Highlight 11/2022 – A Beggar never grows up
Kodzovi Medzinyuie, 16 March 2022
Source : https://pxhere.com/en/photo/790616
A Professor of Political Economy at the University of Lome once indicated: “The turnover of the French company Air France is higher than the gross domestic product of all WAEMU States[1] put together”. How could it be that the money made by a company not ranking in the top 100 biggest global companies is higher than the GNP of eight African countries? This situation is not surprising in Africa where, many decades after independence, no country except South Africa can be proud to have exited underdevelopment.
Yet, conscious of the major asset that the African continent represents today, the world’s great powers, and even the emerging ones, are wooing it in many ways. African countries have been approached by the European Union, the US and Japan etc. Several encounters have taken place between them so far. Now, China, Russia, Iran, Turkey and even Israel as well have entered the arena.
In order to understand the deterioration of the socioeconomic situation in African countries, a look at the structural adjustment programs, driven by the World Bank and the International Monetary Fund around 1990, is necessary. The main measures of these programs were along the lines of currency devaluation, public spending cuts and wage freezes. According to statistics from the United Nations Economic Commission for Africa (ECA), between 1987 and 1988, sub-Saharan countries that undertook a full adoption of these programs experienced an average negative GNP growth rate of -0.53%. Employment levels fell by 16% while real wages fell by 30%[2]. This led to some of the worse crises on the continent and the opening of a pandora box that for decades has been impossible to close. Many countries were then obliged to stretch their hands to foreign States, seeking assistance.
Nowadays, public development assistance takes many forms. It can be a pure pro Deo donation or a preferential loan, which means a loan granted at a preferential interest rate. It can be bilateral in case it is granted directly to the country without any intermediate or multilateral when it is provided to the beneficiary State through contributions to the programs of International organizations. However, all these forms of public assistance have not yielded the expected fruits. Approximately 1,000 billion dollars have been spent for that purpose since the 1960s but these funds couldn’t enable Africans to really improve their condition. This is why the Zambian economist Dambisa Moyo in his book “Dead Aid”, published in 2009, advocated for a gradual abandonment of this development assistance.
The effects of this foreign public aid are, inter alia, the corruption of political leaders and the indebtedness. In addition, conditionalities attached to it, such as that of greater budgetary rigor and better governance, finally deteriorated the beneficiary countries economies and accentuated the western paternalism in Africa. That is why African States, at one point, have to take courage and get rid of these dead aids as the aforementioned economist called them.
It is obvious that Africa will never get developed with public assistance aid. We should look at the example of Asia where poverty rate has dropped in its largest countries such as China and India. Yet, these countries receive no or few public aids. Meanwhile, poverty has increased and reaches 34 percent of African population[3]. African people, turn your back to foreign assistance and stop begging because it will never make you grow up!
Kodzovi Medzinyuie, Highlight 11/2022 – A Beggar never grows up, 16 March 2022, available at www.meig.ch
The views expressed in the MEIG Highlights are personal to the author and neither reflect the positions of the MEIG Programme nor those of the University of Geneva.
[1] WAEMU (West African Economic and Monetary Union) assembles West Africa CFA zone countries which are Benin, Burkina Faso, Guinea-Bissau, Ivory Coast, Mali, Niger, Senegal and Togo.
[2] UNESCO, Effects of structural adjustment on education and training, 1995, p.3 available on https://unesdoc.unesco.org/ark:/48223/pf0000101342
[3] According to the data provided by UNCTAD as of 2019.