK’s tenth largest recipient, Bangladesh, received just $73 million bilaterally from the UK.

Figure 3: Number of UK country partnerships over £80m ($100m), nominal terms

The scale of UK aid remains modest relative to even priority partners’ economies or populations. The UK has development partnerships with 45 countries and, expressed relative to recipient economy size, its tenth largest recipient receives just 0.06 percent of its GNI (Zimbabwe, see figure 4), and under $5 per person (Sierra Leone). Only Somalia receives over 0.2 percent of its GNI, and only the West Bank and Gaza Strip receives more than $10 per person. 

Figure 4: Top ten recipient countries of UK bilateral ODA by share of recipient GNI, 2023

Conclusions

The Foreign Secretary has rightly emphasized the importance of building relationships across the world. In high- and upper middle-income partners UK aid does not go far—and the UK is playing a major part in reforming the global financial system to ensure countries can borrow to invest in climate and other goals. But in the poorest countries, bilateral grant aid focused on alleviating extreme poverty still matters. Historically, the UK and the US have focused their resources on the poorest countries (the US allocated around half of its aid to Africa and LDCs through most of the 2010s). As the Trump Administration’s “America First” foreign policy takes effect, what the UK does now is even more important.  

We’d suggest that, as the UK reallocates aid from reducing refugee costs, it should target extreme poverty, with at least half of the bilateral budget going to each of Africa and to LDCs in 2025. Newly released budget allocations for 2024-25 suggest some progress, with FCDO’s allocations to Africa nearly doubling from its 15-year low. The Government’s forthcoming African approach is a chance to set a target more in line with the nearly 70 percent of those in extreme poverty that live in Africa. More practically, the UK can focus its development offer away from ODA in middle income countries and towards investment, scientific collaboration and trade (notwithstanding exceptions like Ukraine, refugee hosting or other crisis response). We have argued the UK can and should prioritize and achieve major change multilaterally—but even in a smaller bilateral programme it should be , evidence based, and focused on large projects in the poorest places.