Worse than Useless: How Foreign Aid is Killing Africa
The British tabloid The Daily Mail has, for a number of years, been running a self-styled war on the UK’s foreign aid budget. As depicted by the newspaper, UK aid money is wasted on frivolous projects including the “Ethiopian Spice Girls”, “Somali radio dramas” and benefitting “Palestinian TERRORISTS” [sic]. The Mail may be xenophobic garbage, but with 1.6million copies sold every day, it is influential garbage- and its petition to reduce spending on foreign aid has found a great many supporters.
Despite this, during its 7 years in power, the British Conservative government has never cut back on foreign aid spending. Even after the financial crisis, when some government departments faced cuts of 40%, the government held firm. Only three parts of the budget were ring-fenced in this manner: defence spending, the NHS, and the Department for International Development (DFID).
This budgeting choice was sold to the public as a sort of humanitarian action, a decision that Britain needed to “step up and meet its international obligations”, but this is not the case. The decision to provide foreign aid is, and has always been, a self-serving policy. Britain gives aid to Africa because it protects British interests in the region.
While many would assume there are great benefits to receiving foreign aid, it is often not the case. Developmental aid has clearly benefited some African states, Botswana being a key (and lonely) example. Besides Botswana however, the results of aid are far more mixed.
The total developmental aid given to Africa since 1945 amounts to between $500b and $1tr, but there is very little to show for it. Economic development in much of Sub-Saharan Africa has stagnated since the ‘60s and, according to some measurements, massive population increases combined with slow economic growth have actually caused living standards to fall below what they were at the time of independence.
Why is this? There are several factors which have severely limited the effectiveness of aid to Africa. One is ‘tied’ aid. When a tied loan or grant is provided to a recipient country, it is done so on the condition that the money be spent on goods or services from the donor. Thanks to this mechanism, tied aid can sometimes prove totally ineffective. In one enquiry regarding projected railway construction, planners in Eritrea discovered that it would be cheaper for them to build the project with local expertise and resources, rather than accepting aid money and being forced to employ foreigners.
Tied aid can also have serious negative effects on local industry. Strong national farming interests in the US have led to the legal requirement that food aid supplied to other countries must be bought from US producers. Overseas produce dumped in high volumes on local markets can have a devastating effect on local industries. As the market is flooded with cheap imports, local producers cannot hope to compete and are forced out of business.
Whilst aid can have direct impact on a country’s economic prospects, it is the political impact that is most significant. If the world has one picture of the African statesman, it is of rank corruption on an unbelievable scale. Kibaki's government was famously accused of "vomiting on the shoes of foreign donors" and fecklessly siphoning billions from money destined for development projects. His counterpart, President Sani Abacha of Nigeria, was estimated to have stolen almost $500m while in power.
In many African countries, corruption has become a way of life, enabled in part by the international aid that these countries receive. By uncritically providing politicians with 'free' money, foreign aid gives them the means and the opportunity to indulge in so-called ‘rent-seeking’ behaviour. At a hearing in 2003 before the United States Senate Committee on Foreign Relations, Senator Richard Lugar argued that the World Bank had overseen the loss, due to corruption, of around $100b of its loan funds intended for development. When the figures for other multinational donors were included, that estimate rose to around $200b.
In 1983, President Mobutu of Zaire met with US President Reagan to ask for easier terms to service the country's $5billion debt. In a subsequent press release, Reagan described Mobutu as a “faithful friend of the United States for the past 20 years” and the terms were granted. Shortly after this, and at vast expense, Mobutu rented a Concorde jet to fly his daughter to her wedding in the Ivory Coast.
Despite an appalling record of corruption, exploitation and political violence, Mobutu was consistently given favourable treatment by Western powers and significant access to financial aid. If aid enables corruption on such a scale, why do donors continue to lend? Mobutu (along with many other African leaders) was seen as a strategic ally of the West in its fight against Communism. Aid provided to these regimes acted as a bung to ensure that parties sympathetic to the West would remain in power, and Western interests and influence in Africa would be preserved. When asked why there is so little to show for aid money given to Africa, Rwandese President Paul Kagame stated plainly that “[it] was spent on sustaining client regimes...with minimal regard to….outcomes on our continent.”
Though the Cold War has now ended, a new global threat has emerged which challenges Western interests and stirs a similar response from Western states as the fight against communism did. The threat posed by international terrorist networks has created a new wave of clientelism.
African states have, once again, become the focus of Western attention, as their “ungoverned” spaces are seen as a safe haven for extremist groups. The USA’s defence budget currently includes $10b for foreign military aid. This spending is justified on the basis of “building partner capacity” and supplies numerous Sub-Saharan African countries, including Uganda and Burundi.
Whilst these two countries are seen as allies in the ‘War Against Terror’, both governments are highly corrupt and stand accused of serious human rights violations. Yoweri Museveni of Uganda has recently overseen his own re-election; whilst a spate of mass killings in Burundi have led to accusations of genocide.
Despite the enormous sums of money given to African states, aid has been very unsuccessful at changing and developing the region’s economy. The reason for this is that aid to Africa is given in ways which are not useful to development. The political, bureaucratic and commercial objectives of donors override development concerns and undermine economic growth. On top of this, the vast sums of money transferred have helped to entrench massive corruption.
For the moment, the status quo continues. Western states and institutions continue to give, African leaders eat, and the poor go hungry. Nothing will change until this cycle is broken. And as for the Daily Mail… well, they say a broken clock is right twice a day.
Rupert Wilkinson is a former student of SOAS University and aspiring misanthrope. Follow him on Twitter @nutstothis or contact him for more information.