The camera swings from a shot of desolate baron land and pans in on a pot-bellied skeleton of a human being. The flies hang like a childrens mobile around the face of this barely human corpse. Dramatic music feeds into the baritone voice of a major celebrity appealing for just £1 a month to ensure that this empty hub of a human can eat for one more day. These scenes are all too familiar in adverts spangled across our television screens whilst we comfortably sit in our sofas drinking our warm beverages. It seems now that Africa is worse off than ever. However, the framing of this scenario is inaccurate.
Over the last 50 years the amount of aid given to Africa has been ever increasing. It is estimated that between 1960 and 2003 the total amount of aid given to Africa alone surmounted to US $600 Billion. The average African country receives 13-15% of its National GDP in foreign aid. This is a mind blowing transfer of resources from Rich to Poor countries - surely enough to establish Institutional frameworks and policies for wealth creation in a continent richer in mineral resources than any other continent. But Africa remains poverty stricken. The fundamental questions that need to be asked are how is the foreign aid being distributed and where is it going to.
The Ghanaian economist George Ayittey asked a good question at a 2007 convention in Arusha, Tanzania. He advised that from 1960 to 2007 there had been 204 African heads of states. Off the back of this he asked for 20 successful leaders (in terms of economic reforms etc.). Only 15 were named including the likes of Nelson Mandela and Jomo Kenyata. Even if 20 had been named that would only have been 10% of leaders that people had faith in. A concerning statistic for individuals who run a country. Ayittey carried on to say that the begging bowl of Africa leaks out US$ 148 Billion a year in corruption through these Governmental institutions. He points out that many African governments are benefitting from the rotten status quo.
Corruption isn’t the only issue. The western media lambast our screens with tales of despair and desperation. This is true to a degree but these same media companies rarely share the success stories which account for the majority of reportable news - despair and desperation only accounts for a minor section of Africa. Out of 53 Nations there is civil war in 9. It is understandable that reporting on civil wars sells papers, but Africa shouldn’t be seen as a single country tarred with the same brush. The media needs to reframe that there are fundamental issues in certain parts of Africa, but there is also a wealth of opportunities.
In the 1970’s not only did Africa feed itself, but it exported too. Nigeria was the largest palm oil producer in the world. That was until Malaysia studied the methods used by the Nigerians, set up institutional frameworks and cornered the market. Nigerian palm oil production has petered out in comparison to its previous high output. With the increase in aid it appeared that many African nations focused less on self-sufficiency and more on foreign donors. Under the Lomé Convention signed in 1976 the European Union gave African countries the opportunity to export goods to the European market duty free. None of the African beef producing nations, not even Africas most successful country Botswana, have met their quota. The visionary Ugandan journalist Andrew Mwenda explains that in 2007, albeit having a quota of 50,000 metric tons, Uganda hadn’t exported any sugar but instead imported 50,000 metric tons from Brazil and Cuba. It is a wonder why such lucrative opportunities are being passed up.
The issue comes from the way that many aid organisations are targeting Africa. They need to focus on building and working with better institutional frameworks and help to drive pro-active policy frameworks with governments. Many of the governments don’t understand meritorious systems and as a result of being so reliant on aid agencies, such as the IMF, they have disenfranchised their own citizens by fazing them out. The fundamental issue is that the productive margin in these governments search for revenue lies with international donors and not the domestic economy. Aid agencies should look to work with entrepreneurs at grass root levels and plant the seeds of wealth creation. By working with African governments western agencies can advise on creating wealth from their own people driven by self-interest. Having synergy with those who create wealth will allow the establishment of institutions and policies specific to expanding the scale and scope of organisations from which they can collect tax revenues.
Aid is very noble and considerably beneficial to many. However it seems that many agencies have had a successful campaign and applied the same framework across the board without taking into consideration the cultural implications. Redistributing contributions from government to local businesses as well as a required break-down of cost flows may help to reduce corruption and evenly distribute the wealth. It is imperative for agencies to work with or encourage governments to set up feasible institutional and policy frameworks directed at increasing scope and scale of businesses. Agencies also need to encourage Africans to reinvest in Africa. According to the World Bank 40% of the wealth created in Africa isn’t invested in Africa. Applying these policies should help to spur on entrepreneurial self-initiative and foreign investment – creating jobs. Many of these governments can’t go on as they have. Being gifted cash does not bring about self-sustainability; they have to work for it.
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