Foreign aid, is the transfer and loaning of funds, international goods or services from one country to another. It is often transferred from one developed economy to another developing country. The main aims of aid, particularly in poor nations, are to alleviate poverty, give support to the needy such as internally displaced persons and refugees, reconstruct infrastructure, and revamp economy. However, the efficacy of aids for poverty alleviation in Africa has lost its objective. Since the 1950s, the idea that huge sums of donations can remedy poverty has dominated economic development discourses. More than half of the sub-Saharan Africa are poorer now than in the 1960s. I do not deny the fact that many factors have contributed to poverty in Sub-Saharan Africa which include natural disasters such as famine, draught, and wars. But what about the huge overflow of foreign aid they have been channeling to this developing countries? What did they use it for?
According to statistics, while progress has been made in other developing regions of the world, especially East Asia in the last six decades, the percentage of those living in extreme poverty increased in sub-Saharan Africa. Such statistics can be both appalling and at the same time overwhelming.
There are several reasons to why foreign aid is ineffective for poverty alleviation in Africa. The first reason is that poverty in African countries is not a vicious circle waiting to be broken by foreign assistance. Instead, poverty is created by economic institutions that systematically block the incentives and opportunities of poor people to make their lives better by themselves and their country.Â Let us for instance the system of apartheid in South Africa which Nelson Mandela campaigned against. In this situation, apartheid was a set of economic institutions which was intended to work against the black South Africans. It contained rules that governed and dictated to people what they should do and what they should not do, including the incentives and opportunities they are entitled to. In 1913, the South African government declared that 93 per cent of South Africa was for the ‘white economy’, while 7 per cent was for blacks (who constituted about 70 per cent of the population). Blacks had to have a pass – a national passport – to travel to the cities for job opportunities in the white-controlled mines and industries. They could not own property, nor start a business there. Such economic institutions, which we call ‘extractive’ sapped the God-given potentials and opportunities of the vast population of black South Africans and largely kept them in poverty. While the country was rich during this period, the wealth was in few hands and the majority were poor. As such, foreign aid would not remove such institutional violence that deprived the majority access to the national resources.
It should be noted that people in poor countries have the same ambitions as those in rich countries. Just like those from developed nations, people from poor nations also need freedom of accessibility to economic resources, to have the same opportunities and chances to good health care, clean portable water in their homes and quality education for their children. The reason to why the poor remain poorer is because their basic ability including their talents have been denied the opportunity to grow by their various institutions in those countries.
In Sub-Sahara African states, it is important to note that once you are wealthy, you are privileged because you are entitled to power while the poor on the other hand, are less privileged and at the mercy of those in power. By way of conclusion, the evidence from above examples and analysis have shown that poor people are trapped within extractive economic institutions and until these institutions undergo a radical reform, foreign aid and any development it seeks to achieve will only be a mirage, not only in Sub-Sahara Africa, but across all developing countries of the world.
1. Shah, Anup. “Foreign Aid for Development Assistance”. Global Issues: Sunday, September 28, 2014, http://www.globalissues.org/article/35/foreign-aid-development-assistance
.Â Daron Acemoglu and James A. Robinson. “Why foreign aid fails – and how to really help Africa.” The Spectator. January 27, 2014. Accessed February 04, 2017. http://www.spectator.co.uk/2014/01/why-aid-fails/.
. Fosu, Augustin Kwasi. 2015. “Growth, Inequality and Poverty In Sub-Saharan Africa: Recent Progress In A Global Context”. Oxford Development Studies 43, (1) (Jan 02): 44-59, https://www.lib.uwo.ca/cgibin/ezpauthn.cgi?url=http://search.proquest.com/docview/1680154815?accountid=15115 (accessed February 4, 2017).
. Ronci, Donatella. 1973. “Apartheid In South Africa: Exploitation and Superprofits”. La Critica Sociologica 25, (0): 117-128, https://www.lib.uwo.ca/cgi-bin/ezpauthn.cgi?url=http://search.proquest.com/docview/60911505?accountid=15115 (accessed February 4, 2017).