Less not More Aid to Africa?

Regardless of the feasibility of her suggestions, Dambisa Moyo, a former World Bank Consultant and author of “Dead Aid” is at least bucking the system somewhat and proposing a new direction for Africa. In her book Ms. Moyo reveals some pretty shocking statistics:

  • More than 300 million people are still mired in poverty after decades of international aid.
  • In 1960 GDP for Africa as a whole was equal to that of East Asia – by 2005 East Asia’s GDP was five times higher.
  • Over the past 30 years the most aid-dependent countries in Africa have suffered an economic contraction of 0.2% per year.
  • Total aid to Africa over the past 50 years exceeds $1 trillion.

The problem is dependency, argues Ms. Moyo, which in turn provides little incentive to develop sustainable country-specific growth models. The aid spigot is a rushing river that signals to many African countries, “Hey, no matter what happens, we’ll still be pouring money in no matter what.” The “business of aid” employs 500,000 worldwide and once Bono and countless other celebrities jump in compassionate pleas for additional financial support typically result in the blind issuing checks to the blind.

The most controversial argument in Moyo’s book is her belief that democracy is not the key to solving Africa’s problems. Rather, she posits a “benevolent dictator” who can push forth reforms might be better suited for many African countries at the moment. My rolodex of “benevolent dictators” is full of cobwebs so maybe you all could offer someone up.

Nevertheless, I like Ms. Moyo’s challenge, and her focus on economic growth being the prerequisite for democracy rather than the other way around has some legs. A long-term focus on the creation of bond markets (in the past 10 years 43 developing nations have issued international bonds and only three were from Africa) is an excellent suggestion.

More than anything this is a lesson in incentives. The continent is accustomed to aid and this is not good. Ms. Moyo references Botswana and South Africa as two shining stars that have prospered by not allowing themselves to be dependent on aid, but I’d argue the correlation of less aid to their respective development paths is far from clear.

All of this leads to hard decisions that will not be viewed as compassionate. Yet, where do we realistically go from here? Am I a bad person if I don’t give to Bono? Does anyone with any significant political, economic, or social clout want to lead the charge for less not more?

4 Comments

Filed under Pole to Pole Development Posts

4 responses to “Less not More Aid to Africa?

  1. I recently read Ms. Moyo’s article in the Wall Street Journal which makes some great points. The main point that I took away from the article is that anyone, including governments, that becomes dependent on financial support will find it more and more difficult to stand on their own. The fundamental concept of aid is noble, however, when you factor in the human element the concept is obviously flawed. We can see examples of aid in the US (welfare) and if we look closely we will see a broken system at best. Again the concept is good but people become dependent on it. Teach a man to fish, don’t give a man a fish. Giving a man a fish is nice but he eats only for a meal. Teach him how to fish and he eats forever.

    I am involved with a start-up organization called Engage Foundation. Our concept is to come into partnership with organizations in Africa to learn with them the best practices involved in developing sustainable programs to help the under-privileged. We intentionally don’t ‘teach’ them because we are certain that the American way to do things is not always the appropriate way in Africa. This speaks to Ms. Moyo’s call for a benevolent dictator. Democracy may not be right for most countries and it is very hard for Americans and the rest of the world to realize that there may be more than one right was to solve a problem.

  2. Thanks, Will. I’d be interested in learning more about the Engage Foundation. Please email me at poletopoleconsulting@gmail.com

    The “benevolent dictator” statement was perhaps not the best phrase Moyo could have used, but yes, similar to the war on drugs, we need to be asking tough questions, and perhaps questions that were considered unapproachable decades ago.

  3. I have not read the article by Moyo yet, but the excerpts provided suffice to add my raw comments to the discussion.

    There are many facets to the African Development problems, but I don’t think that neither democracy nor dictatorship is the key to solving them. What is needed for sub-Sahara Africa in general, are education, economic development and a sense of patriotism. We need to reinvent poverty relief and move away from relieving poverty within poverty, and start working toward relieving poverty for sustainability.

    (1) Education: Building schools with durable material and providing school supplies and educational material for rural schools and students. Education is the key capacity building tool for sustainable rural development in Africa.

    (2) Economic Development: Again at the rural level, there will be no meaningful development without Energy Supply, Improved Infrastructure and Clean Water. Instead of supplying portable generators for individual facilities in a given community, why not implement wind or solar energy systems to supply energy for the entire village or group of villages. Also, instead of individual water holes to provide water for sections of villages, why not implement a contemporary water system for an entire village or group of adjacent villages that are no more than 4 to 6 Km apart? Lastly but not the least, building permanent roads will remove the village isolation and foster its economic development.

    (3) Patriotism: Whether it is a democratically elected leadership or a dictatorship, a clear sense of patriotism is needed in order to get things moving in many parts of Africa. Things like protecting the environment, implementing development programs where they are needed but not necessarily where we want them, and fiscal responsibility, all come with the love of one’s country and through education.

    I equally would be interested in learning more about the Engage Foundation.

    • Thank you for your insight, Titki. Two items in your retort stand out: Implementing alternative energy and patriotism. Solar and wind energy with a mix of government tax credits would solve overly burdensome start-up costs and benefit the environment and larger community. Patriotism, although harder to engender, is absolutely key. There needs to be internal change before any aid can help.

      Looking forward to corresponding in the future. Please keep me posted in developments with Barnkoh.
      Peter

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