Tuesday, 26 March 2013

Myths About Africa: Dead Aid by Carly Pain

Kente cloth weaver--an important Ghanaian cultural industry


In Canada, I often hear phrases such as “help the starving kids in Africa” or “Africa needs your help.” I turn on the TV and see the faces of extremely malnourished children with the voice of a woman telling me that I have the ability to save their lives. I turn on the radio and listen to someone tell me that by donating only twenty dollars a month, I could send a child to school. This made me believe that I would be overwhelmed and constantly surrounded by the extreme poverty in Africa, which could only be solved by foreign aid. After my first month here in Ghana, I realize that the issues are much more complex.  One area of complexity is whether the aid occurs at a micro or individual level, at a community level, or at a national level.   I have also begun to realize that there are both pros and cons associated with foreign aid. While I have started to believe that in some ways the cons outweigh the pros, it is important to recognize that foreign aid does in fact have benefits. Unfortunately, these benefits only seem to be short term.

One example of a micro-level aid stems from our experience in Ghana.  Our nursing group brought a plethora of medical supplies to 37 Military Hospital, which will benefit the patients for the time being; however, when these supplies run out, they have made no progress on increasing their medical supplies for the long run.

            In contrast, our faculty has been associated with longer-term community aid. Since 1999, the University of Alberta Faculty of Nursing and University of Ghana School of Nursing have had a partnership resulting in numerous collaborative research projects and education initiatives. This began when the University of Alberta Faculty of Nursing received Tier II CIDA project funding to develop a graduate education program for the University of Ghana School of Nursing. University of Alberta students now have the opportunity to do their final clinical nursing course (N495) in Ghana.  It was one of the early N495 nursing groups who helped create a nursing clinic in a small, northern village in Ghana called Apemanim. This clinic has increased the availability of health care in the village leading to overall improved health. Most importantly, the clinic is still running with a staff of six nurses.

            The cons of national-level foreign aid are outlined by a book written by Dambisa Moyo called Dead Aid.  In what has been a somewhat contentious publication, Moyo argues that Africa has been addicted to aid for the last 60 years because they are continuously just being fed aid. Consequently, African governments now acknowledge foreign aid as a permanent source of income. According to Moyo, 13% of the GDP of the average African country comes from foreign aid. For example, aid is the source of 97% of the Ethiopian government’s budget. With this amount of aid, governments loose the incentive to generate internal revenue through business development or taxation. Consequently, there is a sparse amount of natural checks and balances between governments and their people.

Moyo makes two points regarding the limitations of foreign aid. The first is that foreign aid increases the amount of resources available for unstable governments to fight over, leading to social unrest and possibly even civil war. Secondly, aid reduces the need to generate savings and investments. Due to a decrease in savings, banks have limited money to lend for domestic investment, and private investors are less likely to invest in a country that is dependent on aid.

Moyo elaborates on two major problems created by foreign aid: inflation and a struggling domestic sector. Inflation is a vicious cycle created by aid being pumped in by a variety of foreign sectors. Domestic policy makers raise their interest rates, which discourages investment. This creates fewer jobs, leading to an increase in poverty, consequently ending with more aid. Second is the issue of the domestic sector. If a developing country experiences an influx of foreign capital, their currency is likely to strengthen on the global market which in turn causes a decrease in exports. Ultimately, this suffocates the country’s long-term growth.

            Moyo is highly critical of foreign aid campaigns targeting those who are unaware of the positive aspects of African countries and that only see Africa as hopeless and helpless without foreign intervention. Moyo’s primary solution is to finance economic development. As it stands right now, there is no incentive to discover possible ways to finance an African country’s long term development yet there are options available, such as foreign direct investment and accessing debt markets.  We are aware of increasing sophistication in the design and implementation of micro financing programs (Adjei, 2010).  Perhaps this is where economic growth can grow. 

            As Moyo argues, Africa has the potential to thrive through the resources available, the resiliency of their people, their education, and so much more. All they require now is for foreign countries to let them.

References
Adjei, J. K. (2010).  Microfinance and poverty reduction:  The experience of Ghana.  Accra, Ghana:  BOLD Communications.

Moyo, D. (2009). Dead aid. Vancouver, BC: Douglas & McIntyre. 

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