Aid to Africa

Moyo: international aid to Africa spurs corruption

Grace Afsari Mamagani
The Dartmouth
April 2, 2010

Billions of dollars in international financial aid do more harm than good on the African continent, economist and best-selling author Dambisa Moyo said in a lecture to students on Thursday. In the lecture, held in Filene Auditorium, Moyo argued that continued financial aid to African nations allows political leaders to ignore their responsibilities to the population in favor of appeals to potential donors.

The lecture was based on Moyo’s 2009 book “Dead Aid: Why Aid is Not Working and How There is a Better Way For Africa.”

Although world leaders hope to enable African countries to become equal partners on the global stage, the annual influx of $50 billion to African governments instead supports the continent’s dysfunctional infrastructure, Moyo said.

“In the past 50 years, we have seen African poverty rise and growth rates plummet,” she said. “Aid has not done what it was meant to do.”

Popular campaigns that portray Africa as a place of “war, disease, corruption and poverty” encourage government officials in the United States and Europe to continue to provide money to African despots who do not use the funds to improve infrastructure, according to Moyo, who is from Zambia.

“I come from a country where, in the past few years, we have spent a lot of money and time bringing to justice our former president, who stole hundreds of millions,” she said. “We know that aid money is being stolen, but what are we doing about it? Nothing.”

As African political leaders become increasingly dependent upon foreign aid, they attend more closely to their donors than they do to the needs of African citizens, Moyo said.

“[In Africa], the link between the government and the individual has been severed,” she said. “The government is failing at providing public goods, but the international community continues to support these governments.”

Foreign aid encourages unrest ­­— such as the civil wars that took place during the 1990s — as various factions within African countries vie for the government control that grants them access to a stream of money from donor countries and international organizations, Moyo said.

Aid to African countries also fuels “Dutch disease,” in which an abundance of foreign currency forces the local currency to become more expensive, Moyo said. As a result of the expense, African goods become less desirable abroad and employment rates fall.

“We are pushing a policy onto the African continent today that has no evidence anywhere of working,” Moyo said. “When we are giving money to people without any requirement for performance, we can only expect that there will be poor results.”

Alternatives to providing unconditional aid to Africa include establishing international trade, promoting direct investment in African industries through microfinance and encouraging African governments to engage in financial capital markets, Moyo said.

The reduction of tariffs and incorporation of African goods into the global market will both decrease reliance on foreign aid and help to meet the needs of the growing global middle class, she said.

“By 2030, there will be an additional two billion people in the middle class,” Moyo said. “China has only seven percent arable land, while Africa has 80 percent of the untilled arable land that is left on Earth.”

Increasing African governments’ transparency in the capital markets would allow African countries to improve their credit ratings and stimulate foreign investment, she said. By doing so, African countries — which choose bonds in the international capital market over low-interest loans from the World Bank — can improve infrastructure and avoid corruption, she said.

Policymakers in the countries like the United States ignore the argument against foreign aid because voters pressure officials to continue to support African infrastructure, according to Moyo.

“I definitely think that not enough people are talking about the point that she’s trying to make,” said Siyue Liu ’13, who attended the lecture. “This is the first time I’ve heard someone go into so much detail about why aid is hurting Africa, and I felt like she made some pretty valid points that are definitely worth learning more about.”

The lecture was hosted by the Dickey Center for International Understanding.

Read the original story here. [PDF]

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