Africa: Help the people of Africa … don’t give generously
For years debate on African development has been dominated by two ageing rock stars, Bono and Bob Geldof. With passionate appeals, they have mobilised millions of people to join campaigns to cut African debt and boost aid. Bono has been received in the White House and Mr Geldof has offered advice to the leaders of the Group of Eight countries on how to untie their purse strings. In years to come, people will wonder how it came to be that these Irish rockers acquired such moral authority that they stifled debate on the aid issue and crowded out African voices.
The age of “glamour aid” is passing. An African voice, in the form of Dambisa Moyo, a Zambian economist, is being hailed as the “anti-Bono”. Her book, Dead Aid – a jab at Mr Geldof’s 1985 Live Aid concert – has become an unlikely bestseller in the US. She has just been named as one of Time magazine’s 100 most influential people of 2009.
Her thesis is that foreign aid keeps Africa in a “permanently childlike state”. It fosters corruption, stunts the development of skills among government officials and hinders the formation of a stable middle class. The pouring of $1 trillion in aid to Africa over 50 years has served only to impoverish the continent. Aid, she says, “is no longer part of the potential solution. It’s part of the problem. In fact, it is the problem.”
Half a million foreigners earn their living administering this failed aid system, while every year 60,000 of African’s best and brightest emigrate to seek better lives abroad. Her solution is radical: all African leaders should get a phone call to say that the aid will stop in five years time, and they had better get ready to live within their means.
Ms Moyo’s thesis has been widely criticised as simplistic and failing to take account of the real successes of aid. Critics point out that South Korea was pumped up with US aid during the Cold War which helped it to become the economic success story it is today.
Aid professionals warn that millions could die if her ideas are followed. But no one can deny that, for the first time, an African woman, with beliefs no less passionately held than Bono and Geldof, has wrestled the debate from the hands of elderly white men. There is a “yes we can” attitude to her argument that has struck a nationalist chord among many Africans tired of being cast as the world’s helpless victims.
To replace aid doled out by foreign governments she advocates commercial borrowing, microfinance and foreign investment. What is important is that governments should take responsibility for their finances. Aid professionals smell a rat: just as western donor countries have run out of money to give to Africa thanks to the world financial crisis, here comes a smart, glamorous African economist telling them they can forget their colonial-era obligations.
There is of course no conspiracy. All Ms Moyo is guilty of is perfect timing and a gift for publicity. The old paradigm cannot be sustained, and many economists lacking her star quality have been saying it. With or without Ms Moyo, a new paradigm is emerging in African development.
Part of it was apparent as she was writing. She is a great supporter of China’s push into Africa, where it is acquiring rights to oil, metals and foodstuffs. Unlike many who worry about China’s rising influence, she sees Beijing as Africa’s friend. If Africans are concerned about exploitation of labour, they can make appropriate policy responses. Its interests are clear for all to see, and Chinese investment will bring benefits in the long term. Western aid has failed, and its only effect seems to be to keep Africa poor.
The second element is more recent. The quest for food security is reshaping the relations between capital-rich countries, such as the UAE, and the poorer parts of Africa. Aid budgets will soon be dwarfed by investment in agricultural land, a move prompted by last year’s food price shock, when some grain surplus countries banned exports. Capital is now flowing into Sudan, Ethiopia, Pakistan and other countries to lease agricultural land. The prospect of food scarcity has raised the value of farm land, and the water that goes with it, to such an extent that what was long neglected is now a commercial asset.
This week The Economist, a bastion of free-market thought, was in hand-wringing mode as it discussed the effects of Chinese and Arab investment in African farming. It would be graceless, it said, to write off foreign investment in some of the most miserable places on earth. But the magazine could not suppress a “nagging unease” about the protectionist aspects of some of these deals.
The rise of investment, not aid, fits in with Ms Moyo’s thesis that African countries must make their own way in the world. Not surprisingly there are many questions to be answered whether this influx of capital into agribusiness will succeed in poor areas lacking roads and infrastructure. Everything in agriculture is a long-term investment, and these giant projects will require careful handling of water rights, and the sensitive treatment of local people.
But there is no turning back. The future of Africa has to be based more on trade and investment than aid, difficult as this has been to achieve so far. Managing these vast agricultural investments will be a stiff test for the governments of Sudan and other countries. The world will also be looking – with some scepticism – to see if Arab investors, both state-linked and private, can achieve what decades of aid from western donors has failed to do. Ms Moyo’s theory is about to be tested. We will see if African governments can, as she proclaims, rise to the challenge.
aphilps@thenational.ae
(thenational.ae)