Aid in Africa​: A Blessing or a Curse ?

“Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime"

The notion that aid can alleviate poverty and inequality in Africa is dominant in the development conversation. I recently came across a post by The Economist on how "rich countries" are giving more aid to poor and less developed countries and it slightly annoyed me. A few years ago, I might have been happy to see that post, because I once believed that Africa desperately needed aid. I was so confident this was a potential solution to end poverty and the unfavourable living conditions in certain parts of the continent. I mean the idea seemed simple enough, rich countries can afford to give, so why not? My perception of aid has completely changed and here's why.

I believe that the concept of foreign aid takes the form of colonialism as it victimizes Africa and portrays it as a helpless continent that needs the support and generosity of the West to survive. Foreign aid uplifts international organizations and donor countries and weakens the African state. As a result, the narrative of what development ought to be is defined and shaped by the West. I admit that comparing foreign aid to colonialism sounds a bit extreme. However, in reality, these two situations possess an undeniable similarity. Foreign aid is an indirect channel for the West to assert dominance on the African continent. Some might argue that this is a very pessimistic view but it is time for the paternalistic west to take a step back and allow Africa to deal with its own problems.

Aid creates room for over-dependency and removes any incentive for innovation and productivity among policymakers. I mean, its free money with no strings attached. This over-dependency fuels corruption which leads to a vicious cycle of sluggish growth, low investment and low business and consumer confidence. All these factors agglomerated damages the growth prospects for the continent and increase poverty and inequality rates.

Dambisa Moyo is one of the economists that holds a strong view that aid has exacerbated poverty and income inequality in Africa. She highlights that aid encourages over-dependency and has made governments lax in pursuing economic and social policies that improve the welfare and living conditions of their citizens.

"The road to poverty has been paved with aid"

We cannot just place all the blame on the donors. The recipients also play a crucial role in rendering aid useless and counterproductive. I believe that the major impediment to growth and development in Africa is the quality of institutions. Acemoglu and Robinson's "Why Nations Fail" sheds light on the role of institutions in economic growth and development.

Most African countries are poor because they have extractive institutions. These institutions are built on corruption and political patronage; thus they are unable to efficiently channel funds and implement policies that favour the economic fundamentals of their country. Although many African governments have made remarkable progress in enacting good governance policies and ending corruption, there is still room for improvement.

I do not completely argue against aid. Foreign aid inflows can potentially have highly beneficial impacts on economic growth and development in Africa. However, the impact will only be visible when aid is utilized efficiently and channelled towards productive and efficient activities. African governments need to recognize that the continent’s growth and prosperity are in their hands and not in that of "developed countries". Africa needs to define its own narrative of development and make active efforts towards achieving it. Africa needs to do better.