As Starmer cuts overseas aid, remember countries like the UK already plunder billions more than they pay back

As the Keir Starmer-led government cuts the UK foreign aid budget (by more than the Tories, and to pay for increased defence spending), it’s important to remember that rich nations like the UK already extract much more wealth from countries in Africa than they pay back in aid.

The Labour government is reducing foreign aid to just 0.3% of GDP, it’s lowest level in 25 years. In 2019, it was more than double that (as a proportion of national income) at 0.7%. It will be £9.2 billion in 2027, a huge drop from £15.3bn in 2023. And over 20% of the overseas aid budget is literally spent in the UK (on refugees).

The UK extracts much more than the £1.5 billion (or 10%) of the budget that went to the African continent in 2023.

The UK: plundering the wealth of Africa

A report from campaigners including Global Justice Now shows that rich countries actually extract £92 billion more per year (in today’s prices) out of Africa than they pay back in aid. That’s when you exclude loans from the inflow that the African countries pay back anyway.

• Rich countries extract £26 billion per year from Africa through debt interest.
• Neocolonial powers take £31 billion per year in multinational profits.
• They extract £68 billion in illicit financial outflows.

The report suggests that aid can be a “distraction” when rich countries plunder so much more. It also points out that this is a neocolonial endeavour. Academic Robert Beckford estimated that Britain extracted £7.5 trillion from Africa through the slave trade.

What’s more is Africa is resource rich.

The Congo holds £24 trillion (in today’s prices) in mineral reserves. Countries should coexist and share resources as a reward for those who can work, otherwise war and resource extraction may well continue. At present, multinational corporations own African resources and make billions in profit from them, while African governments only sometimes have a small stake in these private companies.

The report further notes that 101 companies on the London stock exchange control £993 billion in resources from Africa in just five products (oil, coal, platinum, gold, and diamonds).

The aid cuts make things worse. Save the Children has found that 55 million people will be deprived of basic necessities as a result of the government cuts. But there are deep, structural problems already in place.

So, until Global North countries like the UK stop plundering the Global South – while cutting the meagre aid they did give them – then, little will change.

Featured image via the Canary