Challenging the Dependency on Foreign Aid

Foreign aid a tool of diplomacy, a noble cause that has done a lot of good, but giving and getting money can only feed the hungry and help the sick, it does not free people from institutions that make them hungry and sick. It does not free the poor from the system which deplete their opportunities and incentives, as aid can provide band-aid solutions to alleviate immediate suffering, but by its very nature cannot be the platform for long-term sustainable growth.

The most disheartening fact is that government’s critical social programs still depend on foreign aid and international partnership, at a Health PPP Conference (2014), former President Pohamba admitted that, “…over the years, donor health financing has been declining, and this impacts both the funding levels and the technical ability to deliver quality, effective accessible health care services.”This is proof that the aid system encourages governments to pick up the phone and ask the donor agencies for next capital infusion.

The idea that donations remedy poverty has dominated the theory of economic development and the thinking in many international aid agencies and governments ever since the 70’s, and when results questioned, all are negative. Yes, millions have moved out of abject and wretched poverty in the world over the past six decades, but that has had little to do with foreign aid, rather it was due to economic growth in countries of Asia that has received little aid. Moreover, poverty cannot be eradicated with more and more aid. For poverty is instead created by economic institutions that systematically block the incentives and opportunities of poor people to make things better for themselves, their neighbors and country at large.

Hence, foreign aid is not the answer to our continent’s economic and social troubles; and in fact, aid is a factor contributing to Afrika's underdevelopment woes. Aid dependency pulls entrepreneurship and intellectual capital into non-productive activities, thus foreign aid leads to the situation where we have failed to set our own pace and direction of development that is indeed free of external interference. International agencies, including the International Monetary Fund (2005) published a report; "Aid Will Not Lift Growth in Afrika." The report cautioned that governments, donors and campaigners should be more modest in their claims that increased aid will solve our problems. Despite these comments, no serious efforts have been made to wean us off.

Foreign aid has also unattractively contributed to negative investment, for no investor would want to risk money in a country that is unable to stand on its own feet and manage its own affairs in a sustainable way. While, Dambisa Moyo, an economic analyst and author of ‘Dead Aid; why aid is not working.’, opined in a subtle way, that the aid culture has left the rainbow continent more debt-laden, more inflation-prone, and more vulnerable to the vagaries of the currency market. It is also obvious that aid has been linked to rampant corruption. Aid flows destined to help the average Afrikan end up supporting bloated bureaucracies in the form of the poor-country governments. A radical pan-Afrikan activist, Mawuna Koutonin argued that “aid and humanitarianism is a humiliation for our people, our continent, and we should do our best to get rid of it as soon as possible, to recover our lost dignity.’’

In the final analysis, economies that rely on commitments of aid almost fail, and those that depend on innovation succeed. The latter is true for economically successful countries such as China and India, and even closer to home, South Afrika and Botswana. Their strategy of finance development, emphasizes the important role of entrepreneurship and markets, over aid system that preaches hand-outs. Governments need to attract more foreign direct investment by investing in education, creating attractive tax structures and reducing bureaucratic and complex regulations for businesses. We should also focus on increasing trade; China is one promising partner.

Making institutions more inclusive is about changing the politics of a society to empower the poor, disenfranchised and excluded repressed by monopolizing power. Again aid helps, but it just needs to be used in such a way to help civil society mobilize collectively, find a voice and get involved in decision making.
Another proposition is for all branches of government and civil society to reduce their budget, and finance dependency from foreign aid about 10 to 20% a year. And a review of effective dependency reduction and rehabilitation progress could be done yearly, with such a progressive system in less than 10 years, our country could get out of foreign aid dependency. Once this is achieved, only trade and diplomacy will be the philosophy of Afrika and Namibian foreign relationships. Ten years in the life of a state is not much, and courageous patriots would attain that goal even faster with discipline and consistency.


* Matheus Pendapala Taapopi is a 3rd year student studying towards a Bachelor of Public Management (Hons) at the University of Namibia. 

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