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Africa needs trade not Aid

Isa Senkumba

Africa needs trade not Aid

Aid workers distributing aid

Aid workers distributing aid

For the last 50 years Africa has received over US$ 500 billion in Aid. Despite these huge inflows, and systemic corruption.

Extending aid to effect economic transformation is synonymous with digging up one hole to cover another. This means that aid can never be a good vehicle for development and these handouts have never been an effective way to achieve economic transformation.

In the first place what we call aid is not aid. Most Aid programs are poorly structured and constrained by conditionality. This immensely serves to undermine the independence of recipient countries and the management of their economic affairs.

It has also been evidenced that aid erodes accountability. Actually providing Aid through the governments of poor countries erodes accountability because governments become more accountable to donors than to their own citizens, the citizens they are mandated to serve.

The chronic dependency syndrome also sets in.  Because poor countries are dependent on donor handouts they fail to prioritize the generation of domestic resources. This creates a chronic dependency on Aid, stifles creativity and undermines the dignity of people.

If the world changed the current economic order that robs Africa of the ability to trade on equal terms on the world market, the continent would not need donor aid and could look after itself.

What the continent requires is the restructuring of the skewed global economic system which foster disasters such as the famine, because in its current form, the system only serves to perpetuate Western economic interests at the expense of Africa.

If aid has been around for sometime where are the results?  The continent has been receiving baskets of aid yet, real per-capita income today is lower than it was in the 1970s, and more than 50% of the population live on less than a dollar a day, a figure that has nearly doubled in two decades.

If this economic development model is evidently not working, why is it still being imposed? Why is it being used in Africa only? China moved 300 million people out of poverty in 30 yrs.

India has approximately 300 million people in its middle class. They did not achieve this by relying on aid to the extent that the entire continent of Africa does today and has for the past half century plus.

African leaders now behave like welfare recipients, waiting on their monthly check, instead of looking for alternative means of revenue generation. That is partially the reason why many African leaders get zero respect in the global community.

They are perceived as beggars. They are sitting on priceless natural resources that can be traded, begging for money from countries that are in actuality, broke themselves.  Let’s look at it in this dimension: Total foreign aid to Africa from all sources amounts to 30billion dollars a year, but corruption alone cost Africa 148 billion dollars a year.

Has those billions of dollars in aid sent from wealthy countries to developing African nations helped to reduce poverty and increase growth?

Trade can be a key factor in economic development. The prudent use of trade can boost a country’s development and create absolute gains for the trading partners involved. Trade has been touted as an important tool in the path to development by prominent economists.

However trade may not be a panacea for development as important questions surrounding how free trade really is and the harm trade can cause domestic infant industries to come into play.

The current consensus is that trade, development, and poverty reductions are intimately linked. And this is the naked truth. Sustained strong growth over longer periods is strongly associated with poverty reduction, while trade and growth are strongly linked.

Countries that develop invariably increase their integration with the global economy, while export-led growth has been a key part of many countries’ successful development strategies. This is what African countries need to engage in and not stretching their supple hands to receive aid.

The rich world can help by opening its markets to textiles, agricultural goods, and other products from the poor world.

Trade will lead to production that will lift the standards of living in poor countries. It could also remove its agricultural subsidies, which reduce world market prices of these goods, reducing the amount poor-world producers can obtain for their goods. Our financial patrons ought to shut their wallets first and give us an opportunity to aim at sustainable growth and developments and not handouts.

senkumbab@ymail.com

 

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