BRITAIN is failing to ensure its support for trade in developing countries benefits the poor, a damning report from the aid watchdog has found.

The Independent Commission for Aid Impact (ICAI) review said Britain’s aid for trade risks “focusing too narrowly short-term UK interests.”

Britain has shifted its focus in Africa towards larger economies such as Ghana, Kenya, Nigeria and South Africa, where its potential trading opportunities are stronger at the expense of poorer countries, it found.

Commissioner Sir Hugh Bayley, who led the review, said: “Trade is a powerful driver of economic growth, but growth doesn’t automatically help poor people. 

“There are winners and losers, so aid for trade needs to focus relentlessly on ensuring that small businesses, smallholder farmers and employees reap some of the value of greater international trade.”

Giving Britain’s aid for trade an overall amber-red score, he added: “We saw UK aid helping poor countries to argue their case at the World Trade Organisation.

“The UK wants everyone to buy into a rules-based international system, so it is important we keep helping poor countries to engage with it even when our aid budget is tight.” 

The foreign affairs committee has previously claimed China’s Belt and Road Initiative may encourage countries to join its “efforts to undermine certain aspects of the rules-based international system.”

The ICAI report also said Britain’s reputation suffered when its aid commitments were “substantially reduced” mid-year in Kenya and Ethiopia, leading to “implementing partners to cancel some programmes and make staff redundant.”

Among the five recommendations it made was that the government should develop and publish detailed guidelines for aid programmes “to ensure that the pursuit of secondary benefits to the UK does not detract from its primary poverty-reduction objective.”

A spokesman for Global Justice Now said Britain’s trade rules “have fostered a deeply neocolonial, extractive economy which is fuelling runaway inequality and climate change.”

He added: “This damning report from ICAI highlights what many of us have warned about for some time — the UK’s aid programme is increasingly focused on what’s good for global big business with, at best, only a passing concern for what it means for those the aid is meant to help.

“Frankly, the poorest people would be better off without this sort of aid.”

Liz McKean, Director of Campaigns, Policy and Programmes at War on Want said: “The UK government’s ‘aid for trade’ policy proves that poverty is political. It benefits the UK’s own economic interests, while cutting aid for the poorest. It is unprincipled, failing – and masks what is really going on.

“Trade deals are part of the global economic system – a system rigged to boost corporate profits and benefit the richest countries. The UK and other rich Global North countries have extracted $152 trillion from the Global South since 1960, through unjust trade, tax and financial mechanisms – an amount far outstripping aid budgets.”

An Foreign, Commonwealth & Development Office spokesperson said: “We welcome the report’s publication and will publish a full response in due course. HMG is committed to reducing poverty through its Aid for Trade programmes and will take on board the ICAI report and its recommendations”