Sunday, February 6, 2011

Aid for Africa: End the Sick Cycle

When is everyone going to address the elephant in the room when it comes to the failure of aid to Africa?

African government regimes!!! The blatant corruption and flagrant disregard for their citizens is appalling, but what is worse is the complete lack of accountability when it comes to the shoveling of aid money directly into the coffers of these self serving governments, by the West.

Luckily Wikileaks did not spare Africa or the farse of the aid efforts in it’s recent exposures. In fact, some disturbing specific examples of how aid money goes into private pockets was highlighted.

British taxpayers should take a keen interest in the fact that over GBP20 million has been siphoned off of aid funds destined for peace keeping efforts in Sierra Leone and education in Kenya. Top ministers instead bought hordes of plasma televisions, rifles and thousands of other luxury items. Meanwhile the poor get poorer.

The most frustrating aspect of this story is that DfiD, the UK government’s development funding wing, is fully aware of the thefts, and believes that it is ‘within reason’. Within reason?! Is this what we have come to expect, rather nonchalantly from African leaders?

Isn’t that assumption inherently racist? Why do Bono and Bob Geldof spend hours in front of cameras in the West, appealing to the guilt in all of us, and expect zero accountability on the part of those who have the power in Africa?!

It is a blood boiling shame that aid has never had the aim of ending poverty or helping the powerless. It is an industry, a game that is played in huge nauseating circles, and success is measured in how many millions are spent on new Land Cruisers for the actual projects, and whether that number is higher than what the minister took for his private jet or holiday home abroad…. Germany recently took a stand, and held back their annual Euro200 million funding to the UN backed Global Fund Aids, TB and Malaria after a massive corruption scandal.

Given this sick cycle of corrupt fund transfers, I was pleasantly surprised to meet a representative in Ghana last week from the Acumen Fund. When I sat down at our pre-arranged lunch meeting, I had my suspicions, and expected another naïve, uninformed, overly trusting aid worker type, with a typical message of aid as the answer to Africa’s woes. Instead, I was intrigued and impressed. The Acumen Fund are a non-profit money lending organization that holds their recipients fully accountable for the loans they receive, and they are expected to repay over time, plus interest.

Finally, an idea that gives African entrepreneurs the respect they deserve, discourages the culture of begging and weeds out those who are just looking for another hand out.

The Acumen Fund has been extremely successful with this model in East Africa and India for years, and is just feeling the waters in Ghana. This will definitely be a new concept in a country which depends so heavily on grants and funding and even remittances from their citizens abroad.

One of Acumen’s success stories involves a Tanzanian who’s business plan was to manufacture bednets (to prevent malaria), which had previously been imported 100% from Asia. Currently 7000 women are employed in his factories – jobs which didn’t exist before – and he has fully paid back his loans with interest. He produces over 20 million nets a year and has become one of the largest employers in the region.

The money is always reinvested in new business plans. The Fund doesn’t stop there however, they recognize that due to the culture of poverty and hand outs, Africa has been left behind in entrepreneurial terms, and as such they recognize the need to train and mentor the business people they decide to support. This means the chance of success is far higher, and both parties stand to gain out of the partnerships.

These are the kinds of stories Africa needs. Not the headlines full of despots and dictators, rolling in dollar bills, burping, caviar breathed, and being fanned by servants, while the masses writhe like maggots in the shanty huts surrounding the palaces.

Aid must been seen for the cancer it is, and obliterated.

I just hope that more of the world starts to look at Africa and Africans as they would any other business partners. Able, accountable and ambitious.

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Mzungu said...

es Holli.. great post. I am a huge advocate of RBMS .. results based management systems - whereby accountability for aid is scaled on results. You cannot believe the counter arguments on this one.. We should not be making people dance for the money / Who are we as donors to demand to know where every dollar is spent? / When we donate, why should we expect to control (as in colonialism) the funding. And this is what I encounter in an academic setting. Booya for the entrepreneurs and the fact that this continent is filled with brains and venture capital beyond belief if allowed to flourish.

The pale observer said...

Mzungu - it's very interesting, the counter arguments. To me, they are inherently racist. Why should the west assume that Africa is a charity case full stop? Donor agencies should definitely hold the recipients accountable, if they respect them and hold them to international standards!

Glad you agree - we totally need more programs like Acumen that reward those who are dedicated to the upliftment of the continent and are willing to stand behind their own ideas!!!

Adrian said...

You do have to realise that part of the 'Aid Program' given out by DfID is 'jobs for the boys'. I was aware of one project some years ago valued at approx £11m, attracting an albeit negligible rate of interest which consisted of house hire, salary, air conditioned 4x4's, business class air fares, children's boarding school fees and expenses which eventually worked out to be £1m of assistance and £10m of cushy positions for jobsworths which the receiving country had to pay for.
Regarding the creaming off from donations I am also aware of a German grant to a Ghanaian university which came with a German expat who had to investigate, verify and sign off all the cheques for the amount donated and account to the German government that the money had been spent as intended.
The whole issue of overseas aid is a can of worms with corruption at both ends, not just the one!

krissy said...

I'm sure you know all about foreign affairs and CIDA and their role in paving the way for Canadian mining companies all over the world, but this was a good video addressing CIDA’s role in the global mining industry? (I get tired of the rich countries/poor countries language that Lewis uses here, because really we should be talking about rich people/poor people to have a sense of what's actually going on)

from this clip:

Avi Lewis: So beyond the World Bank what other mechanisms does the Canadian government use to assist corporations with foreign investments?

Karyn Keenan: [...]The Canadian International Development Agency is also active in supporting these investments, particularly in Africa, through a fund that was established quite recently, again they’re a direct equity supporter of those projects, and the Canadian Pension plan-

Avi Lewis: so that’s our international foreign aid being used to support Canadian corporations in poor countries?

Karyn Keenan: That’s right, it’s overseas development aid that’s being used to support our private sector.


I wish he had let her talk when she mentioned the Canadian Pension plan…it’s invested in mining, namely, Goldcorp and other regular suspects of global carnage, unbeknownst to most Cdn pensioners.

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