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Africans: “We need trade not aid”

January 6th, 2010 Posted in International Development by

dambisaAfrica remains the world’s poorest continent with the world’s worst employment opportunities. The International Labour Organisation estimates that up to 99 per cent of African employment is informal–outside of the fiscal system.

The situation is dire and imposes increasing  costs on taxpayers in donor states. In 2008 Labour spent £6.3 billion on Overseas Development Assistance and the Conservatives have pledged to increase this by almost £4 billion.

In times of economic hardship £10 billion spending pledges need to stand up to scrutiny. But this one does not. Four decades of development “assistance” and trillions of dollars in aid have done little to improve the situation in Africa. In fact, Africans are poorer now than they were forty years ago. Over 60 per cent survive on less than $1.25 a day, and one in four African children under the age of 5 are malnourished. Surely, by now it should be evident that this system of aid is not working? Money continues to be wasted on top down aid projects that, at best, do little to appease the underlying causes of the poverty. At worst they actually aggravate the situation by undermining local businesses and legitimising corrupt regimes.

There are a few dissenting voices. Outnumbered by well heeled NGO lobbyists, some economists are daring to incur the wrath of the Department for International Development’s (extensive) advocacy department and are speaking out. Articles like this recent editorial in the Kenyan Daily Nation reflect what many Africans are thinking; that freedom to trade is the surest route out of poverty. To borrow a phrase from another African tired of witnessing the futility of pumping good money after bad, Dambisa Moyo, “there is no doubt–we do want to help.” But help does not come in the form of DfID handouts; it comes from allowing Africans to do what has enriched the rest of the world–trade.

[For fuller accounts see ‘The White Man’s Burden‘ by William Easterly and ‘Dead Aid‘ by Dambisa Moyo – Ed.]

4 Responses to “Africans: “We need trade not aid””

  1. Jack Hughes Says:

    Why not just close down the Foreign Aid Department?

    People who want to send money overseas can give to charities. And it’s £7bn every year off the deficit.

  2. Frank H Little Says:

    There is still a place for aid – that is aid without strings – in crucial situations. But I agree that genuine free trade, eliminating the dumping of subsidised first-world produce, would do more than much mis-directed aid to African governments.

  3. tim leunig Says:

    Paul Collier’s book Bottom Billion is excellent for those who want an evidence based look at what works and what does not. It is also very readable

  4. Bishop Hill Says:

    I’d thoroughly recommend this book. DfID comes across as being a major barrier to improvement of educational provision in poor countries.