Wednesday, 10 August 2016

Africa: Brexit - What Does It Mean for Development Aid and the Global Fund?

Britain's vote to leave the European Union has left much of the global development community wondering what this will mean for the U.K.'s role as a global leader in international aid and development. It also raises issues about the implications for the Global Fund's Fifth Replenishment. As soon as the results of the vote were known, the pound sterling plummeted, dropping almost 10% against the US dollar, its lowest level since 1985 (see figure). As well, $2 trillion was wiped off world markets in a flurry of panic. This overnight devaluation of the pound saw the value of British foreign aid drop by $1.4 billion. Laurie Garrett, from the Council on Foreign Relations, explained the impact of the devaluation more bluntly. "In 2015, the budget for the Department of International Development (DFID) rose to 11.1 billion pounds overall, which today equals $14.7 billion - but was valued at $17.2 billion a few months ago, before the pound fell in value post-Brexit," she said.