Earlier this month, Zambian economist Dambisa Moyo argued that Africa needs Western countries to cut long term aid that has brought dependency, distorted economies and fuelled bureaucracy and corruption. The comments on the blog posting suggested that many readers agreed. In a response, Savio Carvalho, Uganda country director for aid agency Oxfam GB, says that aid can help the continent escape poverty - if done in the right way:

In early January, I travelled to war-ravaged northern Uganda to a dusty village in Pobura and Kal parish in Kitgum District. We were there to see the completion of a 16km dirt road constructed by the community with support from Oxfam under an EU-funded programme.

The road is bringing benefits in the form of access to markets, education and health care. Some parents say their daughters feel safer walking to school on the road instead of through the bushes. Many families have used the wages earned from construction work to pay for school fees and medical treatment. This is the impact of aid.

Having lived and worked in east Africa, I have witnessed the positive effects of aid. But done badly, it can be very limiting and even has the potential to create more harm. To avoid this, it must be provided within an enabling environment in which it is used as a catalyst for change and not as an end in itself. Governments must show leadership through an accountable system.

For individuals, access to resources – including aid - is like an investment. Aid can build up poor people’s assets, support good governance and enhance skills and capacities to bring about transformation. But it can become a bane when it makes communities dependent, lazy and hopeless. Governments, aid agencies and the United Nations need to ensure the delivery of aid is well planned and coordinated, leading to higher self-reliance among poor communities.

Aid is also beneficial when trade is fair. There are several examples in Africa, like the case of coffee farmers in Uganda, where aid has been used effectively to improve the overall quality of the coffee seeds, thereby giving farmers better prices for their produce. When they have access to markets at home and abroad, they generate income which is ploughed back into increased output, better access to health and education, and overall improvement in the quality of their lives. To make this happen, developed countries need to stop procrastinating and put in place fair trade practices.

Aid works well if governments are accountable – in other words, when they are responsible and encourage active citizenship. On this continent, civil society is still weak and needs to be nourished. But stopping aid will not resolve frustrations about poor governance, which is partly a result of weak public scrutiny. Aid should be used to help fight corruption and promote accountability through active input from ordinary people.

As I have argued here, receiving aid is not just an act of charity. It should be understood as the right of poor communities to a life of dignity. As stated in international conventions, people have a right to good health, food, water and education. We all need to ensure the planet’s resources are equitably distributed. As Mahatma Gandhi said, you must be the change you want to see in the world.

So what do you think? Which argument is most convincing?

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

Where once African officials might have viewed infrastructure projects solely as a good source of kickbacks, these days there is pressure from electorates, at least in some countries, to deliver on promises of improvements.

The growth that many African states have enjoyed in recent years has exposed the failure of the continent’s infrastructure still more starkly – with even South Africa suffering the kind of power outages that much of the rest of Africa has grown far too used to.

Infrastructure is in theory the focus of this year’s African Union summit, although as always it will be overshadowed by crisis in Somalia, Zimbabwe, Congo, Darfur etc…

The global financial crisis is an even bigger threat to hopes of strengthening Africa’s infrastructure.

Last year, Kenya, Tanzania and Uganda all set out to borrow money internationally through sovereign bonds, for the upgrade and expansion of roads, water supplies, irrigation schemes and electricity generation capacities. That followed Ghana’s successful launch in 2007 of sub-Saharan Africa’s first Eurobond outside South Africa to help fund infrastructure development.

But the plans of the east African countries have been knocked off course despite early assertions from confident governments that they would not be affected by the global downturn which began in the Western world.

Kenya is exploring alternative ways of raising the $500 million it had originally planned to raise from a debut Eurobond. Tanzania and Uganda both made similar announcements.

But the problem of poor infrastructure remains as pressing as ever and could restrict growth in Africa once the current global financial storm ends.

A senior World Bank official has said Africa risks a “lost decade” of underdevelopment if it neglects projects to boost energy and transport infrastructure because of the global financial crisis – comparing the situation they face now to that in Asian countries a decade ago.

How much of a priority should infrastructure be for African governments at this time? Is there anything they can do to raise the money needed? What do you think?

The announcement by a U.S. investor that he has a deal to lease a swathe of South Sudan for farmland has again focused attention on foreigners trying to snap up African agricultural land.

A few months ago, South Korea’s Daweoo Logistics said it had secured rights to plant corn and palm oil in an even bigger patch of Madagascar - although local authorities said the deal was not done yet. Investors from Asia and the Gulf are looking elsewhere in Africa too.

Investor interest in farmland – not only in Africa – grew sharply after food prices shot to record highs last year. Although commodity prices have fallen since, there is still anticipation of long term demand growth once the world emerges from its current economic troubles.

Philippe Heilberg, chairman and CEO of New York-based investment firm Jarch Capital, told Reuters he saw ripe opportunity for decades in south Sudan’s Mayom county. The deal covers land nearly twice the size of the Indian Ocean island of Mauritius.

Land is being leased from General Paulino Matip Nhial, Deputy Commander-in-Chief of the Sudan People’s Liberation Army (SPLA) - the armed wing of the ruling Sudan People’s Liberation Movement (SPLM) in semi-autonomous South Sudan. Jarch Management is also buying an interest in a local company from Matip’s son.

But should Africa be handing out its land to foreign investors and will the local people and countries involved be the ones to benefit?

This commentary in the Financial Times made comparisons with the colonial grab for Africa’s resources and points out the damaging legacy that remains.

“There is a need for investment if the continent’s full agricultural potential is to be achieved. At a time of growing shortages, there is also an obvious need for African governments to prioritise domestic supplies. If the continent is to avoid repeating history, the big deals and speculation should come later,” it said.

Is it wise to discourage such investment, though, if investors are willing to bring big money to put the land to more efficient use than is currently the case? While some areas of Africa are densely populated and every scrap of ground is farmed, other hugely fertile areas are barely used.

Investors argue that they can bring jobs long term and will improve local infrastructure - perhaps more so than if they were taking land for less emotive mining or oil concessions - as well as increasing food supplies and foreign exchange earnings. Elsewhere in the world, mechanised agriculture and bigger farms have led to major productivity increases - although environmentalists argue they can cause damage too. Despite their best efforts, African governments have not always proven themselves the best at managing agricultural resources. Might Africa miss out on development that has helped fuel broader economic growth in countries such as Brazil?

Land ownership could also prove contentious. In the distant past, it was often held by communities as a whole or vested in traditional authorities. State officials now often have the greatest say. That opens the potential for official abuse of yet another valuable resource. Since governments can come and go unpredictably that also means an increase in risk for investors and can only be a further encouragement to cut costs for a quick return.

Heilberg said Jarch felt comfortable investing in Mayom and that the local politicians and population would be accepting of the investment.

“With risk, you have to look at risk and reward together - this is why we pick our areas very carefully,” he said.

So is major foreign investment in land a danger to Africa or is it an opportunity that the continent cannot afford to miss? Is there a way of making it work for everyone’s benefit? What do you think?

(Picture 1: A farmer cuts rice plants to sow at a paddy field in Ivory Coast, REUTERS/Luc Gnago)

(Picture 2: Boys carry sacks of weeds through fields of rice in Senegal. REUTERS/Normand Blouin)

Given that the leaders of the world’s most firmly capitalist countries are splashing around unprecedented billions to nationalise banks, prop up industry and try to get economies moving, it might seem churlish for anyone to question South Africa’s ruling ANC for planning to spend a bit more freely.

This weekend, the African National Congress set out its election manifesto priorities of creating jobs and improving education and health - promises interpreted by many as marking a generally leftward shift under the leadership of president in waiting Jacob Zuma.

But the plan raises the questions of how the spending will be paid for and how dramatic a shift to the left there will be - of major interest to investors as well as South Africans.

“Zuma did not attach a price tag to the manifesto, but ANC leaders privately admit, to allay fears of a tax hike, that it would be too costly to implement,” said this article in the Sunday Independent.

Africa’s biggest economy has grown significantly since the end of apartheid in 1994, although the dynamism had started to falter even before the global financial crisis spread gloom around the world.

South Africa’s poor and its workers had long complained that the benefits were not being shared around fairly and that only those in a new elite were thriving. The leadership under Zuma, widely expected to become president this year, was always going to be under pressure for more social spending from the ANC grassroots and the party’s union and Communist Party allies.

The pressure may have increased further with the emergence of the new COPE party after the ousting of President Thabo Mbeki. Although COPE’s electoral impact is uncertain and it has not yet spelled out its policies clearly, the fact that close allies of Mbeki are behind it has suggested it is likely to align more with the former president’s stance, seen as ‘pro-business’.

Zuma has always been at great pains to spell out to business leaders and foreign investors that there would be no dramatic changes under his rule. Flight of investment could further weaken the rand, mean job losses just at the moment when the ANC wants to create more and force up government borrowing costs.

That could make it even harder to finance populist pledges without resorting to measures that might create even more financial instability.

This article in South Africa’s Times raised questions over the ANC’s plans for the central bank and whether that would damage its standing as a pillar of macroeconomic stability seen as vital for growth.

It is certainly going to be a very tricky time. How substantial do you think any shift to the left is and would it be for the best? If conflicting promises have been made to different interest groups then which are going to be met? Can they all? If not, then what will be the reaction of those who feel disappointed?

(Picture: President of the ruling African National Congress Jacob Zuma dances on stage at his party’s election campaign launch. Reuters)

If you lived on an archipelago that defined paradise with palm-fringed white sand beaches and emerald green waters, you would expect a relaxed, lazy pace of life.

Lazy would be a generous description of the Seychellois soldier’s wave at the entrance to State House as I arrived with my local colleague George Thande - who is admittedly a regular visitor here.

The Seychelles were ruled by the French before the British and State House in the capital Victoria is every bit the luxurious colonial mansion: a lush garden exploding with tropical colours; an oil painting of Britain’s Queen Victoria hangs in the wood-panelled reception room close to a portrait of Castor, a runaway slave from the 19th century with a fearsome reputation; a Daimler and Rolls Royce are parked on the forecourt.

But President James Alix Michel, cannot afford to be relaxed. This is an exotic destination at the sharp end of the global financial crisis.

The Indian Ocean archipelago may lie thousands of miles from the financial hubs of the world, but the bankers on Wall Street and in the City of London, not to mention the celebrity visitors, help keep the Seychelles’ tourism-dependent economy afloat.

On Friday, however, Michel told Reuters he thought visitor numbers might drop by as much as 25 percent, a painful blow for a heavily indebted economy –  its $800 million debt is somewhat more than 2007 gross domestic product according to World Bank figures. The country, with only 85,000 people, is in desperate need of foreign currency to replenish severely depleted reserves.

When the Seychelles failed to service an interest payment on a $230 million bond late last year, it called in the International Monetary Fund, which pledged a 2-year $26 million rescue package. Now negotiations are underway with creditors over how to re-structure the debts.

On Friday, Michel called on creditors to forgive fifty percent of the country’s debts.

But should they be forgiven or was the previous government reckless in the way it borrowed heavily to invest in social projects such as free education, free healthcare and housing over more than two decades?

Or does the fault lie with the creditors who issued loans they perhaps knew were ultimately unsustainable? The government might well argue that while it had borrowed irresponsibly - if it felt for good reason - but there had been no shortage of people willing to stump up the cash.

President Michel is holding out for an oil strike under the Seychelles’ offshore plateau. Seismic surveys suggested there could be reserves of oil and gas amounting to billions of barrels. But that’s not for years to come.

The Seychelles can’t wait that long.

(Picture 1: Miss New Zealand, Lauralee Martinovich, poses for photographs after taking the 2nd Princess title in the 1997 Miss World Pageant in the Seychelles. Reuters/Mike Hutchings)

(Picture 2: Seychelles’ President James Michel poses for a photograph during an interview with Reuters in Victoria. Reuters/Richard Lough)

The new U.S. command for Africa began independent operations on Wednesday, after being carved out of three other Pentagon units previously responsible for the continent. President George W. Bush originally wanted Africom to be based in Africa, and Liberia has offered to host it. But the plan met with considerable hostility on the continent, especially from big powers South Africa and Nigeria and oil giants Algeria and Libya. Many ordinary Africans were also cynical, believing Africom would be a cover for Washington to counter growing Chinese influence and control vital oil supplies from West Africa — expected to provide 25 percent of U.S. needs by 2015.

The hostility forced Washington to rethink its plans and Africom, expected to reach its full complement of 1,300 by the end of next year, began work from Stuttgart, home of the existing European command, although officials clearly expect to open a base in Africa sometime in the future. It also pushed U.S. officials to emphasise that there was no hidden agenda, that Africom would not threaten the sovereignty of any nations and that a base would not be built in Africa without the full agreement of potential host nations. They also said half of Africom’s leadership would be composed of civilian agencies including the State Department. Africom’s stated aim is to help African countries face everything from natural disasters to terrorism and its targets will including drug trafficking, arms smuggling and the kind of piracy now plaguing the waters off Somalia. Experts say U.S. forces have been cooperating quietly for years with African armies, particularly in the Horn of Africa and the Sahel where rebel and al Qaeda-affiliated groups operate. They say Africom got a bad press initially because it was associated with heavy-handed U.S. policy in Somalia and as part of the U.S.-led ”War on Terror”, but now Pentagon officials are treading more carefully, realising how sensitive Africans are about suggestions Washington is trying to dominate.

Do you believe U.S. assurances about Africom or is it the thin end of the wedge, a precursor to a boosted American military presence on the continent that could attract rather than deter terrorist attacks and infringe on the sovereignty and independence of African nations?

Isolation might seem like a good idea when it comes to the storm sweeping global finance and there is no doubt that African countries are among the most isolated in the world economy.

Avoiding the impact seems unlikely, though, particularly at a time when Africa as a whole has been enjoying its fastest growth for decades and the continent has become an increasingly popular investment destination - not only for Asian countries in search of resources but for frontier investors willing to take higher risks for higher returns.

The African Development Bank’s chief economist told Reuters that Africa should withstand the first round effects of the financial crisis but that export demand and access to finance could be hit in the longer term.

Although some still see Africa’s isolation as a measure of protection, the enthusiasm of frontier investors has been fading too. The impact can be seen on stock exchanges from Lagos to Lusaka. Ghana has postponed a new debt issue due to the global conditions.

Such things might not appear to have much direct impact for most people in Africa, but rising world prices for food and fuel are being felt even in the remotest villages. If the prices of Africa’s export commodities fall because of global turmoil then that pain is likely to be felt too. If rich countries can afford less aid, that could also be damaging for some dependent states.

What fallout do you expect in Africa? What action might mitigate any damage?

Italy settled its colonial era dispute with Libya at the weekend with $5 billion in compensation for wrongs done during colonial rule. The money will be invested in a major new highway as well as used for clearing mines and other projects. Both sides say that will allow them to make a new start.

Relations between Libya and Italy had been especially difficult and this was a very specific dispute, but Italian colonialism did not last all that long in Africa - even if there were episodes of particular nastiness while it did.

What about the far more important colonial players in Africa: Britain, France and Portugal? Not only was their presence far longer lasting, but they were more heavily involved in the Atlantic Slave Trade, which sapped the strength of west and central Africa for centuries and forced millions of its people into death or slavery. Calls for reparations from some quarters have never died down.

The colonial powers later carved up the map of Africa for their own administrative convenience and with little regard for those living there. Independence movements were often suppressed with heavy force — including in Algeria, the former Portuguese colonies and Kenya.

Since independence, the former colonial powers have given billions of dollars in development aid and other assistance. They generally have far better relationships with former colonies than Italy had with Libya.

But is it time for other former colonial powers to apologise and pay up for misdeeds on the continent? Or should the past be left for the history books?

The road to Kenya’s Tana River Delta from the Indian Ocean resort of Malindi is a lonely stretch of tarmac punctuated only by road blocks manned by armed police.

Few people from the outside world come this way.

Most foreign and local holidaymakers heading for the popular Lamu Islands prefer to fly rather than use the road.

On either side, grasslands stretch to the horizon. People here live as they have for decades, making a living from grazing animals and fishing.

But a proposed sugar and biofuels project would see 20,000 hectares of the pristine wetland planted with cane.

The plan has sparked anger among some locals and conservationists, who say it is a threat to their way of life and a precious eco-system.

I was given a tour of the area by government officials and the project backers.

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The government is working in partnership with the private sector to grow sugar in the area in a bid to fill an annual deficit, create jobs and latch onto enthusiasm for biofuels in the face of surging oil prices.

East Africa’s biggest economy imports about 200,000 tonnes of sugar every year as its western sugar belt does not produce enough to meet requirements.

But opponents of the Tana project say it will hurt livestock-keeping communities through loss of grazing lands and also threaten hundreds of wildlife species, including birds and rare sharks.

The pastoralists and the conservation groups, which include Nature Kenya and Britain’s Royal Society for the Protection of Birds, have filed a case against the project in court. Earlier this month, the nation’s high court stopped the project temporarily, pending a judicial review.

Kenya’s Nobel Laureate, environmentalist Wangari Maathai, has weighed in, saying no sugar or biofuel is worth messing with the delta.

Project backers say the area - which has a high rate of poverty and illiteracy - needs new investments as the only route to development.

Danson Mungatana, the local member of parliament, captured hopes of transforming the area when he told constituents they would get satellite TV and other modern amenities when the project is up and running.

But will the plans really benefit locals? Should the government go ahead?

How do you strike a balance between development and environmental protection? Is self-sufficiency in sugar, job creation and energy production a good reason for developing wetlands? What do you think?