Why Foreign Aid is Bad for Sub-Saharan Africa

 by Deborah Tesfamichael

Foreign aid can be split into humanitarian, financial and military aid. It’s often given to relieve crisis situations like a Tsunami or an epidemic like Ebola. In international relations, aid is – from the perspective of governments – a voluntary transfer of resources from one country to another. Therefore it’s unmistakably a moral imperative governments give away. However I rarely heard about any downsides, for example, when I was doing geography at GCSE. So I have decided to independently research this topic and focus mainly on Sub Saharan Africa. 

The first reason as to why foreign aid can be ineffective is because it’s a short term solution that indirectly breeds laziness and an unproductive economy. Foreign aid is often given to countries who are performing poorly and therefore can be seen as a reward or a form of a subsidy for their lack of responsibilities. Therefore there is a dangerous reliance that is introduced. In 1970, 10% of Africans lived in poverty whereas in 2009 it reached an astonishing average of 70% during the time where the aid model became so dominant. Foreign aid in this sense also doesn’t encourage any long term plans such as education and training which would tremendously help Sub Shara Africa. This is because by educating such a large young workforce, they can produce more goods and services in the future and increase their GDP. 

The fundamental piece of information that you need to know is that the majority of foreign aid is between leaders and not countries. This is why aid tends to flow from democracy to dictatorships, it likely stems from politics and not economic reasons. Politicians/governments are reliant on citizens to stay in power, a sort of social contact, this can be seen with regular elections. However in developing countries, the government are often corrupt officials that no longer require taxpayer money but instead foreign financial aid to fill their pockets. Therefore public opinion is irrelevant in this sense. Therefore foreign aid breeds dictatorships as aid reduces the leverage citizens have with the government. A great example is Congo who is a large recipient of American foreign aid, in 2021 they received $814 million. Sensitive financial documents proved the Kabila family (former presidents family) in 2021 extracted the nation's wealth for their personal benefit. Therefore you can see that foreign aid is inefficient because it mostly doesn’t go to the citizens of the recipient and alleviate any problems. 

Overall Foreign aid is efficient in lessening immediate suffering; however it is not the solution in the long-run and does not help provide a stable platform for these countries to sustainably develop. Instead Dr Dambisa Moyo who is a Zambian economist prescribes a 5 year plan to systematically reduce aid to these countries. This will allow the capital market to start funding themselves and allow governments in Sub Saharan Africa to pitch themselves to international investors, which will foreseeably allow them to raise money in the future.