The Myth of Foreign Aid and Africa’s Development Crises

Disagreements over whether or not foreign aid is responsible for Africa’s slumber are an unending question. But such is not without bias of time, space, situation and affiliations but also depending on whom it might mean sense or nonsense or whatever whoever may chose to call it. With the least of emotions however, foreign aid has not changed the reality of poverty, divestment, political instability and failed economies in not just Africa, but including most countries of the Southern hemisphere. I absolutely disagree with the unfounded prognosis that foreign aid in itself has constituted the main setback to development in Africa.

Rightly in my opinion and in proven scholarship, nations of Africa shot themselves in the legs. You might be able to eat your cake and smell it but you cannot eat your cake and still have it. Aid money in Africa has always been cake for its beneficiaries in spite that it was meant for poverty alleviation, constructive economic development and policy reforms. The question now is how many African nations since the beginning of foreign aid policy, had any of its economies developed with the aid, or had its poverty margin reduced or had in any way invested in constructive policy strategies that can be proudly associated in real terms with development? The answer is absolutely clear - none. I mean none because even countries like South Africa who startled and achieved double digit development in the late nineties, bounced back to business as usual. In fact, all aid money injected into these economies and the poverty alleviation programs for which aid was meant for became converted into poverty aggravation programs.

Without doubt, in no single African country has foreign aid funds been judiciously utilized for its right objective rather a larger percentage of the money got siphoned into private pockets by corrupt public officials and their cronies.

The little that is claimed to have been invested was invested in misguided elephant projects one of the apparent sources through which diversion of funds became common. As a result; most of it got repatriated through capital flight in three main ways.

One, most expertise and technical knowhow needed to facilitate and manage capital projects in Africa were sorted for from the West. This pool of expatriates had their way back to their home countries with huge salaries and allowances which ought to have been reinvested in Africa supposing the expertise for the projects were not sorted for from abroad. Though most often, this policy was based on conditionality placed on aid money by the contracting companies for all capital projects there were not based on coercion. It was sheer absence of a fair negotiation by African aid seekers being that they were not as interested in the best interest of what the funds will do for their nations, as they were in what the funds will serve their personal pockets. By so doing, they allowed a conduit pipe through which the aid got itself trickled out to its very sources of origin – Western donors.

Two, the activities of the Multinational Corporations (MNCs) in Africa were not and have not up till date, gotten a clear line between what the African populace benefits from the return on investment (ROI) and what amount and caliber of profits are allowable for export to the parent countries of the MNCs. Coupled to that, much premium has always been laid on expatriate personnel for the top jobs in these businesses than indigenous personnel. This further widens the conduit pipe for expatriation of capital much of which is aid money. Therefore, from Europe comes aid, and from Europe comes the aid executors and back to Europe goes aid money but from Africa is unending aid interest servicing. The reasons why these could be ridiculous is not because the donor countries in any way imposed aid on its African counterparts or did the donors not mind to strike a win-win deal with their aid recipients but simply because, the recipients completely damn any consequences, they got our whole patrimony entrapped in the hands a few business men in the Paris’ Club and Briton woods.

And thirdly, wealth injected through foreign fell in the hands of corrupt elites. All stolen funds from aid grants never were invested in their home countries. Unfortunately, most of the funds were repatriated to the West and stashed in western banks and investments societies from which no interest yielded from it benefited any African country. Indeed, no value was derived for investment in their home countries; but while in their accounts abroad it created value for the donors who reinvested into Africa again through more foreign aid which got siphoned and stashed in accounts abroad and the vicious circle continued again and over again.

While African countries were busy borrowing money and begging some, the Western tycoons were busy making interest from what they gave as aid and reinvesting it to more enslavement of the former. The irony is that the stupidity of borrowing started in the early sixties. Europe had barely adjusted its economies from the shackles of the world depression and the Second World War. Where did it get so much money to lend to African countries when it was surviving on loans and aid from the United States for reconstruction is the question every sane African should be asking?

To make a rather simple but honest case of the whole paradox of aid and the underdevelopment of Africa, aid was and has always been a means to an end for a few corrupt elites. But the misfortune of our self betrayal is the cause for the mixed feelings about the efficacy of aid. Let me draw an inference to my argument by citing the example of the Asian Tigers, (nations of South East Asia), South Korea for instance, survived on foreign aid before and after the Korean wars. Europe after the Second World War, they invested on government policies that consolidated transparent frameworks, discipline and responsibility. It was not until the early nineties that S. Korea repaid most of the debt it owed the West to be precise the Breton Woods and Paris Club.

Without contradiction, we should not throw hail stones at foreign aid and forget to acknowledge our collective failures. In actual terms, foreign aid is not the problem and foreign aid is not the solution. The laissez-faire and kleptomania of our ruling class is the problem and the contrary could be part of the solutions.

Between 1960 and 2005, debt earned by African countries alone amounted to a triggering 200 billion US Dollars. That is the amount estimated to have reconstructed Europe after the Second World War. It is a myth that foreign aid is responsible for Africa’s development predicament.

Thank you