First year IR & Economics student Sarah Njenga reviews Dambisa Moyo’s book “Dead Aid: The Answer to Africa’s Aid Dependency“.
Since the wave of post-colonialism and new-found independence spread throughout Asia and Africa during the 1960s, Eastern nations have faced the massive change of shifting to more politically liberal methods of governance, as well as competing against a developed Western economy through increased privatisation and globalisation.
Despite it being around 50 years since the beginning of the independence era, many Eastern countries, particularly in Sub-Saharan Africa, are still crippled with rising absolute poverty rates. The United Nations Industrial Development Organisation (UNIDO) reports that those living in poverty within the region has risen from 42% to 47% between the years 1981 to 2001, despite absolute poverty dropping from 40% to 21% in the world as a whole.
Evidently, this has raised alarm bells in the minds of many politicians, policy makers and altruistic celebrities who all have made attempts to put a halt to this dangerous epidemic. It doesn’t take more than turning on your television sets to view the tear-jerking advertisements showing a young African child in despair, followed by a persuasive plea to give money so more aid is available to help them. Nonetheless, despite the many pleas, Live8-style concerts, and even government commitments from developed nations to use 0.7% of their annual GDP for aid-related efforts, poverty still exists. Not only this, but corruption still dominates many African governments, and economic growth is still stagnant or regressive. With time running out and options few, the question still remains – what else can we do to help?
This is the part where I would previously have cut in and enthusiastically introduced a new idea for a NGO, or present a utopian ‘social phenomenon’, where we can raise enough money to give every person in Africa a home and free education- but I’m not going to do that. In fact this time, I am going suggest the total opposite. I suggest a halt to aid flows in Africa. For good.
Now I know what you’re probably thinking: ‘if we stop aid in Africa, poverty will surely increase even further!’, and you’re not foolish to think so, for I thought the same thing. Well, that is until I read ‘Dead Aid’ by Dambisa Moyo. Born and bred in Zambia, Moyo has witnessed the crippling effects of aid in her own country whilst growing up. Not only this, but with a Masters and Doctorate degree from both Harvard and Oxford respectively, work experience as a consultant at Goldman Sachs and the World Bank, and even praise from Kofi Annan for her insightful observations, she’s definitely a voice worth listening to on this matter.
At the Carnegie Council discussion with Joanne Myers in 2009 shortly after ‘Dead Aid’ was published, she mentioned that;
‘It has been 60 years, $1 trillion of aid to my continent, and it is rather disturbing to see things go in the wrong direction. It is not uncommon for me to at least have somebody try and rob me on the streets. With over 60 percent of the population in Africa under the age of 24, in many countries over 50 percent of the population is under the age of 15, this is a time bomb waiting to go off.’
Fundamentally, her main argument on the aid issue is that it simply has no beneficial long term effects in developing countries. In fact, it causes regressive economic effects for many reasons which she describes as ‘geographical, historical, cultural, tribal and institutional’. Additionally she puts it down to the fact that African nations have simply become comfortable with aid, so much so that they have no incentive to seek alternatives.
Luckily for them, she highlights many plausible alternatives in this book. For example, Governments could find the monies for development through issuing bonds which yield high returns on investment by lenders. This has been a ‘capital solution’ that has helped hoist Brazil and Argentina up the ladder of economic success to become the strong nations they are today. In order to attract investment, desirable credit ratings are needed, which can be difficult to get for a country with potential high risks. Yet she maintains that any rating from a renowned rating agency, will help investors to have more confidence in the government they are lending to, so the opportunity to show reliability and credibility is also as significant as the funds used to bring development. Countries such as Ghana and the Gabonese Republic are already putting such methods into practice by issuing a US$750 million and $1 Billion ten year bond respectively in 2007, and as a result corruption is slowly dropping, and GDP’s are rising; proof that it’s showing positive results.
When closing the Carnegie Council discussion with Joanne Myers in 2009, she leaves the audience with a very thoughtful point;
‘An African friend of mine said to me, “Dambisa, why are you bothering? Why have you bothered to write this book?” Before I could answer, he said, “Africa is to development what Mars is to NASA. Spend billions of dollars researching and analysing and visiting and writing reports, but nobody really believes he will ever, ever live on Mars and nobody really believes that Africa will ever develop.”
To know that the World is slowly losing hope on Africa was a heart-breaking concept. However, this book has restored the excitement and refreshing hope in me and many others towards the idea of Africa’s development being sustained, and more importantly irreversible.
Do I believe that Aid is ultimately a failure? No. But I do agree with Moyo that some Western ideologies are simply not compatible in an Eastern context, and instead should be replaced with polices that cater to the needs of those countries to bring an end to aid-dependency once and for all.
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Do you agree that Africa is too dependent upon aid? Or is the view put forward by Moyo misinformed? Let us know what you think by commenting below.
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