Aid in Africa.

2014.
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Has aid been a cure or curse for african states in their efforts to develop?

Aid Hasnt Helped

1. The stated purpose of foreign aid is to promote economic and human
development. Recently, the ability of foreign aid to achieve its goals is called into
question.
2. Widespread conceptual and empirical literature suggests that foreign aid is
ineffective.
3. The effect of this aid is in doubt.
4. Kasper (2006) argues that over the past 50 years USD 1 trillion given to subSaharan African countries has not produced any significant impact on economic growth.
5. In addition, it is found that corruption has hindered economic growth of most aidrecipient countries in Sub Saharan African countries (Kasper, 2006).
6. Despite receiving foreign aid for promoting economic programs over the past
decades, some countries have experienced a decline in their real GPD per capita in
comparison to a few decades earlier.
7. For example, Zambias average income fell from USD 540 to USD 300 between
1964 and 2000, despite getting more aid per capita than any other countries (Werlin,
2005)
8. The late Milton Friedman and development economist like Peter Bauer, for
example have argued that aid does not a have positive impact on economic growth, and in
some cases it might even ruin the countries that aid is given to.
9. According to Bauer, Development aid is ... not necessary to rescue poor societies
from a vicious circle of poverty.
10. Indeed it is far more likely to keep them in that state.
11. It promotes dependence on others.
12. It encourages the idea that emergence from poverty depends on external
donations rather than on people's own efforts, motivation, arrangements and institutions
(Bauer, 1976).
Aid is needed though
1. In contrast, other scholars believe that aid would be effective in promoting
growth if certain criteria are met.
2. Jeffrey Sachs for example, believes that developing countries need aid to initiate
economic growth, and once the economic growth takes place the country will be able to
sustain itself.

3. Without aid, some developing countries would be stuck in what he calls the
poverty trap forever.
4. He asks donor countries to increase aid to the poor countries.
5. Sachs concludes that When countries get their foot on the ladder of development,
they are generally able to continue the upward climb. If a country is trapped below the
ladder, with the first rung 4 too high off the ground, the climb does not even get started.
6. The main objective of economic development for the poorest countries is to help
these countries get a foothold on the ladder.
7. The rich countries need to invest enough so that these countries can get their foot
on the ladder.
8. After that, the tremendous dynamism of self-sustaining economic growth can take
hold (Sachs, 2005). Similarly, James Wolfensohn, the former World Bank President,
argues that aid would be effective if the recipient countries could restraint corruption,
improve their policies and governance capacity (Easterly, 2003).
Does aid improve living standards in developing countries?
1. There is extensive evidence to show that significant aid does reach intended
beneficiaries and provides them with key services.
2. The quality of life in developing countries has improved appreciably over the last
fifty years, even in countries where incomes have stagnated or fallen back, and aid has
contributed significantly to these gains.
3. For example, about 80% of the worlds children now get basic vaccinations,
saving about 3 million lives a year, and over half of vaccinations in low-income countries
are financed by foreign aid.
4. The UK Department for International Development estimates that each year
British aid pays for 11 million children to go to school more children than the UK
government educates at home but at 2.5% of the cost.14

I would argue that aid is not good for africa because it makes way for corruption.
1. Relationship between Aid and Corruption Understanding the effect of aid on
corruption is crucial to explaining why aid has failed to promote social conditions and
economic growth in the developing countries.
2. There have been just a handful of relevant studies.
3. Knack (2000) investigated whether aid and quality of governance have any
relationship.
4. He defined quality of governance in terms of bureaucratic quality, corruption, and
rule of law.
5. He found that aid dependent countries tend to have low institutional qualityi.e.,
they have low accountability, more rent seeking opportunities, scare away talented people

for the bureaucracy, and reduce pressure for them to reform inefficient policies and
institutions.
6. He argued that higher aid level reduce quality of institutions.
7. Alesina and Weder (2002) studied whether corrupt governments receive less aid
than less corrupt governments.
8. They found no evidence that corrupt governments receive less aid.
9. In fact, they found corrupt governments receive more foreign aid in some
circumstances.
10. They also found that an increase in aid is often accompanied by more rent seeking
and an increase in corruption.
11. Brautigam (2004) also studied the effect large scale aid on governance quality in
Sub-Saharan Africa. She also found that high level of aid is associated with weakening in
the quality of governance.
12. She concluded that large scale aid provides disincentives for the country to
improve its governance quality, creates soft budget constraints and generates more rent
seeking opportunities.
13. Hence, she indirectly concluded that aid would increase corrupt activities.
14. While corruption is detrimental to economic growth, it is very likely to be the
case that corruption limits the effectiveness of aid as well.

1. The impact of foreign aid has always been damaged because money
ends up in the wrong hands, or lost in a sea of bureaucracy.
2. Transfers to governments allow the rulers of developing nations to
spend as they wish, rather than having to help the poor.
3. The Reserve Bank of Zimbabwe was accused in 2008 of wasting $7.3
million of a $12.3 million foreign currency transfer by the Global Fund to Fight
AIDS, Tuberculosis and Malaria, having used some of the donation to
purchase vehicles for the Information Ministry, satellite dishes, televisions
and farm equipment.
4. When the International Criminal Court issued an arrest warrant for
Sudanese President Omar al-Bashir in 2009, his response was to order 13
NGOs to leave the country immediately.
5. Despite losing as much as 5m, in the case of Oxfam GB, the charities
and their donor governments did nothing, apart from hoping to return soon.
[2]
6. Aid agencies should not let humanitarian crises be cause for
unjustifiable trust in regimes with a proven record of neglecting the welfare of
their citizens, such as Mugabes or al-Bashirs, when their actions might then
cause the country to go backwards.
7. they must take a firmer line against kleptocratic, uncooperative
leaders, rather than ignoring their history and allowing them to condemn
their people to further suffering

Role of Aid in the Congo

1. Since independence from Belgium in 1960, the Democratic Republic of Congo
(DRC), known as Zaire until 1997, has been a haven for conflict and corruption.[45]
2. As a country rich in resources including diamonds, coffee, cobalt and crude oil,
the DRC should arguably be one of the wealthiest nations on the African continent.
3. The land in the DRC holds 80% of the worlds coltan reserves and over 60% of
the worlds cobalt reserves[46], which are minerals in high demand throughout the world.
4. Instead it is estimated that 1,000 people perish every day from disease, hunger
and violence[47], that the Gross National Income (GNI) is about US$140[48], and the
total external debt in 2005 was US$10837 million[49].
5. Since 1998, at least 5.4 million people have died and 47% of these have been
children[50].
6. In addition to this, at least 1.5 million people have been internally displaced or
become refugees[51].
7. Such statistics make the DRC an inevitable recipient of foreign aid
8. In terms of all sources of aid, the DRC was the eighth largest recipient in Africa
during the period 1985-1994 and the third largest recipient between 1995 and 2004[63].
9. In light of this, it would be easy to assume that aid has had a positive outcome in
the economic sense but in regards to being of benefit to the poor, the evidence is not so
clear.
10. According to the NGO CARE International, 80% of the population of the DRC
lives under the poverty line, the maternal mortality rate is 990 per 100,000, infant
mortality is 89 per 1,000 births, and the mortality rate in the under-5 years is 20.5%[64].
11. Statistics from the IMF show that school enrolment for children has decreased
from 22.5% in 1995 to 13.9% in 2001, that literacy rates have decreased from 67.3% in
1995 to 65.3% in 2001 and that currently 37% of the population have no access to
medical care[65].
12. In addition to this, only 2% of the population is employed compared to 8% in
1958[66].
13. The level of unemployment is of particular interest given the high levels of FDI
and ODA within the DRC.
14. A main problem that has plagued the DRC has been the lack of significant
infrastructure. Traditionally, aid has been provided to the country in return for access to
resources and the majority of the aid has been in terms of military arms and training from
Western governments, in particular from the USA.
15. Policies have been focussed on exploiting resources rather than promoting selfsufficiency. Western support illegal mining has meant that there has been limited
necessity to spend money on legitimate infrastructure, especially when most operations
are easier to disguise in the indigenous terrain.
16. Although it may be impertinent to blame aid for the problems facing the majority
of citizens in the DRC, the role of aid in the conflict cannot be ignored.

17. Over the past 5 decades, military aid has provided arms and training that has
jeopardised the work of humanitarian and development programmes.
18. While the rebels, elites and governments feud over natural resources and
ideologies, the poor suffer the inevitable consequences in relative silence.
19. However, it may be more accurate to find fault with the politics of aid rather than
aid itself.
20. As is usually the case, however, wherever there is money to spend, there are
people and policies to buy.
21. It is often the case that the intentions of Western governments are of greed
rather than empathy and of control rather than liberalization.
22. Aid is, in theory, supposed to help the most impoverished.
23. However, in practice aid does not benefit the poor: it benefits the elite minority
and the donors whilst exploiting the silent and powerless minority.
24. Economic progress in the DRC is arguably visible: external debt has decreased
and economic growth is apparent but the corruption and conflict that has been borne out
of this limited progress has ensured that the majority of the population do not share in
the progress.

Conclusion
The current system of aid is not helping to lift inhabitants of the poor world out of
the poverty trap that Sachs and other economists claim is holding them back from
prosperity. In cases such as the Democratic Republic of the Congo, foreign aid has
led to long term economic decline, civil war and regional conflict. In others it has
simply failed to have a positive effect on growth. There is hope for foreign aid if
governments and agencies strive to be more accountable and unified, but ODA is no
substitute for strong government and stable peace, nor can it match the positive
effects of free trade, FDI and micro-finance. By pressing on with an aid agenda that
is not working, Western organisations are prolonging the misery of the worlds poor.
Perhaps, then, it is wrong to applaud good intentions, when aid has proved itself to
be a misnomer.