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Time to stop aid for Africa?

February 5, 2009

Far from being all bad news for Africa, the global financial crisis is a chance to break a dependence on development aid that has kept it in poverty, argues Zambian economist Dambisa Moyo, who has just published a new book “Dead Aid”.

Moyo’s book, her first, comes out at a time when Western campaigners, financial institutions and some African governments have been warning of the danger posed to Africa by the crisis and calling for more money from developed countries as a result. The former World Bank and Goldman Sachs economist spoke to Reuters in London.

“I’m not saying its going to be easy, I’m just saying that there is a real opportunity for policymakers to focus on coming up with more innovative ways of financing economic development. In a way the crisis actually provides the African governments with the situation where they cannot rely on aid budgets coming through from the West.”

Moyo believes more than $1 trillion in development aid over the past 50 years has only entrenched Africa’s poverty, distorted economies and fuelled bureaucracy and corruption. She sees alternatives such as encouraging trade – particularly with emerging markets – encouraging foreign direct investment, microfinancing for enterprise and seeking funds from capital markets.

Moyo is not discouraged by the fact that all those options appear more difficult in the current environment.

“It just means the onus is on African governments to come up with a more compelling story as to why African governments are overseeing real asset investment not derivative products we don’t really understand.”

“If you focus on traditional markets like Europe and the United States, you come to the conclusion that markets are really damaged and it’s very hard to raise money in those markets, but if you start to look towards China for example which has $4 trillion of reserves, all of a sudden you could see there might be another opportunity to do a bond issue in the Chinese market for example.”

“The model that’s coming up, that I’m proposing, is essentially one where Africa and Africans become equal partners with the rest of the world, not one where there is kind of a donor and a recipient, where Africans are kind of viewed as secondary citizens,” she said.

“There is no other system, whether a political system or a business system, that has stayed as the status quo for 60 years when we all know it’s not doing what it’s supposed to do, it’s not generating growth and it’s not alleviating poverty.”

Moyo is not worried about the impact of aid being taken away:

“It actually tends to pool at the top so it’s not like the average African is going to suffer. They don’t see the aid anyway. Essentially it‘s going to really affect the bureaucratic processes at the top and would really impact on corruption.”

“You could take me to country X in Africa and say ‘look at this girl here and she’s going to school because of aid’. Yes, that’s true but on a macro aggregate perspective these economies are not growing. They’re not growing fast enough to ensure that when that girl is done with her schooling she can find a job.”

Moyo is unimpressed by Western campaigners such as rock stars Bob Geldof and Bono calling for lots more aid for Africa.

“I fundamentally object to the notion that Africa needs more aid and I do think it’s time to have many more Africans speak out, especially the policymakers, because many of the policymakers actually don’t support aid  and yet they stay in the background and they allow this money to come into the economy.”

“You very rarely see Africans on the global stage saying ‘actually we would like to have much more aid please’.”

“I do think a gap has opened up to allow other people to formulate a view on coming to the global debate and offering opinions as to what they think Africans want. But maybe we should start a website called ‘Ask the African’ because I think you might be quite surprised to find that people say ‘we want jobs’, I wouldn’t mind a flat screen television, I wouldn’t mind having my kids go on holiday sometimes …’”

Picture: Helen Jones photography

Comments

The huge irony is this:Thirty years ago China was destitute. Then their economy started growing, and ever since then the cries and moans about them taking our jobs began. We don’t want these countries to be poor and starving, but when they start to compete with us, this is a complete no-no. In real numbers, China and India’s growth has done the most to release extremely poor people from the shackles of poverty. And what do you think will happen once Africa gets its act together? Nevermind the ecological degradation that will follow when they follow in our consumerist footsteps. Europe has always enjoyed Africa as a source of cheap labour and a dumping ground for their waste. I would posit that there are forces much more powerful than this that are keepig Africa down. Aid is a big money game, and it will not go quietly into the night.

Posted by jperly | Report as abusive
 

I agree with Dambisa and all those here who want aid cut and is it funny that all the Africans here are saying the same. The aid is not for us and it means we remain dominated for ever as beggars. We mst stand up and say no.

Posted by Albert | Report as abusive
 

It should be a felony to give food to anyone who doesn’t have access to birth control.

Posted by Kurve Ball | Report as abusive
 

Excuse me Ma’am but, what do you really know about poverty?? you belong to E-lite African community, You have no idea what it means to sleep at night with no clue about what might happen the next day to you and your family?? tell me honestly ma’am ,have you slept hungry even for one night??? i don’t think so, ,, before you come up with poor articles like this one, you have to participate in field research in Slums,witness the severity of the situation,By the way, here is a fact, if all African rich and E-lite people payed 1$ per day for poor and needy people, there will be no poverty in Africa at all, THIS IS A FACT,!! Poor Africans get aid mostly payed by ordinary western tax payers, while rich Africans use all means to skip from paying taxes. EVERY THING IN AFRICA IS WRONG. SOCIETY, GOVERNMENT AND EVEN THE MENTALITY, I’m not optimistic about the future,,!!:(:(

 

Abdirahman DIRIE,Your comment makes absolutely no sense. In 50 years of western donor aid to Africa has anything changed? It is completely false and laughable to suggest that 900 million people in Africa are surviving on the relatively small money that trickle in as donor aid from Western governments.MARSHALL PLAN VERSUS TOKEN AID:I have already said that aid-giving is a feel-good PR exercise for the West. If the West genuinely wanted to help they could start by stopping UNFAIR trade dealing and if they mUst give development aid then it should not be in dribs and drabs, they should go for a full-scale Marshall Plan like the one US government formulated for war-devastated europe in the late 1940s.AFRICANS HELP THEMSELVES:In many african nations, most people either live off the land (i.e. cultivate crops, harvest and eat them. Please note that majority of Africa is not experiencing any famine or drought) or depend on their relatives working in the Western nations for money. Before the credit crunch, according to WORLD BANK, Africans working abroad send over 20 billion US dollars back to their relatives in the continent. In fact World Bank believed that the amount was probably above their estimates since many Africans abroad send money home through non-traditional means rather than through proper money wire transfer services offered by the likes of WESTERN UNION. (Non-traditional means include: Africans abroad bringing physical cash to relatives themselves or via trusted friends, African abroad buying vouchers that can be sent to relatives at home, etc.) By August 2008, it was estimated that Nigerians abroad had remitted close to 17.9 billion dollars to relatives at home.CONCLUSION:So what keeps most Africans alive is not western aid which hardly makes impact on ordinary people. I will readily make an exception for war-torn african nations where the aid is given directly to humanitarian agencies to feed hungry people. However since most African nations are not fighting wars, most western aid (which I assume are developmental not humanitarian aid) goes directly to African government agencies that misuse them and also to Western consultants hired to help manage the aid money.Africans are industrious people as I have noted in my earlier posts. What African nations need is to increase our economic engagement with China which is positive for most of Africa (bar sudan, zimbabwe and DR congo), repair or build new infrastructure and continue increasing private sector participation in our economies which should get more integrated at list at sub-regional level.

Posted by chimaoge okezue | Report as abusive
 

We should be rational when we are talking about the issue of aid to Africa. As every body knows Millions of people in Africa depends food Aid directly or in directly, therefore, it is not easy to say one time we should stop receiving aid from the rest of the world, which is not rational. Instead, there should be a clear plan that helps Africa to get out the policy of dependence to independence.Africa has vast lands for cultivation and rich of minerals while at the same time some countries in Africa like: Ethiopian, Somalia, Congo and Darfur (Sudan) are facing the worst humanitarian crises on earth. For example in Sudan alone there is 2million hector land for farming and yet ¼ of that land is not utilized. So, how can Africa escape these crises? Not only do we accuse those people involve the humanitarian work but also our leaders, recently the Ethiopian Prime Minister Meles Zenawi, was accused of misusing and diverting million of Dollars to Armies instead of his starving people. In Somalia, TFG officials frequently obstructed the delivery of humanitarian aid. … to the needy people of Somalia. more than 3.5 million of Somalis are believed to be depending on aid.On the other hand, the African economists and policy makers adopt replicated policies that don’t help Africa instead put us in deep crises, polices from the west that serve the interest of the west.As we know the world is divided into developed, developing and least developed, what do you thing if the whole world become developed? That means if every one opens his candy shop, who will buy candy? Therefore, developed countries will never allow Africa to develop.Well, with on going policies plus current corrupted African head of states, there seems no way out, except to depend on aid.

 

Another interesting new book, this time on the damage caused by corruption in Kenya, is also extremely damning on the role of those handing out development aid http://www.reuters.com/article/reutersEd ge/idUSTRE51B4UV20090212

Posted by Matthew Tostevin | Report as abusive
 

I totally with Moyo we do not need dead aid

Posted by Mahdi Muse | Report as abusive
 

Aid given to Africa actually costs lives, because it keeps corrupt and repressive regimes that would otherwise have crumpled in power. It is designed to create dependence so that Africa shall never stand on its own feet. It also makes corruption flourish, there is so many things wrong with western aid am struggling to find one single success story of the aid given to Africa. The solution is in FAIR trade for Africa and western countries should open their markets for African goods instead dumping their rubbish there.

Posted by Abdi Aadan | Report as abusive
 

From my recent travel in East Africa, I generally agree that Africa should rid the yoke of aid dependancy off its shoulder. Foreign aid I think became more of curse than blessing. Its addictive and corrosive. In my estimation only 25% or less actually reaches its intended target, the rest is looted both the by so called NGOs and the host governments. It also distorts local markets, especiall the foot market which in turn perpertuates hunger and proverty!There are extremes cases such droughts and displaced people due to civil wars that should be exception and temporary, but the rest of it, africa will be healthier, stabler, more efficient, less corrupt, more self-relient place without foreign aid. Africans have to look out for themselves and decide what’s constructive toward the development of their nations and continent.

Posted by Shabeel | Report as abusive
 

I also am traveling in Africa, I’ve been from Cape Town through Namibia, Botswana, Zambia, Tanzania and now Kenya.In Zambia, the Government doesn’t build a road or lift a finger unless foreign aid pays for it.It’s ridiculous, Africa’s bureaucrats and leaders now tax their people, do nothing for them and keep the place looking poor so they can continue to get loads of aid.East Africa has fertile soils, abundant fresh water and loads of natural resources.There is no excuse for it still to be on the aid handouts and a bit of tough love would be good for a change.There is plenty of money in Africa it is just badly distributed – see Robert Mugabe.If the West cuts off the aid, the people will be forced to demand change from their leaders – a bit of domestic reorganisation will help this continent in the long term far more than aid.Aid just fosters the corruption and patchy roll out of services. It’s a disgrace. Such a land should be flowing with riches. I don’t want a single dollar of my taxes going into this continent unless it is in a temporary response to some one-off crisis like a flood.

Posted by Traveler | Report as abusive
 

It seems many of the ordinary Africans have the same view about the an Ending AID that our beautiful continent recieves from the West; It is a way to keep Africans lazy, and on their knees all the time. Let the west keep their AID to themselves, we Africans don’t need it. As the writer said the AID packages only go to rich bastards who call themselves leaders and they would be the ones to feel it when it’s gone but not me and my fellow Africans. I hope many people will understand what I mean. It is time the Africans believed in themselves…

Posted by shuaib | Report as abusive
 

I absolutely agree with the author that it is time to say NO AID at all means. Africa should rely on itsself. Because aid blocks development. It creates corruption.In africa,there are all tools to use for development such as manpower,know-how,raw materials,good climate, technology and as well capital. The latter maybe questional,but there is goog reason to beleive,it is there.

Posted by Said W. | Report as abusive
 

I agree with Dambisa Moyo. Africa always turn the West for solutions to its problems ingnoring all the oppotunities and all things that can help on the continent. Not all is bad in Africa. Our weakenesses must be our strenghs.Having said this, I would like to let you know there is an experience of good governance and democracy in West Africa that many are not aware of. Benin is on the african countries that are doing well economically, politically and socially despite the crisis.To find out Benin, you may go to my blogs : http://beninpolitics.spaces.live.com/def ault.aspx orhttp://benin-politics.blogspot.com/Tha nks.

 

What are all you guys talking about!!!? Come down here and live with us then you’ll shut up. Much as I absolutely HATE AID and dependency, we need it, period. If only to stave off mass starvation and unrest. There would be violence on a a scale you can only begin to imagine if for example food AID and other types of AID was withdrawn. The situation here is COMPLEX…no easy solutions, no pithy little slogans will solve the problem.I’ve seen a lot of unheralded NGOs and individuals do marvelous work. If AID sends one (JUST ONE) kid to school, I don’t care, thats one saved, thats good enough for me. Dont give me your economic calculus. I shudder when I hear quotes like “Freeze AID and then the populace will be FORCED to DEMAND services from the government”!?? What you mean is we will slaughter ourselves in a bloody never ending revolution for the remaining resources.I hear people saying “Trade not AID” absolutely – BUT here’s the irony, we need the Development AID to develop the institutions and capacity to actually do the Trade! And who out there in the west dares to mention TRADE without shameful blushes? Those of you “traveling” or have “traveled” through these parts…how dare you mention trade? Skewed terms of trade are the 3 Billion Dollar subsidy question – your farmers subsidies distorts world trade in the only areas we would have some competitive or comparative advantage – EU and USA both – all guilty – We receive less development AID than all your needy greedy farmers, a mere 5% or less of the population – condemning 832 million of us to gratefully receive your AID. We’ll take it thank you very much, if only to live one more day…I’ll take it for my kids, and the hope of a future.We NEED AID, WE NEED More of it, we need more of other things too, science, technology, knowledge, skills, we need a massive airlift of our young to western and eastern academies to learn, we need MORE western interference in our affairs not less…We need regime change NOW in Zimbabwe…cmon step up, don’t half meddle, come in and meddle with a purpose and with some spine…WE NEED YOU, HELP US, and I aint too proud to beg and will not look a gift horse in the mouth….I’m Kaume Marambii, am an African, I’m proud but I’m pragmatic too. My email is kaume@yahoo.com, feel free to spam me, but I speak my truth. I’m an African, I’ve lived here all my 39 years, have studied here and expect to die here. lets get real. Lets appreciate complexity and avoid sweeping dramatic statements that aim to simplify a v v complex situation.

Posted by Kaume | Report as abusive
 

Before Africans say aid hurts Africa more than it helps due to mostly corruption and bad management both internally and externally, let us just think about one of the main factors that lead to corrupted leaders in the first place.How many Africans in the West or in the Africa provide moral and financial support to corrupted leaders from their own tribes and clans? Unless Africans, both educated and uneducated whatever that means, realize the role they play in perpetuating this corrupted systems, starting with each individual, Africans will not be able to fully overcame the negative and unintended consequences of aid. The onus is on educated Africans, the primary source of corruption and mismanagement.

Posted by AE of Free State | Report as abusive
 

It is good how this smart girl analyed how aftican,s are passive and i agree her seggestionskeep to that point other Africans also must thing like that

 

…rather than an outright cancellation of it,A gradual withdrawal of Aid may also be considered…as an absolute withdrawal might be disastrous. Foreign aids should not be routed through African governments, they should be tied to infrastructural development and Multi – Phased projects and organizations that are transparent and accountable.

Posted by Tolu Popoola | Report as abusive
 

AE of Free State,Your statement is ignorant. Most Africans living in the West send money to their poor relatives back in Africa not to what you stereotypically term “corrupted leaders from their own tribes and clans”Before the credit crunch, according to WORLD BANK, Africans working abroad send over 20 billion US dollars back to their relatives in the continent.

Posted by chimaoge okezue | Report as abusive
 

It is quite easy to say stop aid when one is outside the country and doing quite well for oneself. Dambisa Moyo holds a PhD in Economics from Oxford University and a Masters from Harvard. Now not all Africans are so “blessed” as to have the funds to study at these top universities and then spout useless nonsense. While I do agree that Africa needs more open export markets, Africa is not the only continent that obtain aid from Bretton Woods (World Bank, IMF, WTO) group. The aid that goes to Africa is nominal at best. Aid is not the problem, our leaders are. Our leaders go to international summits and instead of putting Africa’s interest forward, they go shopping, or worse (see photo).The Question from the NY Times: What do you think has held back Africans?Ms. Moyo’s answer: I believe it’s largely aid. You get the corruption — historically, leaders have stolen the money without penalty — and you get the dependency, which kills entrepreneurship. You also disenfranchise African citizens, because the government is beholden to foreign donors and not accountable to its people.My reply:And whose fault is that? We get the leaders we deserve. If we were to put in competent and capable leaders and demand accountability, our leaders would be beholden to us. Massive aid was given to European countries after the War but the leaders knew that their first obligation was to their people. African leaders seem to have no such obligation. To put it simply, if you are given $5.00 for the purpose of buying your mom a gift, and then you spend the money on yourself, the $5.00 is not the problem, you are. You have not used it for its intended purpose. Do you now turn around and blame the person who gave you the $5.oo? Does your mom now blame that person as well?Here is another example (my apologies to the Ghanaians):Ghana won its independence in 1957, the same year as Malaysia. In the 1950s both countries were on an economic par – equally poor and equally dependent on the export of raw materials. Today, Ghanaians get by on an average of about $300 per year, while Malaysians earn over $3,000. Ghana is still exporting raw products like cocoa and gold, Malaysia makes its own cars and boasts skyscrapers that rival anything in New York or London. The development of one product – palm oil – tells part of the story. Ghana grows and processes the rich red oil to make soap and cooking. Malaysia – which imported its first palm oil trees from west Africa in the 1950s – has not only become the largest palm oil producer in the world, but has also developed a high-tech industry which makes sophisticated chemicals and food additives from the raw berries. The recently retired Prime Minister of Malaysia Dr Mahathir Mohamad puts it best:”Political stability is extremely important. Without political stability there can be no economic development. People are not going to put money into a place where there is no certainty”.The Malaysian state had established a solid framework of laws that allowed entrepreneurs to flourish. And the lack of such institutional framework is Africa’s problem, not aid.The New York Times question: Why didn’t you get a bond issue going in your native Zambia or other African countries?Ms. Moyo’s reply: Many politicians seem to have a lazy muscle. Issuing a bond would require that the president and the cabinet ministers go out and market their country. Why would they do that when they can just call up the World Bank and say, “Can I please have some money?”My reply:And pray tell who would buy bonds in a country that is not stable? This is business, not philantrophy. Buying bonds require security something that most of our governments seem to be unable or unwilling to provide.

Posted by J. Sayegh | Report as abusive
 

It is obvious that leaders of Africa are thugs and lack the responsibility of what they stand for. thus Aid to Africa has given strength to HOO HAA leaders who lack humanity and understanding of the position they hold for the people they said they represent. this has also spoiled the hope of getting statesmen leaders among the african community who i believe can serve the intrest of the people of Africa with honest and transparency.However, on the other side it is clear that members of the UN failed to stand firm of what they believe by only presenting the UN horse shoe like table issues that do not represent the real need of the Africans. Africa is continent that need economic and political support that can lead to a better change for good therefore the UN should focus on issues that can make real change for the africansI believe it is the time that UN re defines its policy to africa and stop the aid that goes to regimes and governments that lack transparency or otherwise hurts the people it said will benefit. the permanent members should also stop using VETO when the UN tries to intervene genocides committed by those fattened by the aid given by the UN.ciilow

Posted by CIILOW | Report as abusive
 

I support Moyo’s analysis. Western Aid has not worked for Africa. Look at Uganda. 20 years ago, we had passable roads, railway line, schools, parastatal bodies, all regulated by different levels of government. Today, I am not sure I know what we have. For roads, we have streaks of gravel here and there with gaping holes in and around. The railway line and all parastatals were sold off to the highest bidders. The well-to-dos work for NGOs with no incentive of creating their own work. The government is waiting for Aid from the West to build roads!!!

Posted by Naki | Report as abusive
 

I came to this conclusion many years ago after having worked in both sub-Saharan Africa and Asia with bi-lateral and multinational donor organizations for several years. What Dambisa Moyo has said was actually over due. I think whatever little aid that trickles down to people, damages and even kills local initiative and insults self-respect and dignity of the population. Often foreign aid comes with agenda that may or may not meet people’s critical needs.Governments in poor countries are almost assured of timely financial assistance from one source or the other from donors and multi-national financial institutions, when going gets tough. This almost works as a disincentive for governments to try harder to stand on their own feet, and take necessary but politically unpopular decisions.I feel instead of giving aid and grants to poor countries, rich countries should give a better deal for commodities, products and services to these countries. Unlike the current practicing of giving bizarre concessions, it should be the role of governments in poor countries, to ensure better wages, benefits and work guarantees from multinationals. They should insist on charging higher rates for their commodities and raw materials, and don’t be cowed down by “international trade and pricing” policies, which can easily be maneuvered and tweaked by rich nations. If need be, they should follow example of oil cartel for every item of trade. By doing so, money will go to common man and women through trade, commerce and manufacturing jobs. It will do away with opportunities for governments to mismanage and squander funds. Rich countries can use the same aid money to subsidize imports for which they will be paying reasonable prices abroad.Such a policy, we may call ‘Global Fair Deal’ will rapidly raise standards of living and eliminate poverty in poor countries. It will eventually have a beneficial effect on governance too. Most importantly poor countries, thereafter, will not be begging for foreign aid but earning an honorable living with dignity. This will result into a true new world order where each country will stand as equal among nations. Is this something we want? This can only happen if the third world gets effectively united. And why not?Javed

Posted by Javed Ahmad | Report as abusive
 

The reason why Africa has needed so much aid for so long is because they have NOT gotten a fair deal in global trade.Western and Eastern nations have engaged in bribery for decades so that they can get cheaper goods from and entry into African markets. If the developed nations are serious about economic development in Africa then they need to prosecute and judge those corporations and financial entities that engage in bribery. That’s what the developed nations should do on THEIR end.For the African people the only thing they can do is hold their political leaders accountable.

Posted by Tarik73 | Report as abusive
 

I can in some way be grateful to countries that have been using their finances and talents to give aid to Africa. But we all agreed that the stragegy has not worked well for the continent of Africa over the years.What is needed is for Africa to be seen and treated a partner in the globalization process by opening up global markets, especailly western markets to African products and services. Money that has been given to corrupt officials, most now be set aside for innovative and creative African individuals and institutions that will creat more opportunies for the ordiniary people to have employments, and earn incomes that will eventually eliminate the need for aid or handout to the continent and its people. People love to be empowered! Aid had eliminated that opportunity for Africa and its people!

Posted by Sylvester S. Yarpah | Report as abusive
 

Africa’s problem is not it’s people buts it’s leader. There’s a new generation of African leaders soon to rise and it will Starts With a new AU voted in for the people by the people. Dambisa is doing a great job{PERIOD} I’ll be glad to help however I can and I do recommend DEAD AID to any difference maker . I have a vision for a United States Of Africa and am not the only one, This makes me hopeful , Let’s stay charged in the fight for the change we need in africa.- Sallah* Myspace.com/dsallah

 

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