Inasmuch as Africa deserves the accolade it has been receiving for sustaining remarkable economic growth rates during these economically and financially tumultuous times, many in the region still remain under the grip of chronic poverty and political stability. Though not stated in so many words but the dominant paradigm appears to suggest that foreign aid holds the key to fixing the region for good.
The raging debate over the real worth of foreign aid could not have come at a better time as the curtain is about to fall on the most important global development agenda of the recent times, i.e. the Millennium Development Goals. In this brief note I pinpoint a number of reasons as to why I believe foreign aid is not the panacea for social and economic woes in Africa.
To start with, empirical evidence on the effects of foreign aid on economic growth prospects of countries is at best inconclusive or at worst non-existent. Average income levels in most African states remain little changed from what they were at the time of independence despite massive pouring in of aid to the region over the past several decades. It is institutions not aid that convincingly narrates the recent success stories of such countries as Botswana, Brazil, China and India.
Secondly, foreign aid encourages misalignment of political accountability in recipient countries. It erodes tax effort of governments in Africa thereby further weakening citizens’ right to demand accountability from their political leaders. Save a modicum of piece-meal political reforms, none of the major recipients of foreign aid in Africa managed to conduct free and fair elections for decades.
Thirdly, and related with the above, foreign aid is partly to blame for the rampant rent-seeking behaviour and corruption in Africa. African governments by and large do not have effective public financial control institutions to deal with the large influx of foreign aid. Aid has inflated the opportunity cost of political office in Africa thereby inducing leaders to extend their grip of power indefinitely.
The Ibrahim Prize for Achievement in African Leadership recognises, among other things, those leaders who willingly and constitutionally relinquish power, with a handsome financial reward. Since its establishment in 2007 it only managed to award four former leaders (including an honorary award for Nelson Mandela) in a region that hosts 55 recognised states. Not even the largest annually awarded prize in the world could eclipse the appeal of aid-aided political power.
Fourthly, foreign aid cements the age-old asymmetric relationships between western countries and Africa. From the days when missionaries roamed Africa to pave the way for colonisation to present day brigades of development experts and scholars, many believe that sorting out Africa is their call. Needless to say that Africans have to be portrayed as weak and helpless as possible to fit this mould. Africans can not assume their rightful place in the global community with charitable acts.
Lastly, the present overdependence on the aid model to bring about international development prevents us from concentrating on other truly potent tools of development. For instance, institutional reform gets barely mentioned in development discourse despite overwhelming evidence that lasting improvement on the people’s lives depends on it. The same goes with regard to putting in place fair rules of international trade as well as free movement of labour.