Aid’s ineffectiveness and the experience of development cooperation in Africa

 It is no more news that aid to developing countries over the past half century has added up to one trillion USD. Despite this, seeing it as a poverty panacea has fallen far from expectations. This has raised eye brows. Thus, the eradication of poverty through foreign aid has been nursing growing concern. Looking at the trillion of USD being pumped into Africa, there is still little or inadequate results to show over the past half century. The result is what can be termed “shifting the blame”. While recipient countries point accusing fingers on donors, donors also questioned the absorptive capacity of recipient governments.

 The Paris Declaration emphasizes on the effectiveness of aid, while the Accra Agenda for Action, AAA, was drawn up in 2008, building on the commitments agreed in the Paris Declaration. Not with standing these commitments therefore, Professor Jeffrey Sachs looks at aid effectiveness in Africa with an insight, postulating that for it to meet the expectations of the Paris Declaration, increasing aid effectiveness will therefore requires a strong will on the part of donors and absorptive capacity from recipient countries.

When we look at how aid is being given by donors to developing countries especially African countries, we realize that so many factors play diverse instrumental roles. These factors do not lay emphasis on the interest of the aid per se, thus portraying lack of strong will to eradicate poverty by the donors. Some of these factors are economical, political and security related.

First and economically, most donors give aid with lots of conditionality, coupled with their economic interest at stake. This down plays the economic impact of aid to construe economic development on the recipient country. We therefore see a lack of strong will on the part of donors to set the ball of aid effectiveness rolling. For instance, the government of Japan has given government to government aid to Cameroon in the form of constructing schools and hospitals. But when we look at the terms, we see lack of strong will manifested by the Japanese government to uplift Cameroon from poverty through good health and education. First, the contract was awarded to a Japanese construction company, with labor coming from Japan. It must be noted here that Cameroon has real estate construction companies that can also handle such contracts. More so, it gives no room for the Cameroon government to look for other cheaper and qualitative construction companies, leaving us with no competition in the supply of tenders.

Second, when we look at the political interest of some donors in developing countries especially Africa, we clearly see a  high manifestation of lack of strong will by these donors, to uplift Africa from the doldrums of poverty to something closer to the western standards. It is no news that foreign aid has for some times in Africa been used as a smoke screen to destroy a political ideology contrary to that of the World’s major powers. The political instability in Angola, some years back, is a clear example. We see what could be termed America’s manipulation of Jonas Savimbi. Those of Patrick Lumumba and the Congo Crisis are instances where foreign aid was being used as a means to frustrate a political ideology, rather than to spur development and alleviate poverty. Recently, the president of Rwanda, in condemning the way aid works in Africa draws his inspiration and worries from the Rwandan Genocide. His Excellency, Paul Kagame, made it clear that the international community, which he attributed to donors, abandoned Rwanda during the Rwandan Genocide, when they much needed the so called rich world. He uses this as a justification for his praises over Dr Moyo’s “Dead Aid”, where she vehemently calls for a stop in flow of government to government aid to Africa.

Finally, if we look at the trade rules, we can be forced to draw a conclusion that donors are out to defend their home companies and expand their markets in Africa and other developing countries, using aid as a spring board. This is because trade rules are still weighing down on developing countries despite numerous calls for its review and donor countries companies still continue to use Africa as a testing ground for their products. A practical example to justify this is the Green Energies (LCC), which is an energy company manufacturing and distributing solar products. Its head quarters are in United Kingdom with subsidiary companies around the world. This energy company masterminded a project termed ‘lighting up Africa’, in Tanzania, which helps rural villages in Tanzania light its paths and homes at night and also produce solar power light that villagers can build themselves. What is so frustrating here is the fact that Green Energies (LCC) is only using Tanzania as an experimental ground for its products and also to expand her new markets in Africa. This therefore does not only portray its profit motive but makes sustainability unasserted since her major objective is not to join in the fight for the eradication of poverty in Africa.

On the other hand, we can also admit that there is highly the lack of absorptive capacities on the part of recipient countries. It is a truism that this is a major attribute to aid ineffectiveness. Most African countries lack the ability of receiving aid and using it effectively. This is highly manifested through mismanagement, corruption, bad governance and inadequate accountability.

 Mismanagement involves the inability to properly use the foreign aid, control and put forward personnel who can carry out the task. This is a common normality with many African governments. Sometimes, the aid is deviated. For instance, the Cameroon government receives aid from the US and other donor agencies for the construction of a deep sea port along the coastal city of Limbe, in the South West region of Cameroon. But due to political and regional favoritism, the government of Cameroon deviated the aid for the construction of a sea port, this time in the Southern region of Kribi, which do not possess the same natural qualities like that of Limbe but simply because the President is coming from this part of the country.

  Another important factor is that of corruption. Most African governments are very corrupt and selfish. Some times, they put forward their personal interest before that of the country. This makes it very difficult for the use and inflow of aid to be effective. In November 1991, for instance, donor community suspended more than 250million USD in balance of payment and budgetary assistance to Kenya, stating that the government of Kenya failed to follow through on promises to reduce corruption and improve its human rights record. In Cameroon, the former Minister of Finance, Mr. Polycarp Ababa, was arrested for embezzling more than 40million USD.

   There is also the issue of bad governance and lack of institutionalization. This is very vital for effective inflow and use of aid. Where good governance principles are absent, it becomes almost impossible for the effective utilization of aid. Zimbabwe, for instance is one of the countries with very low good governance records. The government some years back suspended all the activities of non governmental organizations and off lifted it only after the presidential elections but with food aid shortage of close to 7million people. The impact was horrible and scandalous, inflation hits the worst rate that has ever happened to humanity, and there was a fall in economic growth, while unemployment rate was close to 80 percent. It is therefore very difficult to eradicate poverty in such a tense community, not with standing the amount of money pumped. Recipient governments hardly give accurate account on how they use aid money. This makes it impossible to improve on aid effectiveness through cost minimization.

Despite the above submissions, we can also put forward that two independent factors also hinders aid effectiveness in Africa.

First, geographically, it is very difficult for aid to create a strong impact in Africa. We see very limited ports linking finished products and exportation means, while part of Sub Saharan Africa has been held hostage by the Sahara desert. Also, inter tribal wars have continuously portray a vivid scenario of a tense environment. In Ivory Coast, we here of “ivorite”, in Kenya we saw one of the most horrible tribal clashes during the post election period, while we find it difficult to make the Rwandan genocide history.

Second, a look at most African economies Vis a Vis major developmental theories, clearly show case that aid cannot work this way. Let’s take as example the Dependency and Specialization theories. These theories require Africa to specialize on raw materials, but looking at most African economies, we see that agriculture is the back bone. In Cameroon for instance, agriculture constitutes up to 70 percent of the economy. On the other hand, rich nations continue to subsidize their local farmers. EU provides a daily subsidy of 2.7 USD per cow and Japan provides three times more, but according to the Human development Report 2003, in 2002, the average daily cow in the EU received 913USD in subsidies, compared with an average of 8 USD in per person in sub Saharan Africa. How can Cameroonian farmers therefore with stand competition from these farmers? How can aid work this way in a country where specialization is a negation? Why can aid not be geared in the form of subsidies to give African farmers the power to with stand competition? These are some of the questions that need to be addressed if we really have to forge ahead.

 In order to improve the effectiveness of aid, the following suggestions must be duly considered;

Firstly, it must be noted here that global economy reforms have long been over due. Removing those resources which are essential to life from corporate control and allowing the global public to share them according to need can create a more sustainable economic globalization. Thus, for reforms to happen; the global public must demand it and politicians must represent the interest of the public, not corporations.

Secondly, to be successful, international engagements must shift from conditionality to selectivity in foreign assistance. In many cases, international lending for instance, conditionality has been ex ante with governments promising policy reforms in exchange for foreign aid. As a result, donors, not governments ‘own’ reforms. A better approach is to dispense aid selectively to reward, deepen and thus preserve and consolidate reforms that a country has already begun to implement according to its own design. Selectivity therefore focuses aid on good performer’s countries that have reasonable good policies.

This too can only provide good results if donors improve on their strong will to develop and eradicate poverty in Africa and other developing countries.

Thirdly, international trade rules must be scrutinised.This is because free market advocates insist that effective poverty reduction can only occur if developing countries open their markets to global trade. However, the modern trade system is biased against low income countries. Rich nations currently subsidize their industries to the tune of billion of USD. More so, developing countries should not be pressurized to concentrate efforts on specialist exports in order to maximize income and fuel growth. This is because since the IMF, WORLD BANK and WTO started pressurizing developing nations, the implications have been scandalous. For instance, Indonesia was rated among the top ten exporters of rice before WTO came into effect. Three years later, in 1998, Indonesia emerged as the world’s largest importer of rice. African counties can no longer rely on raw materials and specialization.

     Also, aid should be directed towards developing capacity building and information technology in Africa. Korea has very little in terms of natural resources, but Korea has been able to develop her human resource and information technology industry to emerge as one of the World’s leading and fast growing economy within a very short period of time. We have potentials and natural resources in Africa, why can’t Africa develop its human resources to match and meet up with these challenges?

   Finally, there is the need to make developing countries to spear head aid management, in the form of local ownership. Local ownership if well coordinated can really make a positive impact in aid effectiveness.

   In summation therefore, not with standing recipient governments lack of absorptive capacity, international trade is currently neither free nor fair since the policy frame work and institution of the global economy is primarily determined by donor countries. International cooperation must replace self interest and competitive practices. Sustainable poverty reduction through aid requires high level of strong will and absorptive capacities. Aid should be directed where there is dying need. Was there any need for US aid to countries like Israel? Not at all. Obama’s government has been for in support of aid to Pakistan to fight terrorism but the Pakistani government rather prefers capacity oriented aid. Paul Kagame of Rwanda is calling for short and precise aid that can serve as breading grounds for development and also give room for African countries to be creative. I must conclude that it is high time developing countries become master of their own destiny, be bold and manifest absorptive capacities.

          Edwin Ngome