Is foreign aid a friend or foe to Africa?

By Simon Mwebaze

Editor’s note: The opinions expressed here are those of the authors. View more opinion on ScoonTV.

On the surface, foreign aid seems like a great deal. This is especially true for poorer nations in the world. Africa is one of the biggest beneficiaries of foreign aid, accounting for trillions of dollars. Despite all the foreign aid flowing into the continent though, there seems to be a mismatch in development. This begs the question whether foreign aid is actually value-adding to the African countries receiving it. 

Foreign aid is where one country assists another country with aid. This can take various forms. Some of the forms of foreign aid are grants, food, expertise, and training. These forms have been the primary exports from donor countries to the African continent to assist with issues including wars, famines, droughts, poor education, poverty, and poor infrastructure. 

The world seems to be progressing in the right direction when it comes to poverty. Statistics of extreme poverty around the world show a reduction from 1.9 billion people in the 90s to 736 million currently. But what is concerning is the inverse trend on one continent, Africa. In Africa, poverty has almost doubled from the 90s. The numbers have gone from 230 million people to over 430 million people currently. 

Despite all the foreign aid flooding Africa, what gives? Shouldn’t poverty be reduced?

Foreign aid may seem great on the surface, and it is in some instances in Africa. The continent is plagued with several emergency situations including famine, health, and wars. Some of the foreign aid sent to Africa is allocated to help Africans provide necessary medicines for diseases like malaria, Ebola, cholera, and HIV. In war time, such as in South Sudan, Ethiopia, and Somalia, there are millions of refugees displaced from their homes. Foreign aid helps provide food and water equipment that would be difficult to access in times of conflict. 

These all sound good and they are. Aid, in and of itself, is not bad. It is what is done with it. And in many emergency cases, it can be used for good. But there is a sinister side to it that unfortunately, is part of the reason why Africa stays in the dark pit of poverty with no end in sight.

Not all aid is for a good motive. Of the poorest countries in the world, the top 10 are not the biggest recipients of aid. So where is the aid going? The answer is to poor countries meeting certain conditions. Many of the big and recognized donors in the world like the World Bank and IMF have been accused of donating with ulterior motives. The ulterior motives include accessing resources in poor countries. These may include oil, rare minerals, and access to certain areas for geopolitical reasons.

But that access comes at a cost. The government elites must be bribed which means they stand to benefit the most from the aid while the poor miss out. The elites benefit because they do not have to account to the people for aid since it’s not taxed.

Additionally, many bribes are paid throughout the aid project to maintain operations which may include school and infrastructure projects. There have been several reports of mismanagement of funds in Africa. One infamous example is the Global Fund in Uganda in 2005. The mismanagement of funds led to the suspension of funding for the next few years after over $16 million was lost.

Another issue with foreign aid is it usually covers basic subsistence needs. These needs include water, food, sanitation services, and shelter. While these may act like Band-Aid, unfortunately, these needs do not assist Africans to become self-sustainable. This is because rather than teaching Africans ways of self-sustenance such as entrepreneurship, the aid doubles down on creating a dependence mindset. Yet, a productivity-based Africa is the solution to many of its woes. 

More so, with aid like food that is subsidized, local suppliers are put in a challenging situation. This is because the price of local food costs more than food aid. That makes it more competitive on the market, in turn making it even harder for local suppliers to survive. Additionally, because most aid is spent on consumer goods and a lot of the money received by the elites leaves African countries, there is a rise in inflation. With increased inflation, investment is discouraged. Without investment in African economies, there is low economic development. 

So, where does this leave African economies regarding foreign aid? Foreign aid needs reconfiguration which means it needs to be geared toward assisting Africans toward economic development. It should focus on education, training, and providing finance toward small businesses that are the heart of most African economies. 

Aid should be directed toward creating an Africa that does not need any more aid, not an Africa that depends on it. But this would be in an ideal world without donors with ulterior motives and intentions for the African continent with the compliance of African leaders.