POVERTY is by far the biggest business in Africa. Now thanks to Tony Blair and Bob Geldof it is boom time again.

Whatever happens at G8, one thing is certain — a tsunami of fresh money is about to come rushing down the aid pipeline. The “aid business” is waiting with open arms.

Ethiopia may rank near the bottom of virtually every league table — for child mortality, per capita incomes, life expectancy, despite more than two decades of western largesse — but when it comes to the aid game, the country plays in the Premiership.

Among the charities, aid groups, development agencies and donor organisations that make up the so-called “international humanitarian community”, Ethiopia is queen — an honour resulting from the 1984 famine and the unprecedented international reaction.

The legacy of Bob Geldof’s Live Aid charity record, Do They Know It’s Christmas?, and the Band Aid concerts, which raised an estimated £150 million, lives on. Many of the organisations that flooded into the country then are still here, joined by others as new problems have arisen.

The shabby streets of the capital, Addis Ababa, are dotted with billboards of non-governmental organisations (NGOs) and aid groups from the Christian Right to liberal Left dealing with everything from adoption to female genital mutilation to vaccinations.

“Ethiopia has a cachet among aid workers,” one insider said. The country is a particular favourite among young western idealists keen for field experience.

It is also good fun. At night, the car parks of trendy bars and fancy restaurants — opened by yuppie Ethiopians returning from abroad with money made in private sectors not allowed at home — are packed with duty-free 4x4 vehicles.

Inside, lively debates take place. Prices, though way beyond ordinary Ethiopians, most of whom live on £60 a year, are cheap even by the standards of the most modest western salary. Through a mix of German, Scandinavian and American accents, terms such as poverty alleviation, projects, capacity building and gender balance, keep recurring.

One issue, though, rarely has a hearing in this politically correct world: why doesn’t it work? Why is it that after an estimated trillion dollars of aid to Africa over the last four decades, average per capita income across most of the continent is, according to the World Bank, lower than at the end of the 1960s?

Some of that answer lies in the aid business itself. One report recently estimated that some 70 per cent of all money raised went on NGOs’ administration — cars, salaries, equipment, and the all-important workshops and seminars.

There are some notable exceptions — Save the Children Fund and Oxfam among them — but much money donated on high streets never reaches those for whom it was intended.

African governments cream off some while local businessmen charge exorbitant prices for supplies, ex-pat salaries take another chunk, as does the running of the head offices back home. Tenders, particularly for UN contracts, are rarely conducted properly.

Most British aid charities try to keep administrative costs to about 10 per cent. Care International says that 91 per cent of funds are spent on its 130 projects worldwide. Cafod said that it also spent less than 10p in the £1 on administration.

But the big boys are the development gurus of the organisations and relief and development agencies of donor countries. In Addis Ababa, these “experts” peer down on shanty town from gleaming modern glass and chrome towers housing the United Nations, World Bank, the African Union, the European Union. They rarely venture out of what one leading African commentator has termed their “bubbles”.

A report by ActionAid — which infuriated the British Government — said that consultants and western companies benefited to the tune of 60p for every £1 intended to go towards eradicating poverty.

Last May, the World Bank itself admitted for the first time that consultants were taking $20 billion (£12 billion) from global aid budgets — 40 per cent of the total amount given by the industrialised world for overseas development.

In his seminal 1989 work, Graham Hancock, a British author, termed these beneficiaries the “Lords of Poverty”. “It is aid and nothing else that has provided hundreds of thousands of ‘jobs for the boys’,” he wrote. Since then, he told The Times, matters had got “much, much worse”.

Yet it is ordinary Africans who are often its biggest critics. “It is quality, not quantity. If the projects and mechanisms are not there to absorb it properly it will just be wasted — or stolen,” said Abebech Gobena, who cares for homeless children in an Addis Ababa orphanage.

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