“The hand that gives is always on top”
When the British Prime Minister, David Cameron, at the end of Commonwealth leader’ summit in Perth, Australia, in 2011,boldly announced that Britain was considering cutting its budget support aid to countries that deny gay and lesbian rights,not many African leaders took him seriously. The usual response was to tell him to go to hell with his aid.Cameron however, was not speaking only for the United Kingdom. He was speaking for the Western world. Later that year, President Obama announced a presidential directive to use U.S. foreign aid to promote rights for gays and lesbians abroad, including combating attempts by foreign governments to criminalize homosexuality and making treatment of gays a factor in awarding foreign aid.
Despites the threats and pressures, countries like Nigeria and Uganda went ahead and passed various versions of the anti-gay bill into law. Unable to intimidate Nigeria because of its vast oil resources, all hell has been let loose on Uganda, an aid-dependent country. Hardly was the law signed than three countries: The Netherlands, Norway, and Denmark, announced the suspension of budget support aid to Uganda. The United States also said it will review its relations with (read suspend aid to) Uganda while the World Bank suspended or postponed a $90 million loan to Uganda’s health care system. If Nigeria could afford to call the bluff of the West, why would a major aid-dependent country like Uganda do the same? Was Museveni emboldened by the recent discovery of oil and the massive revenues that will follow as from 2016, or has he, being the West’s man-Friday in East and Central Africa, developed another fool-proof strategy to keep the West in need of his services no matter what? Only the future can tell.
But despite the present bravado of African leaders, it is still difficult to imagine a good number of African countries surviving without foreign/Western aid.Anyone conversant with the economic history of Africa knows that most African states are technically failed states that cannot perform the normal functions of a state without external support. Such states remain states only in the juridical sense, being propped up, as it were, by the international community. Current figures suggest that roughly $50 billion of international assistance comes to Africa each year. Figures from the World Bank also show that in African countries of Burkina Faso, Rwanda, Somalia, Mali, Chad, Mauritania and Sierra Leone from 1970 to 2002, over 70% of total government spending came from foreign aid. By 2009, foreign aid still account for between 50% and 92% of overall government spending of the following countries: Sierra Leone, Liberia, Guinea-Bissau, Rwanda, Gambia, Burundi, Mozambique, Central African Republic, Uganda, Congo DR, Ethiopia, Tanzania & Burkina Faso. Clearly then, withdrawal of foreign aid to some African states will suddenly lead to government, if not state, collapse.
However, as critical as aid is to state survival in Africa, it is the most disastrous thing to have happened to the continent. It has not only destroyed industries and trade, but it has also fuelled corruption, encouraged government irresponsibility, and undermined efforts to develop a strong taxation system without which no country can truly claim to be developed or self-sustaining. What is more, it has undermined democracy by making African governments accountable to donor countries and agencies rather than to their own people. This is besides the obvious fact that aid donors usually impose their own ideas of development on receiving societies often based on their own priorities and vision.
By its very nature, foreign aid is an instrument for promoting the donor country’s economic and foreign interests. It may benefit the receiver, but the benefit to the giver is real and indubitable. It was first used on a large scale by the US after World War II to help rebuild the economies of Western Europe and to help contain the Soviet expansion in the aftermath of World War II. An unstated reason was also the desire of the U.S. policy makers to ensure a Europe that would provide a buoyant market for American exports. President Truman had earlier warned that “without a new aid programme there would be sharp drop in American export”. President Kennedy, in responding to criticisms over his administration’s emphasis on foreign aid said “I wish American businessmen who keep talking against the [foreign aid] programme would realise how significant it has been in assisting them to get into markets where they would have no entry and no experience and which has traditionally been European…”Paul GrayHooffman, the great American aid administrator, once admitted to the fabulous benefits of foreign aids in an article in fortune Magazine;
Doesn’t it badly distort reality to call something that creates large numbers of jobs for American workers “foreign aid”? Are actions that greatly increase our export earnings “foreign aid”? Is it “foreign aid” when we help to secure for ourselves new sources of essential raw materials? Is it “foreign aid” when we follow a course that could eventually lower the cost of goods and services Americans need every day?
African countries were constrained by the international division of labour to specialise only in the production of raw materials while they import finished and mechanised goods from the West. However, shortly after independence, the prices of primary products/raw materials collapsed in the international market due partly to the development of synthetic substitutes while the prices of its imports (mechanised/manufactured goods) kept increasing by the day. Expectedly, the centre could no longer hold and the economies and public finances of most African states collapsed. With no alternative sources of income and with economies and a population that depends almost exclusively on state funding, most African states had to approach the International Financial Institutions for loans and assistance. This opened the way for aid inflow into Africa with the attendant huge debt burdens and malfunctioning economies that depends on imports for survival.
In her book Dead Aid, the Zambian Economist,DambisaMoyo, gave a compelling account of how aid is hurting Africa and promoting corruption in government. For her, what may even appear as a benign intervention on the surface can have damning consequences.With a simple example of a mosquito-net manufacturer (who is put out of business by foreign supply of free mosquito-nets), she describes how aid kills African local industries and encourages government abdication of responsibility. A former Nigerian Information Minister in 2007, Frank Nweke Jr.,once narrated a ridiculous aid proposal Nigeria once received where equipment, consultants and contractors for the projects were all to be procured from the donor country. This is standard practice among aid donors. Recent figures from the OECD have shown that a great chunk of aid budgets gets spent in donor countries and not in the countries they were meant for. A shocked Guardian Newspaper of the UK recently listed some items the British government spent overseas aids budgets on in the UK to include: global citizenship lessons in Scotland, campaigns to boost public support for UK overseas development, education and immigration services, payment of pensions to former colonial officials, and salaries and other costs of experts and consultants.
That is not all. Aid funds, when they do reach the recipient countries, provide quick avenues for corruption. From Congo DR, to Zambia, to Malawi, to Nigeria, government officials brazenly steal aid funds without fear of repercussion. Mobuto SeseSeko was estimated to have stolen $5 billion. Malawi’s former President BakiliMuluzi was charged with embezzling aid money worth $12 million, while in 2011, aid donors raised alarm over the mismanagement or total embezzlement of about $45 million (N72.9 billion) given to Nigeria over a period of seven years for the control of HIV/Aids, tuberculosis and malaria.
Perhaps it is time African leaders begin to emphasise ‘trade not aid’ as a more acceptable solution to their economic woes. Trade, by its nature, generates growth and is the fastest and most effective way to lift people out of poverty. And they may not need to convince the West, East or Asia of this. They can start amongst themselves. Today, inter-African trade, at just 12% is the lowest in the world. In comparison, inter-European and inter-Asian trade stands at 60% while inter-American trade stands at 40%. This will certainly reduce Africa’s over-dependence on Western aid and consequently, the West’s unwieldy influence on the continent.
Christopher Akor is a member of BusinessDay Editorial Board.
