Africa and Foreign Aid (Fall 2012)

Today African countries are more dependent on foreign aid than they have ever been. Foreign aid is the transfer of goods or services from one country to another directly, or indirectly through international organizations such as the World Bank, the United Nations Children’s Fund, and many others. There are three different types of aid: Military aid, humanitarian aid and ODA ( Official Development Assistance). ODA is the most common aid donated to Africa and it is more powerful economically than the other two. The aid (ODA) that goes to Africa is donated by the G8 countries (the eight nations that account for roughly two-third of the global economy). Foreign aid was introduced during the 50’s in order to create economic growth and promote democracy in African countries. Unfortunately, foreign aid has been more harmful to the African countries’ economies and political systems rather than helpful.

You may be wondering why foreign aid has been harmful to Africa’s economies and its people rather than helpful. Well let us take a look back at Africa before foreign aid and compare it to today’s Africa. Were Africans better off before foreign aid? Have the African economies improved? And have the Africans standard of living enhanced? These are questions we need to answer in order to assess the impact of foreign aid. For the past two decades African countries have received more foreign aid than any other continent yet the number of Africans that live under the poverty line (less than one dollar a day) has increased. For the past 60 years one trillion dollars of foreign aid in the form of ODA (Official development assistance) has gone to Africa, even more astonishingly 400 billion dollars of ODA was transferred to Africa between the years 1970 to 2000 yet Africans are in need of help more than ever(Powell,2005).

Africa before foreign aid wasn't economically strong and their standard of living wasn’t so great, but they were much better off than they are at the moment. In 1970 only 10 percent of Africans lived under extreme poverty with little or no aid going to Africa while today roughly around 75 percent of Africans live under the poverty line of less than one U.S dollar a day (Karabegovic, McMahon, 2006). The amount of foreign aid that goes to Africa increases every year yet the continent has been growing poorer, and not richer.

As we all know or at least people who are familiar with economics understand that there is a simple equation which basically says that investments lead to growth. In Africa here is where the problem kicks in. Africa doesn’t have economic freedom and security in property rights. In order to attract foreign investors or investors in general it’s very essential to have economic freedom and security in property rights. Luck of investment and open trade is a major problem Africa faces in building strong and sufficient economy. Research using Fraser Institute’s Economic Freedom Index recently reported that countries with more economic freedom and security attracted more foreign investors and have higher investment per worker compared to countries that have no or limited economic freedom and security in property rights.(Gwartney, Lawson, Hall,2011).

Foreign aid in Africa discourages investment and entrepreneurship. The economies of most African countries are tied to agriculture and mineral wealth with the exceptions of a few countries such as South Africa, Nigeria, and Angola which rely on oil production. In Western African countries such as Ghana and Senegal, cocoa beans and peanuts are major cash crops while diamond, copper, and gold are found in the Democratic Republic of Congo, Zambia, and other countries. Africa has countless resources to enhancement its economy and improves the standard of living of its people, but that wouldn’t happen unless foreign aid is stopped. For example agricultural aid to Africa harms African farmers who are capable of producing more than enough food for all Africans. It puts them out of business because no one would buy their crop for the right price when the can get free or subsidized food. For example Zambia and Zimbabwe farmers can’t grow grain they receive a large amount of free or subsidized grain from the West. Agriculture is where Africa should be enormously successful but it isn’t because of agricultural aid from America and Western countries. Free or subsidized food from the West undermines the economic viability of farming in Africa. Why should African people depend on African farmers when they can get free or subsidized food? In the Cato Institute study called “The false promise of Gleneagles” the author, Mariam Tupy, shows that agricultural aid is more harmful to Africans than helpful. Organization for economic cooperation and development estimate that western agricultural aid to Africa totals $365 billion in 2007. (Tupy, 2009)

Cutting agricultural subsidies will encourage African farmers to produce a large scale of crops in order to satisfy the needs of all African, and sell their crops for the right price. Large scale farming will create industries which will employ a large number of people. When people have jobs, they will spend the money they earn from their work, and as a result of that the economy will grow. Nigeria has enormous land resources, a favorable climate zone, and fertile soil to produce enough food for itself and for the rest of Africa. Nigeria mostly produces rice, but it exports 60 percent its productions because subsidized or free rice that Nigeria receives from Western countries. Industry is still in its early stages in most African countries and Agriculture industry is where Africa should be enormously successful but that wouldn’t happen unless agricultural aid is cut off from Africa.

Not does Aid agricultural only harm the economy but it also harms the health of the African people. The food donated by the United States and the western countries are genetically modified food which very harmful to their health. In 2002 the UN’s world food program gave thousands of tons of genetically modified food donated by G8 countries to aid the Zambians that were hit by serve drought but instead of the food saving the starving people it killed more than it saved. Why shouldn’t Africa eat genetically modified food which isn’t good neither for their health nor for their economy?

Another problem foreign aid creates in Africa is dictatorship. Do ever wonder why African presidents last more than 20 years or so regardless of whether the government holds official election or not? if not you should take a look on how foreign aid effects African politics and encourages dictatorship. Foreign aid encourages dictatorship and help dictators stay on power for a very long time. At least thirteen African sitting leaders dominated or continue to govern their struggling nations for more than two decades. Example of such leaders Robert Mugabe who has led Zimbabwe for over three decades or Omar al Bashir of Sudan in power in since 1989 who is wanted by the International Criminal Court for crimes against humanity. A classic Example of how aid helps dictators stay in power is U.S Aid to Egypt. U.S has given Egypt tens of thousands of Billions in Aid for over thirty years. During these thirty years Mubarak( former Egypt President) used this money to stay in power. This money help Mubarak build one of the strongest armies in that region and oppress his people.

Aid encourages African governments to behave badly and shy away from their responsibility which is improving the wellbeing of their people. In America or other western countries, politicians and government are held responsible because they are elected by the people and their citizens pay taxes which are very essential to the existence of their government. Taxes are everyday expenses of life that allow your local state or government to provide or pay for important services such as police, firefighters, public schools, and libraries . As we all know In America and other developed countries such as England and Italy there is no taxation without representation, but unfortunately in Africa there is no such thing. In Africa, there are few countries that hold elections which are fair but the rest of the countries are led by dictators who don’t hold elections and even if they do it won’t be fair. Like Robert Mugabe’s 2008 election “The election in Zimbabwe in March and June of 2008 between the ruling Zimbabwe Africa National Union and the opposition Movement for Democratic change reaffirmed a commonly held view that political succession in Africa is an imperfect process” (Bamfo, Mugabe’s 2008 reelection). This dictators use the foreign aid money to enforce law and order and oppress whoever is against them. Their government doesn’t depend on taxes and as result of that their citizens have no influence on the politicians that represent them. Without Foreign aid these dictators wouldn’t last one day because they wouldn’t have the means to build an army that they use in order to stay on power and oppress their people.

Last but not least aid even if aid is helpful it should be temporary and not permanent. After almost forty years of existence Foreign aid has become something of permanent. Even more worsening is that some African countries foreign aid has become a considerable force in the national economy, forcing those countries to become completely dependent on foreign aid. A study done by Andrew Mwenda who is the political editor of the daily Monitor, Ugandan Newspaper reported that 50 percent of the Ugandan budget comes from foreign aid and the government spends 11 percent of its budget on the military and about 20 percent or $40 million dollars of its budget is lost to corruption.(Mwenda, Foreign Aid and the weakening of Democracy Accountability In Uganda). Africa has to plan for the longer and not the near future because it just can’t depend on foreign aid forever. In order this to happen foreign aid has to be cut from Africa if not they should at least set a time limit on foreign aid.

Foreign aid is also harmful to the countries that donate. At moment there is economic crisis though the global and some of the donors can’t afford to donate while their own people are severing; the wellbeing of their people comes first. Here in the United States millions of people are jobless and the unemployment rate is higher than ever, higher than during the great depression. I think it’s very ridiculous to donate billions of money to other countries when families here in the United States are becoming homeless, losing their houses to credit loan companies.

If American and the western countries truly mean what they say and they want to help the continent of Africa and it is people they should stop the idea of foreign aid which creates more problems than it solves. It is also demining to the Africa people and sends out the wrong idea to world which is Africans are not capable of doing something for themselves and are dependent on other. The ideal way to solve Africa’s economic, military, social problems would be the path taken by the Chinese toward Africa. They see Africa as business pertness rather than people that need their help. For example in order to satisfying its growing industries China received 3 billion in discount to mine copper and cobalt in Congo in return a state owned Chinese railroad build 32 hospitals, 145 health center and two universities in Congo an investment of 6 billion (China’s New Focus on Africa by Alex parry).

After almost forty years of existence foreign aid in Africa has been more harmful than helpful in improving the standard of living of Africans and encourages democratic state rather than dictatorship and corruptions. Africa is more in need today and live in extreme poverty which threatens their existence than they were 40 years ago before any type of foreign aid existed. Foreign aid doesn’t help anyone; it is harmful to the donor and the recipient and because of that foreign aid should be cut off from Africa. Foreign aid has been judged by its intentions and not its outcomes and unless we do that we wouldn’t understand why foreign aid is harmful to Africa rather than useful.

1. Tupy, Marian. "Free Trade Would Help Africa." Free Trade Would Help Africa 557 (2055): 1-5. Web. 21 Feb. 2012. Journal Article
2. Powell, Benjamin. "Africa Needs Invesment, Not Aid." Africa Needs Invesment, Not Aid (2005): 1-4. Web. 16 Feb. 2012. Journal Article.
3. Bamfo, Ph.D., Napoleon. "Mugabe’s 2008 Reelection Victory: Issues and Debate." African and Asian Studies 9.1 (2010): 105-27. Print.
4. Mwenda, Andrew. "Foreign Aid and the Weakening of." Foreign Aid and the Weakening of Democratic Accountability in Uganda | Andrew Mwenda | Cato Institute: Foreign Policy Briefing. CATO INSTITUTE, 12 July 2006. Web. 18 Nov. 2012.
5. Tupy, Marian. "The False Promise of Gleneagles: | Marian L. Tupy | Cato Institute: Development Policy Analysis." The False Promise of Gleneagles: | Marian L. Tupy | Cato Institute: Development Policy Analysis. Washington, DC : Cato Institute, Center for Global Liberty and Prosperit, n.d. Web. 20 Nov. 2012.
6. Mcmhon, Karabagovic. Economic Freedom of the World. Digital image. Fraser Institute, 7 Sept. 2006. Web. 5 Nov. 2012.
7. Perry, Alex. "China's New Focus on A'frica." TIIME In PARTNERSHIP WITH CNN, 24 June 2010. Web. 1 Dec. 2012