The problem with aid to Africa

Talk of the Nation had a show on debt to Africa. It was hosted by Lynn Neary, whom I do not like as hostess (she is too impatient and abrupt), but the topic was well worth it. James Shikwati, director of the Inter-Region Economic Network in Nairobi was the first guest, and he started with an overview of his reasons, as an African, for despising aid to Africa.

[Shikwati]: I'm concerned about the aspect of beggar mentality that aid creates. And then there is also the aspect of aid killing Africa's creativity and entrepreneurship. And also the aspect of aid destroying ownership of the African problem, by transferring it to developed countries.

[Neary]: What are the alternatives

[Shikwati]: The alternative is to get Africans learning how to do business, and to get African governments facilitating an environment that will make it easier for Africans to do business.

The first clause here surprised me. Africa is again a very diverse continent, but speaking for Nigerians at least, I don't think anyone needs to teach business. Nigerians are the second most ruggedly entrepreneurial people I think I know as a class (Lebanese being the most). The biggest problem has been the opposite of what Shikwati says: the public sector treating the public interest too much as an extension of the business interest of those in power.

[Neary]: Do you think African countries need help getting such entrepreneurial ideas off the ground

[Shikwati]: The African leadership should look inward to the causes of the African problem. The first one being artificial barriers that make it so difficult for Africans to trade among themselves. Africa is a market of 800 million people. In that case before someone from outside can come to help us, we can help each other by opening ourselves up.

There was also an American guest, Steven Radelet, but Shikwati really set the tone of the discussion. I have been very happy to hear more intelligent African voices weigh in on these important topics. It's not that such folks are a new phenomenon by any means, but it's only lately that the media seems to be ready to give voice to those Africans who do not speak in terms that Westerners have come to expect. It feels to me that we have a nugget of opportunity for breaking down some of the oh so tiresome stereotypes.

Shikwati expressed the view that short term pain that would come from curtailing aid would be worth the long term benefit. He also pointed out that a lot of the "aid" really comes in the form of loans, which even when directed to such important causes as malaria treatment and primary school education, adds yet more long-term burden to the receiving countries. Radelet did point out that there is a recent trend towards subsidized loans and even outright grants.

The first caller was another Uchenna (of the countless so named). He suggested that if the main problem has been that corrupt regimes steal aid money, why don't organizations provide aid in terms of actual (presumably illiquid) resources for projects rather than cash. Shikwati responded that what is really needed is a "radical shake-up" of the economics that drive Africa, and that such a tinkering measure is really not enough. Radelet did point out some examples of modest success stories from countries receiving aid, but I agree with Shikwati that most African countries need things to happen at a much larger scale, and that even successfully targeted aid will not achieve such scale.

One of the callers asked from the point of view of a business owner asking essentially "if Africa is a mess, why should I invest there?" To me, this just underscored the importance of Shikwati's points. Even though I personally dislike Africa's sloth in shedding dependence on aid, I do not agree with the typical Western economist who says "make it easy for Westerners to make money in Africa and it will be worth all the aid imaginable". They can keep that trickle-down bullshit on their classroom chalkboards. I'm perfectly happy not to have any Western investors in Africa. I don't think we need them. Between ther very large and very successful body of Africans in diaspora and the 800 million still on the continent Shikwati mentions, there is plenty of resource for a completely indigenous African marketplace. The barriers we need to remove in Africa are not barriers for Westerners to invest but rather all the unfortunate barriers to professional achievement even among natives. If lowering these barriers also draws some Westerners, that's all very well—I don't advocate protectionism, which is after all the way in which the West sabotages African development at the same time they offer aid— but Western investment should be understood as a very secondary matter.

Despite my worries about the practicalities of business based on merit in Nigeria right now, I've started to look into how I can use my professional profile and entrepreneurial experience in ways that take advantage of my local knowledge in Nigeria, which is not enormous, by any means (I've been away too long), but is not insignificant. I've come to the point where I can't avoid doing so because my parents are very seriously talking about moving back to Nigeria in their retirement.

There is the thread that for me connects the continental-scale macroeconomics of the Live 8 and G8 hullaballo to the microeconomics of personal entrepreneurial interest. The only thing a liquid dole from the West can do is distract the ruling African class from the important task of engaging their professional class, much of which is dispersed because of the starkness of this very class distinction throughout so much of the continent. Western aid in the large can really do very little more than provide indirect discouragement to my own ambitions in my native country, and that of my peers. What I and my peers have to offer is hard work and professionalism over a steady period of time, but we're stymied because there is so much more more superficial attraction in greased megabucks from Western coffers.


"Quotīdiē" 26 June 2005
"Africa and business on Talk of the Nation"
"Those despicable gas flares"

[Uche Ogbuji]

via Copia
5 responses
Hi uche,

A really interesting article. I've been wondering for quite some time now what were the real roots of the problem over there, and I finally came to the point that African lack of real unity. This is a shame because Africa could play a major role in the world if it could unit. The continent has so much resources, both natural and human.

But then I haven't been able to understand why African couldn't unit to go in one common way.

Well when I look at EU, I can understand it takes time and is really hard but it's worth it.

Anyway, I've never been to Africa and I will refrain myself to judge what happens over there. I'm just sad that such a powerful continent can be in such a mess :(

- Sylvain
Just glad to see someone else feels the way I do about the whole IMF trickle down economics crap.

I understand your question, but I think you have to realize what a big mess Europe left through colonialism and also (with America as well) through cold war power politics that lasted through the eighties.  Europeans left illogical borders and frayed institutions that were geared towards Europe's interests rather than Africa's.  Europe and America killed or corrupted an entire generation of Africa's leadership.  I definitely believe that it is the responsibility of Africans to get themselves out of this mess, but I don't believe this because I'm excusing Europe and America from helping create the mess in the first place.

I also like to point out that it took much of Europe almost 1000 years to come into its own after its colonization (notably by the Roman Empire).  I think Africa can do so in one tenth that time, even without Western assistance.

Sure, I didn't mean that it is an easy task. I do realise how badly Europe hurt Africa and I also understand it has taken such a long time for Europe to start building its unity.

My point was that I find it sad that Africans keep fighting themselves and don't realise that it benefits entities like the USA or EU... :(

- Sylvain
Actually, a protective tariff makes excellent sense in some circumstances.  Back in 1960^H^H^H^H1790, the U.S., then a Third World (or charitably Second World) nation, set up a protective tariff and held it in place for almost a century.  The reason the U.S. could do that (whereas Africa can't), of course, is that the superpower of the day, the British Empire, was inclined to leave America alone after getting its nose bloodied trying the alternative approach.  Maybe Africa got its independence too peacefully?