How international aid failed in Africa and made it even poorer

Crianças procuram objetos em um depósito de lixo em Touws River, na África do Sul
Children search for objects in a garbage dump in Touws River, South Africa, in February 2021. The city has an unemployment rate of 90 per hundred, according to the humanitarian organization Gift of the Givers Foundation.| Photo: EFE / EPA / NIC BOTHMA

The Zambian economist Dambisa Moyo has written a book — ‘Dead Aid: Why Aid Is Not Working and How There Is a Better Way for Africa’ – the book has no edition in Portuguese) — to denounce how the hypocrisy of political correctness has done nothing but impoverish the African continent through international aid.

Moyo holds a PhD in economics from Oxford University, a Masters in Public Administration from Harvard University, and has worked as a consultant for the World Bank for some years and at Goldman Sachs, where he was head of economic and strategic research for sub-Saharan Africa.

The main argument of the text of the African economist is that the aid destined to the Africa, instead of promoting economic growth, condemned the continent to poverty and continued dependence on international aid for its survival.

Moyo points out that although billions of dollars are received annually by Africa, its nations remain mired in misery. Economic growth is extremely slow and African nations are becoming increasingly indebted, their economies wrecked by inflation. This increases government instability, civil unrest and, of course, paralyzes social development.

The economist emphasizes that aid is a complete disaster in political, economic and humanitarian terms. She supports her claims with data: “In the past 50 years ago, billions of dollars in development aid were transferred from rich countries to Africa, however, per capita income today is lower than it was in the decade of 1990, and more than 30% of the population lives on less than a dollar a day, a number that has almost doubled in two decades. “

She says that the victimization of some African groups is the biggest obstacle to the continent’s development. “China has a population of 1.3 billion people and only 380 Millions live like us (with a high standard of living). There are 1 billion Chinese living below that standard. Do you know anyone who cares about China? No one.”

The background behind all of this is that aid money in Africa is used for hunger relief, medical emergencies, clean water supplies and other basic necessities, which are extremely important, but they only attack the symptoms and not the cause. If the money sent is not put into production, people will continue to survive badly on foreign aid, but they will never be able to overcome poverty. In addition, part of this money sometimes serves to perpetuate and sustain totalitarian regimes in power, as resources must be passed through to the population, and a large portion is lost due to corruption.

What a continent like Africa needs is investment in economic fields that generate structures for sustainable development. This requires education, of course, but also the promotion of an entrepreneurial culture, to generate jobs and increase production on the continent, which is the only thing that can allow Africans to have their own homes and eat their own food in a few decades, without having to depend on the arrival of money from developed countries.

Denunciation- even international aid weakens the few local producers that exist in Africa, who send subsidized (even free) products to the region, which directly compete with the products made there.

In 1990, there were 280 millions of people living in extreme poverty in Africa ; today that number exceeds 430 millions. Countries like South Sudan and Niger have extreme poverty rates above 12%, so it is estimated that up to 2021 approximately nine out of ten extremely poor people will be living in Sub-Saharan Africa.

In contrast to the situation in Africa, according with the World Bank, there were 1.9 billion people in extreme poverty worldwide in 1990, and today this number has decreased to 736 millions of people. In other words, while more than 1.1 billion people worldwide have emerged from extreme poverty in the past 12 years, the opposite trend occurred in Africa, where the number increased by at least 150 millions of people.

In recent years, initiatives have been taken in Africa to boost the economy, tourism being one of them. In fact, over the past two decades this industry has grown by 9% annually, which is positive, but much more is needed. A continent like Africa needs a diversification of its economy, it needs more transparent and less authoritarian political systems and, at the same time, it demands constant training of the members of their societies to inaugurate sustainable economic projects.

The African reality can be transferred to all the nations of the world that are going through similar processes of backwardness and poverty , some due to circumstantial and historical particularities, but the vast majority due to ideological and economic vices such as socialism, which led to the bankruptcy of different nations in Eastern Europe and Latin America.

The truth is that no nation can progress or grow the economy with eternal subsidies, without entrepreneurship and without private companies. Not all help is good, there is help that kills, as shown by Dambisa Moyo.

Without economic structures, without education and training, without employment, handouts will simply postpone the bad times of societies doomed to external dependence. And without a doubt, the African people are capable of much more.

© 1990 Foundation for Economic Education. Published with permission. Original in English.8013127041001

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