Debate Splits Aid Sector

Annual deficit stands at more than R70 trillion – UN.

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Cuts by rich donors decimate aid budgets for the world's most vulnerable; private financing has been touted as the sector's savior, but not everyone is convinced.

The United Nations (UN) puts the annual funding deficit for aid at more than $4 trillion (about R70 trillion), with chilling consequences for health, education, and humanitarian programmes in the poorest countries.

The yawning gap left by traditional aid sources such as governments, development banks, and philanthropy thrusts private investment into the spotlight at a UN aid conference in Spain this week.

"We need the private sector and the jobs it creates because jobs are the surest way to put a nail in the coffin of poverty," World Bank chief Ajay Banga told attendees at the event in Seville.

Banga said the private sector could succeed with the "right conditions", including infrastructure, transparent laws and institutions and an environment favorable for business.

The document adopted in Seville, which will frame future development cooperation, pledges to generate funds "from all sources, recognizing the comparative advantages of public and private finance".