Foreign Aid and Debt to Africa: The Debate Continues

By

Lawal M. Marafa, Ph.D.

Email: lalmarafa@yahoo.com

ActionAid International, an international development agency whose aim is to fight poverty worldwide, has long indicated that the world’s richest nations greatly exaggerate the amount they spend on aid to poor countries especially to Africa. In the same token, Professor Jeffrey Sachs in his book titled: “The End of Poverty: How We Can Make it Happen in Our Lifetime” gave a vivid vindication to this assertion. David Sogge (a veteran aid worker) in “Give and Take: What is the Matter With Foreign Aid” said that aid is ambiguous and that its public image is one of Western beneficence and non-Western beggary. The ambiguity in this aid-debt debate is the fact that the donors take more than they give in the overall equation. A few years back, a UN report noted that between 1970 and 2002, African countries received some $540 billion in loans, paid back close to $550 billion in principal and interest, and still held debt of $295 billion at the end of 2002. A sympathetic aid indeed! Although these figures could vary according to regions, most discussions on this theme can assume some modicum of homogeneity. Michael Maren, a former USAID worker (by any means an insider) concluded that foreign aid to Africa could be “positively evil”. This is probably what prompted Colonel Moammar Ghaddafi to alert fellow Africans to reject aid or as he put it “begging”, at the opening of the 5^th Ordinary Session of the African Union in Tripoli on the eve of the G8 Summit. In a paraphrase, Ghaddafi urged fellow Africans not to go begging, reject conditional aid and embrace self reliance. Although this sounds commendable, it is off course expected that he will have a hard task selling this tune. And so was the outcome.

Aid is often used loosely to cover all forms of resources transfer from governments, official institutions or NGOs to governments or people of developing countries or where such is needed. Unfortunately, this has not been the case. While the concept of aid (to give to the needy) has been enshrined in the context of human existence, in contemporary times, it has been used to promote certain objectives. To this end, donors perceive and define aid to suit their strategic motives. Where aid has been provided, it is often tied to foreign policy objectives and regardless of how it is defined it has never been an unconditional transfer of resources and it will not be even as the current debate unravels.

Over the past few decades in post independent Africa, the debate on aid has been ripe with contradictions as to whom, when and how aid should be given. The debate with donors has often centred on the amount available, the economic, social and even political conditions that must be met before being disbursed. And this nagging mostly continues at the expense of the real poor who the aid package is meant for. Most of the aid has indeed been driven by geopolitical and commercial interests rather than by efforts to protect and enhance human rights. In the 1980s and sometime thereafter, donor conditions and their stringent requirements have sometimes forced governments to cut essential services including health, education, infrastructure and even agricultural subsidy. Although estimates of the financing needs of African countries vary, it all points to the fact that the current efforts by donors are grossly inadequate.

When the former U.S. Secretary of the Treasury Paul O’Neil lamented that the US had spent trillions of dollars with nothing to show for it, Jeffrey Sachs indicated that it is no surprise because there has infact been so little aid to Africa. In the same book mentioned above, Sachs graphically mentioned that the amount of aid per year is just $30 per sub-Saharan African in 2002 from the entire world. Further breakdown of this amount shows that $5 goes to the various consultants from donor countries; more than $3 went to food and emergency aid, $4 for servicing debts and another $5 for debt relief operations. Finally, indeed, it is only $12 that went to Africa in the name of aid. The reader is hereby left alone to ponder and complete the arithmetic on how $12 or so can help in eradicating poverty or even add to the quality of life that is being talked about.

In contemporary development discourse and indeed recently, singing in concert that says, “Make Poverty History”, the issue of foreign aid and debt in Africa has re-emerged with added puissance (especially after the launching of the Blair Commission for Africa in 2004). Before the current pre-G8 razzmatazz and the brouhaha that was started by Tony Blair on the eve of his EU presidency, a large number of fronts have been opened to debate this issue and seek for solutions. In addition to the Commission for Africa, one can mention the Bill and Melinda Gates Foundation, Bono’s DATA (Debt, Aid, Trade for Africa), Actionaid International, Oxfam, and many other reputable NGOs that have committed themselves to fighting foreign aid and injustices in and to Africa. It is therefore no surprise to scholars and political observers when we saw the erudite and once charismatic Tony Blair took over the political operative that facilitated the current intense hype on African aid and debt debate.

While these activities continue to be relevant, it should be noted that simply increasing aid alone is not enough! In order to achieve success in this whole process, complete debt forgiveness is probably the first step. Furthermore, there is the need to escalate growth and put in place building blocks that could be used to achieve the targets set for the Millennium Development Goals.  For these goals to be met either, by the year 2015 or anytime sooner anyway, a concert of frameworks that will produce results will include policies of good governance, transparency and debt management. Others will include the diversification of the economy and a sustainable economic growth. Some of these frameworks cannot be put in place as there are priorities that will have to be addressed and the accessibility to markets is to some extent beyond the reach of most African producers. For example, the farm bill that George Bush signed early in the first term of his presidency gave American farmers about $20 billion a year in subsidies. The question is how can we turn this around or at least use this moment to the benefit of the whole of Africa?

Secondly, there is the need to target aid posts where it is mostly needed. At the moment, aid mismanagement is rampant all over Africa. This mismanagement and the lack of effectiveness leads to spending on overpriced technical assistance on international consultants; tying aid to purchases from donor countries, lack of monitoring and reporting; excessive administrative costs, etc.  Consequently, recipient governments have now realized that they have to engage in reforms leading to democracy, accountability, transparency etc. Some of these are already enshrined in the NEPAD framework. But in addition to the much talked about monitoring and peer review process, for which by the end of the year 2004 only 16 countries have signed, there has to be a framework of performance pledge. Performance pledge can be carved in such a way that it will tally well with the targets of the MDGs.

Finally, this article is written on the premise that unless a drastic change occurs on the part of the developed world with regard to how Africa is viewed, treated and assisted, the notion of aid will continuously fail to achieve its aim. Unless also, utilization of such aid and institutional frameworks undergo drastic changes in Africa, no positive outcome will emerge.

Dr. Lawal M. Marafa Teaches at The Chinese University of Hong Kong