Aid a curse in disguise

Africa received in the last 50 years more than US$1 trillion in aid (values brought to its present value), but from the 48 poorest countries in the world 38 are African states. This “cheap way” to buy guilty-relief that the developed world found it has prevented Africa to reach its real potential and condemned its citizens to a beggar’s life. That is why it should be found a new approach to tackle this old problem.

First it has to be analyzed what are the effects of this money inside African societies. Most of the donations do not come with clear goals and the proper planning, therefore do not reaching the wished effects. And moreover it has some side effects that just help to increase the problem itself, those side effects are:

• Creates an enormous bureaucracy (68% of the money donated to health in Uganda are used to overhead costs);
• Makes corrupt governments richer (from US$20 bi donated to Congo US$5 bi ended up in Mobutu’s account in Switzerland);
• Suffocates local entrepreneurs (in 2003, 650.000 tons of grain were donated to prevent the effects of a probable drought that never happened, and made the local producer to swallow a big drop in their prices)
• Favors a beggar mentality.

Those are the reasons why the Quenian Economist, head of the NGO that try to find new solutions for Africa, says – “For God sake stop helping Africa”!

The new path that Africa and those who are trying to help should tread is good and old-fashioned capitalism. It worked for East Asia – Africa of the 60s – and should work now for Africa.

Education, fair trade and productive investments are the key to rescue millions from poverty in the continent. Money shouldn’t be given it should be earned. When capital is invested in productive activities it creates a virtuous circle. First it wakes the entrepreneurs within the population, then it creates jobs, then generates wealth, then it is used to wake more entrepreneurs, and so on and on. The more this circle grows the more it makes corrupt governments and mammoth bureaucracy unacceptable and thus, creating an urge within entrepreneurs and consumers to get rid of then.

If instead of see Africa as a continent to be helped developed countries see Africa as partner for business, they would then be really helping pull the continent out of poverty. It is imperative to stop patronizing Africa and allows it to achieve the real independency - the economical one.