Overseas aid to Africa does more harm than good

Published: 25 Nov 2009

Overseas aid to Africa does more harm than good

Background

If foreign aid had been a major driver of growth, then Africa would have been a star performer. Between 1975 and 2000, aid to sub-Saharan Africa averaged $24 per capita per year, compared with $5 per capita for South Asia. Yet over this period GDP per capita grew by an annual average of nearly 3% in South Asia, compared with an annual average fall of 0.6% in sub-Saharan Africa.

Despite this failure, the West's prescription for Africa seems to be more of the same. Before the recession, at the Gleneagles G8 summit in 2005, Tony Blair and other world leaders pledged to give an extra $50 billion globally to double the level of aid by 2010, and agreed to cancel the debts of 38 of the world’s poorest countries.

Even during the recession, Gordon Brown has been adamant that there should be no cuts in the aid budget. His government plans to make a law which will ensure that the UK spends 0.7% of national income on aid every year from 2013.

But why should aid suddenly work now when it has failed to reduce poverty in Africa in the past? Is development aid actually an impediment to growth - a false form of generosity? Wouldn't the free market give Africa a better chance at prosperity than the interventions of foreign donors? Or is it just the way aid had been distributed, rather than aid per se, that needs reform?

download pdf Printer Friendly version