Aid to Africa

Why foreign aid to Zimbabwe won’t work

(November 5, 2013) A Zimbabwe-based newspaper says greater accountability and transparency will help the country’s struggling economy, not foreign aid. 

By Brady Yauch

More foreign aid for Zimbabwe is not the answer. That’s the message from a recent editorial in the Zimbabwean The Standard admonishing the Finance Minister, Chinamasa for his visit to the United States to “beg” for money from the Bretton Woods institutions, the World Bank and the IMF.

The paper argues that foreign aid on its own, “devoid of accountable and transparent governance is a recipe for disaster” and will fail to “generate wealth and bring about development.”

Zimbabwe already has a history of money lost to corruption or mismanagement, says the paper. It cites one report that estimates $2 billion (US) in diamond revenues have been unaccounted for since 2008. And a former Finance Minister admitted that the Treasury was expecting $600 million from the proceeds of diamond exports in 2012, but only received $41 million.

Pouring more aid money into a government that is already unaccountable would fail to provide a sustainable or equitable economic boost. What is needed, instead, is a government that uses the revenue from its mining and other businesses in an accountable manner, says The Standard.

“It is the culture of accountability and transparency above anything else that ensures that society benefits from the wealth tapped from the soil,” the paper writes.

The paper also castigates long-time president Robert Mugabe for creating uncertainty in property rights – a situation that has scared away much-needed foreign investors.

“Who would want to invest in such a volatile and turbulent market in which property rights are not respected?” the paper rightly asks. “It is progressive and informed policies pursued by governments that generate wealth which empowers people and not aid from the Bretton Woods institutions.”

Read the full article here.

Brady Yauch is an economist and the executive director of the Consumer Policy Institute.

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