Budget support and Africa–European Union relations : Free market reform and neo-colonialism?

The European Commission has promised to provide African countries with budget support to facilitate poverty eradication and the broader achievement of the United Nations Millennium Development Goals. Moreover, European Union officials state that modern ‘poverty reduction’ budget support aligns with Organisation for Economic Co-operation and Development norms of country-ownership. In particular, they assure recipients that this aid modality will not be used to coerce African states to pursue second-generation liberalisation measures. Accordingly, European Union actors in the Post-Washington Consensus appear to have learned the lessons of structural adjustment reforms undertaken in the 1980s and 1990s, opting now to promote untied aid mechanisms. This article argues, however, that European Union budget support is still very much tied to premature trade opening and economic liberalisation in Africa. Examining the cases of Tunisia, Ghana and Uganda, it points to the strategic utilisation of budget aid as a means of donor leverage for free market reform detrimental to the needs of poorer citizens. In this context, the article argues that Nkrumah’s concept of ‘neo-colonial’ states bears much significance for a contemporary evaluation of European Union budget support to Africa.