On Tuesday 16 September, the European Court of Auditors published a report questioning the effectiveness of the EU’s Aid for Trade programme. This initiative aims to help developing countries, particularly the Least Developed Countries (LDCs), to export. In 2017, the strategy underpinning this initiative was revised and a target was set to devote 25% of the EU and its Member States’ ‘Aid for Trade’ to LDCs by 2030.
However, according to the European Court of Auditors, this target is difficult to achieve. In 2022, the share of ‘Aid for Trade’ going to LDCs was only 12% (€17.2 billion out of a total of €105.8 billion). This percentage has even fallen compared with previous years, when LDCs accounted for around 18% of funding over the period 2010-2015.
Another problem identified by the auditors is that the European Commission has not analysed the reasons for this fall in the case of LDCs. The 2017 revised strategy did provide for enhanced surveillance, which the Commission has put in place, but not in a way that allows the impact to be measured.
On a more positive note, the Court of Auditors points out that the projects examined – in Rwanda, Malawi, Angola and Cambodia – are being properly implemented and are bearing fruit. However, doubts have been cast on the ability of beneficiary countries to capitalise on this initiative and make trade projects sustainable.
In conclusion, the auditors responsible for the report recommend that the Commission: - develops an Aid for Trade Action Plan; - strengthens dedicated resources; - ensures better coordination of projects with the EU delegations on site.
On a more structural level, they also suggest integrating the objectives of the ‘Aid for Trade’ strategy into the Global Gateway funding tool. This would enable the projects financed by Global Gateway to be better adapted to the reality of LDCs, which currently rely heavily on loans or guarantees, which are not very accessible to LDCs.
To see the report: https://aeur.eu/f/IGR (Original version in French by Léa Marchal)