Can a Massive Foreign Aid Be the Solution to Africa's Problems, Part 1

Dr. Aklog Barara, former senior advisor to the World Bank

Dr. Aklog BiraraI commend the provocative proposal by Jonathan Powers and others that a massive aid will be the solution to Africa’s problems. However, I am afraid to dispute that idea that a massive Western aid program will transform structural and institutional poverty and technological backwardness in this otherwise promising continent populated by the youngest population on the planet.

It is said that a correct understanding of a problem is half the solution. Unfortunately, the proposed massive aid for Africa does not flow from a correct understanding of the problem. Therefore, to propose a viable remedy for sustainable and equitable development in Africa, behooves African scholars, academics, experts, and activists to reframe the question based on the roots causes of the problems.

First, part of the root causes of Africa’s structural, institutional, and cultural hurdles emanates from the massive slave trade that decapitalized Black Africa. Internal andBritish Enslavement Ship external slave traders colluded, recruited, and shipped to the Caribbean, North and South America, the Middle East, and other foreign places millions of Black African: young, strong, and productive girls, boys, women, and men. The labor of these millions transformed and enriched Western economies while depriving African nations of the human capital they needed to innovate, save, invest, change, and compete.

Second, the Berlin Conference of November 15, 1884 – February 26, 1885, made matters even worse when European colonialists divided Africa into their colonies. African nations were commoditized for the benefit of Europe and the rest of the West. European colonialists were unabashed at herding Africans into quarreling ethnic groups, a phenomenon that persists to this day. A divided Africa served the corporate and national interests of the colonizers.

Colonialists constructed transportation infrastructures by sea, road, rail, and air that linked African trade routes of raw materials, finished goods from the industrialized West as well as services to cater directly to Europe and North America while denying African nations and states the opportunity to freely trade among themselves.

Third, in the post-independence era, the international financial and monetary architecture established after the Second World War (Bretton Woods) and dominated by developed and rich countries left no room for African states to set terms and conditions concerning aid, loans, and debts. Structural adjustment lending, Foreign Direct Investment (FDI), terms of trade, and most recently the availability of life saving medicines for COVID-19 were and are still dictated by the same forces.

Africans are fully cognizant that Bretton Woods institutions, the World Bank and IMF, are dominated by the United States and other Western powers. It is simply impossible for me and other conscientious people to consider these institutions as democratic, just, and fair. They were not established to be that. 

In fact, this dominance has diminished the bargaining power of African states, including consideration by the Bretton Woods bodies to cancel or at least ease the debt burden and to avail more financing at reasonable terms or for countries of the Organization for Economic Co-operation and Development (OECD) to avail medicines whenever catastrophic pandemics emerge. “The rat hole” or former President Trump’s characterization of “Shit hole African countries” does not explain the flawed financial and monetary architecture that afflicts Africa and other least developed countries.

Hyperinflation that affects the majority of the world’s 8 billion people is deeply rooted in and driven by financial and monetary policies in dominant economies. The most recent hyperinflation relating to food prices is said to have been caused by the Russia-Ukraine war that is in turn fueled and sustained by the infusion of billions of dollars from the US and Western Europe. Yet, there is no serious call for a peaceful resolution of the war. Meanwhile, food and fuel importing countries continue to suffer suggesting that the international security system itself is also broken. It is unlikely that infusion of foreign aid into Africa will mitigate the risk of food insecurity.

In food importing African countries, including Kenya, which are  also suffering from drought, the effects of hyperinflation can be devastating. The prices of consumer goods rise much faster than wages and other incomes. The poor and the middle class are unable to pay for necessities. This is true in Ethiopia as it is in Nigeria, Egypt, and others.

There are ominous signs that, if the Russia and Ukraine war, the war in Ethiopia, the tension in East Asia (USA against China over Taiwan) are not resolved soon, hyperinflation might cause the economies and financial systems of many countries to collapse. In poor African countries such as Ethiopia, the problem of hyperinflation is compounded by an insidious informal market, the hoarding of consumables and, by the bottlenecks in the global supply chain. Can infusion of more aid tackle these problems? I do not believe so.

Many people including Jonathan Power, are right to say that “Public debt has reached almost 60 percent of GDP, leaving the region with debt levels last seen in the early 2000s. In fact, 19 of the region’s low-income countries are now at high risk of debt distress or in debt distress, and inflation rates have accelerated to levels not seen in about 15 years”.

The solution is not more aid that has to be paid eventually. What is needed is debt cancelation or debt relief. It is the deliberate political unwillingness to challenge the financial and monetary system that keep African nations dependent and powerless.

Another area in which the pro-massive aid proposers do not consider is the lingering colonial mindset and the colonizers’ superiority complex which continue to propagate the narrative that they must channel aid to help poor Black Africans when in fact they know that such aids are designed to extract raw materials from Africa and provide markets for the wealthy countries’ manufactured goods, but not to develop Africa.

Therefore, a viable remedy for sustainable and equitable development in Africa, behooves African scholars, academics, experts, and activists to reframe the question of African development based on the root causes of the problems instead of sheepishly following the exploiters’ development scheme.