Aid is situational support supplied to a community to elevate it out of poverty or hardship. As a result, it quickly emerged as a viable strategy for combating underdevelopment. Unfortunately, while it can, for obvious reasons, increase a country’s growth under specific conditions, it has almost little effect on African states.
The reasons are rooted in basic economics, and to comprehend them, it is crucial to remember that aid, regardless of its aims, beneficiary requirements, and donor intentions, is driven by various incentives that act as polarities around which interventions are articulated. But what exactly is aid for development and how does it work?
According to the Hachette Encyclopedic Dictionary, development aid is defined as the transfer of resources (loans, investments, donations) between two countries, in this case, from a developed country to Africa.
First, let’s talk about loans. The system is configured in such a way that the International Monetary Fund (IMF), the World Bank, and other lenders provide African countries with loans since they lack the necessary funds for their development. As soon as the funding is received, Africa finds that it lacks the national firms and individuals needed to carry out development initiatives.
Thus, foreign firms and experts are employed. The money used to pay for the extravagant salaries and services rendered eventually returns to the West. But reimbursement is required. Africa must then borrow money again to pay down the debt and frequently the accruing interest. If the project proves to be a white elephant (one that doesn’t bring in enough money for repayment) and the kleptocratic governing class diverts some of the loan money, the issue is much more complicated.
Now let’s discuss investments. The best return on investment is something that every investor aspires to. Perhaps there is nothing fundamentally wrong with that. However, in Africa, investments are frequently made in fields that do not raise the average living level of the population. They concentrate on the manufacture of products that are unrelated to the life of the people and on extractive enterprises. These investments all try to increase profits as quickly as possible. The developed nations receive the profits. Multinational firms frequently avoid paying enough taxes in cooperation with the ignorant ruling elite. The fact that foreign investments have only made Africa poorer is hardly shocking.
Lastly, let’s talk about donations. This is where the problem arises with great urgency.
Does foreign aid truly benefit Africa? In my book, I explained that while the total amount of foreign aid received by African countries is, on average, $48 billion, each year, approximately $200 billion goes out of Africa in the form of profits to multinational companies or in the form of illicit financial flow.
Likewise, in “Dead Aid: Why Aid Is Not Working and How There Is a Better Way for Africa,” the author and Zambian economist Dambisa Moyo stated emphatically “No.” to the question, “Does foreign aid truly benefit Africa?” She claimed that more than $1 trillion in aid has been given to Africa since the end of World War II. Where are the outcomes? Poverty is all we ever witness. Why is that?
The answer is rather simple. This is because the corrupted political class in Africa, the tens of thousands of parasitic national and international bureaucrats, and the countless complicit consultants have turned foreign aid into a lucrative industry.
The money is swallowed up by salaries, housing and protection for expatriates, fleets of 4×4 vehicles, per diems paid to local officials for their participation in missions, workshops, seminars and other wasteful expenses. Even ministers demand per diems before laying the first brick or inaugurating a so-called “development project.”
Why does this situation persist?
Donors don’t put restrictions on how this money is used. As a result, the beneficiaries can easily spend the money without being held accountable. The best civil servants from local governments are also taken away by development aid since they are hired to oversee projects by United Nations agencies and other donors. Additionally, there is a mad rush to establish NGOs to benefit from this international bonanza. The political class in Africa is likewise encouraged to be careless with development funding. Why bother establishing public policies and improving public finances when the international community always comes to your rescue?
According to Moyo, hardly a single nation has used aid to significantly reduce poverty and advance economic progress. This is valid because aid fosters an unhealthily high reliance on outside help rather than catalyzing economic growth.
In other words, one can argue that development aid in Africa as it is carried out is a disaster because it reinforces corruption and keeps the continent under the domination of donor countries. In my book “Africa in the Perspective of an African,” originally published in Turkish as “Bir Afrikalı gözünden Afrika,” I challenge the prevalent and misleading beliefs about Africa’s poverty and underdevelopment. – DS
