The State of Aid in Africa

April 04, 2009 Tagged with: social-justice

This is a fascinating article about the state of aid to Africa. The author argues that it’s destroying the continent.

[...] evidence overwhelmingly demonstrates that aid to Africa has made the poor poorer, and the growth slower. The insidious aid culture has left African countries more debt-laden, more inflation-prone, more vulnerable to the vagaries of the currency markets and more unattractive to higher-quality investment. It’s increased the risk of civil conflict and unrest (the fact that over 60% of sub-Saharan Africa’s population is under the age of 24 with few economic prospects is a cause for worry). Aid is an unmitigated political, economic and humanitarian disaster.

How much of the aid to Africa actually gets to the needy? Not much, I don’t think.

As recently as 2002, the African Union, an organization of African nations, estimated that corruption was costing the continent $150 billion a year, as international donors were apparently turning a blind eye to the simple fact that aid money was inadvertently fueling graft. With few or no strings attached, it has been all too easy for the funds to be used for anything, save the developmental purpose for which they were intended.

Recently, I’ve become interested in microfinance in Africa, via a site called Kiva. Kiva pools investor funds, and then makes loans to businesspeople to help them develop their businesses and try to build a real economy. I’ve been talking with some employees of Blend about sponsoring Kiva as a company – making systematic loans to business people to try and help them build a sustainable economy and effect real change.

Comments

Chris_ says:

I was actually reading about this the other day in a Newsweek or something like that the other day. Apparently there are a lot of Chinese companies that have started to invest in the continent. They pointed to the fact that Africa has the highest return on investment of any continent and a large portion of the countries are becoming stable enough to actually invest in.

The article also pointed out how demoralizing it is for people in Africa to have to live a life of continual aid.

Thinking about it logically, who would be doing more good? Someone that continually gave a city of people 17 cents a day to live off of or a corporation that started up a production factory in a city and paid them $1 a day to create something. Granted one is more politically correct than the other, but which is more helpful.

deane says:

Chinese involvement in Africa is both good and bad. People are calling it the new wave of imperialism, saying that China has plans to essentially take over some African nations. While they probably couldn’t just invade, they can control nations through economic ties.

You know, like America does...

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