The Aid To Africa Dilemma
Major world powers such as the U.S. and other nations including China are continuing to step up their aid to the African continent. In fact, the Obama Administration may even double aid to Africa. However, some like Zambian economist Dambisa Moyo paint a very bleak picture of what little good so much aid to the African continent has actually achieved so far. In fact, although billions of dollars of aid from around the world has flowed into African states, as a whole Africa is even poorer now than in the 1970's.
Certainly drought conditions in some nations, as well as the AIDS epidemic which is ravaging Africa has had huge economic consequences. However, many states haven't developed much local industry or employment after decades of foreign aid. And in some states such as Ethiopia, 90% of the government budget still comes from foreign aid, where only 10% of the funds come from any local revenues by harnessing natural resources or other revenue means.
Economist, Dambisa Moyo argues in her book, DEAD AID, that African states need to sell bonds and engage in other economic development projects and foster more trade with developing nations such as China or India. Certainly foreign aid has helped to build clean water projects or provide electricity to some areas. However, the political environment in many parts of Africa including dictatorships or guerrilla wars makes economic development very difficult.
A good example of the problems with providing a stable business environment is the Ivory Coast which may provide up to 90% of the world's cocoa supply that produces chocolate including candy bars. A war between the government and rebel fighters forced thousands of French soldiers and thousands of UN peacekeepers to attempt to keep a peace good enough that some cocoa supplies could continue to the world which would provide badly needed funds to maintain a government and some basic services of some type. However problems such as child labor are still rampant in this state, and the level of political violence has really limited the ability of this country to proper.
Many African states are also ruled by bad governments such as dictatorships. However, In Somalia, no real government even exists at all. Rival war lords vie for power in this state and make the nation way too unstable to develop any sort of viable economy.
The fact of the matter is that some nations such as those in Asia and in India are in the process of building huge economies. At the same time, Africa lags far behind. Even at one time, the old Soviet Union had hoped to expand Communism throughout Africa and create client states such as in Angola, but despite pouring a great deal of money into the country, the nation never really developed. During this past decade it has been reported by the World Monetary Fund that as much as $4 billion in oil revenue might have been stolen due to government corruption as well in Angola.
In an effort to help to control the AIDS epidemic in Africa, the Obama Administration will stop purchasing some Alabama produced condoms that cost 5cents each and buy cheaper ones from China costing 2 cents each. An interesting story because it involves outsourcing American jobs on one hand which will result in lost American jobs, yet will provide more condoms for lower cost. Yet, I don't know if condoms are an area where you want to save money over better quality.
But as a sober whole, the world community hasn't really achieved very much positive for the economic situation in most of Africa for all of the aid offered. Maybe the best hope is for businessmen from a developing nation like China to educate these countries how to take a poor nation and build a viable economic environment.
The Western world community will continue to provide aid to Africa because of the guilt over the serious poverty on the continent. But this continent really needs much more than just guilt driven giving. Africa needs a real viable plan to industrialize and to provide basic services as to combat the AIDS crisis among other major challenges.