A report on Reuters today says:

African countries cannot absorb increased aid flows because their financial systems and management policies need strengthening, the International Monetary Fund's top Africa official said on Monday.

Abdoulaye Bio-Tchane, director of the IMF's Africa department, told Reuters in an interview on the sidelines of an aid conference in Mozambique that African governments need to build up their financial institutions, management policies, and governance to handle aid more effectievly.

"You have clearly some capacity constrains or (lack) financial capacity to increase and absorb aid and you need to work on those issues. You need also to look at governance issues," Bio-Tchane said...

Bio-Tchane's warning comes amid increased donor contributions this year to multilateral development banks and their lending facilities for poor countries, which is expected to boost grants and loans to the globe's neediest nations.

Abdoulaye Bio-Tchane's comments reinforce the need for better governance and a bottom-up approach to aid. We have to get cleverer than just spending money: we need to ensure it actually achieves real improvements.