Aid for Africa: End the Sick Cycle

When is everyone going to address the elephant in the room when it comes to the failure of aid to Africa?

African government regimes!!! The blatant corruption and flagrant disregard for their citizens is appalling, but what is worse is the complete lack of accountability when it comes to the shoveling of aid money directly into the coffers of these self serving governments, by the West.

Luckily Wikileaks did not spare Africa or the farse of the aid efforts in it’s recent exposures. In fact, some disturbing specific examples of how aid money goes into private pockets was highlighted.

British taxpayers should take a keen interest in the fact that over GBP20 million has been siphoned off of aid funds destined for peace keeping efforts in Sierra Leone and education in Kenya. Top ministers instead bought hordes of plasma televisions, rifles and thousands of other luxury items. Meanwhile the poor get poorer.

The most frustrating aspect of this story is that DfiD, the UK government’s development funding wing, is fully aware of the thefts, and believes that it is ‘within reason’. Within reason?! Is this what we have come to expect, rather nonchalantly from African leaders?

Isn’t that assumption inherently racist? Why do Bono and Bob Geldof spend hours in front of cameras in the West, appealing to the guilt in all of us, and expect zero accountability on the part of those who have the power in Africa?!

It is a blood boiling shame that aid has never had the aim of ending poverty or helping the powerless. It is an industry, a game that is played in huge nauseating circles, and success is measured in how many millions are spent on new Land Cruisers for the actual projects, and whether that number is higher than what the minister took for his private jet or holiday home abroad…. Germany recently took a stand, and held back their annual Euro200 million funding to the UN backed Global Fund Aids, TB and Malaria after a massive corruption scandal.

Given this sick cycle of corrupt fund transfers, I was pleasantly surprised to meet a representative in Ghana last week from the Acumen Fund. When I sat down at our pre-arranged lunch meeting, I had my suspicions, and expected another naïve, uninformed, overly trusting aid worker type, with a typical message of aid as the answer to Africa’s woes. Instead, I was intrigued and impressed. The Acumen Fund are a non-profit money lending organization that holds their recipients fully accountable for the loans they receive, and they are expected to repay over time, plus interest.

Finally, an idea that gives African entrepreneurs the respect they deserve, discourages the culture of begging and weeds out those who are just looking for another hand out.

The Acumen Fund has been extremely successful with this model in East Africa and India for years, and is just feeling the waters in Ghana. This will definitely be a new concept in a country which depends so heavily on grants and funding and even remittances from their citizens abroad.

One of Acumen’s success stories involves a Tanzanian who’s business plan was to manufacture bednets (to prevent malaria), which had previously been imported 100% from Asia. Currently 7000 women are employed in his factories – jobs which didn’t exist before – and he has fully paid back his loans with interest. He produces over 20 million nets a year and has become one of the largest employers in the region.



The money is always reinvested in new business plans. The Fund doesn’t stop there however, they recognize that due to the culture of poverty and hand outs, Africa has been left behind in entrepreneurial terms, and as such they recognize the need to train and mentor the business people they decide to support. This means the chance of success is far higher, and both parties stand to gain out of the partnerships.

These are the kinds of stories Africa needs. Not the headlines full of despots and dictators, rolling in dollar bills, burping, caviar breathed, and being fanned by servants, while the masses writhe like maggots in the shanty huts surrounding the palaces.

Aid must been seen for the cancer it is, and obliterated.

I just hope that more of the world starts to look at Africa and Africans as they would any other business partners. Able, accountable and ambitious.

Bono, Angelina and the Hollywood Causes Brigade - Watch Out!

Finally a voice is being heard, speaking out against Aid to Africa, and against the trivialization of Aid through the Hollywood circuit. And this time people will listen because it is an African voice. I read with interest in the Sunday Times Magazine a few weeks ago, and again last week about the upcoming release of the book ‘Dead Aid’ by Zambian Lawyer Dambisa Moyo. Some out there in the blogosphere, like Africa Unchained also highlight the issues, and wrote THIS excellent post highlighting Moyo's point of view. Angel at Woman Honor Thyself has a pretty strong view as well... have a read!

I have been sounding off for years about everything from the pathetic Aid campaigns headed up by ‘Bono and the league of Hollywood Heros’ to the MAC AIDS fund, with spokespeople L’il Kim and Mary J. Blige, and the warm fuzzy feeling it gives girls to buy $20 fire engine red lipstick for their crazy boozy nights on the town, while still feeling like they’ve done their bit to ‘help the poor in Africa’.

All my cynicism is highly disregarded as the jaded perspective of a long term expat, and the complicated issues are glossed over by most. The truth is that Aid does not work. It is an industry that perpetuates itself with no end and no solution in sight. I am so happy that an African scholar has vocalized the issues and hasn’t been shy to point the finger at the culprits as well as looking at viable solutions for Africa – from within.

Below is an interview and an excerpt from Moyo’s interview with the New York Times:



Q: As a native of Zambia with advanced degrees in public policy and economics from Harvard and Oxford, you are about to publish an attack on Western aid to Africa and its recent glamorization by celebrities. ‘‘Dead Aid,’’ as your book is called, is particularly hard on rock stars. Have you met Bono?
A: I have, yes, at the World Economic Forum in Davos, Switzerland, last year. It was at a party to raise money for Africans, and there were no Africans in the room, except for me.

Q: What do you think of him?
A: I’ll make a general comment about this whole dependence on “celebrities.” I object to this situation as it is right now where they have inadvertently or manipulatively become the spokespeople for the African continent.

Q: You argue in your book that Western aid to Africa has not only perpetuated poverty but also worsened it, and you are perhaps the first African to request in book form that all development aid be halted within five years.
A: Think about it this way — China has 1.3 billion people, only 300 million of whom live like us, if you will, with Western living standards. There are a billion Chinese who are living in substandard conditions. Do you know anybody who feels sorry for China? Nobody.

Q: Maybe that’s because they have so much money that we here in the U.S. are begging the Chinese for loans.
A: Forty years ago, China was poorer than many African countries. Yes, they have money today, but where did that money come from? They built that, they worked very hard to create a situation where they are not dependent on aid.

Q: What do you think has held back Africans?
A: I believe it’s largely aid. You get the corruption — historically, leaders have stolen the money without penalty — and you get the dependency, which kills entrepreneurship. You also disenfranchise African citizens, because the government is beholden to foreign donors and not accountable to its people.

Q: If people want to help out, what do you think they should do with their money if not make donations?
A: Microfinance. Give people jobs.

Q: You just left your longtime job as a banker for Goldman Sachs in London, where you live. What did you do there, exactly?
A: I worked in the capital markets, helping mostly emerging countries to issue bonds. That’s why I know that that works.

Q: Which countries sought your help?
A: Israel, Turkey and South Africa, primarily.

Q: Why didn’t you get a bond issue going in your native Zambia or other African countries?
A: Many politicians seem to have a lazy muscle. Issuing a bond would require that the president and the cabinet ministers go out and market their country. Why would they do that when they can just call up the World Bank and say, “Can I please have some money?”

Q: I keep reading about a new crop of African presidents who are supposedly free-market guys, including Rupiah Banda, the president of Zambia.
A: There are lots who are nominally free market, but they haven’t been aggressive about implementing those policies.

Q: What do your parents do?
A: My mother is chairman of a bank called the Indo-Zambia Bank. It’s a joint venture between Zambia and India. My father runs Integrity Foundation, an anticorruption organization.

Q: For all your belief in the potential of capitalism, the free market is now in free fall and everyone is questioning the supposed wonders of the unregulated market.
A: I wish we questioned the aid model as much as we are questioning the capitalism model. Sometimes the most generous thing you can do is just say no.