History of Foreign Aid in Africa

Turning on the Lights:  A Short History of Foreign Aid in Africa

Robert Calderisi

This paper is an overview of past foreign aid efforts in Africa, with suggestions for improvement.  Based on 30 years of professional experience in international development with the Canadian government, the OECD, and the World Bank, the paper is adapted from a chapter of the author’s book The Trouble with Africa: Why Foreign Aid Isn’t Working (Palgrave Macmillan, March 2006 --Yale University Press (UK), July 2006.)

I first heard of the Mufindi project in December 1976 in the lobby of Dar es Salaam’s Kilimanjaro hotel.  I had just arrived in Tanzania to work at the Canadian embassy and was being evicted from my room, as my reservation had run out and the hotel was fully booked.  Or so I was told.  At the reception desk, I noticed a familiar figure at the other end of the counter, just off the plane from Washington with his shirt hanging out of his jeans.  It was Jim Adams, the World Bank’s loan officer for Tanzania.  “Hello, Jim,” I said rather cheerfully.  When I asked what he was up to, he said he was checking in. “They’re full,” I replied.  “I know,” he continued, “but the manager’s a friend of mine, and he’s just kicked someone out for me.”  I kept my composure and asked the purpose of his visit.  From his back pocket, he pulled out a hand-scribbled design of the Mufindi plant.

           It was a $200 million proposal to build a pulp and paper factory near timber plantations in the southwest that had also been financed by the World Bank.  The logic was appealing enough.  Given Tanzania’s firm commitment to universal primary education and its fast-rising population, the country would need a growing supply of textbooks.  Why import the paper when it could be produced locally?  But there was a yawning gap between theory and practice.  The investment was so large and the technology so advanced that no one, including the Tanzanians, believed they could manage it themselves.  Technical assistance was planned, but it was not included in the project budget.  If it had been, the costs would have outweighed the expected benefits and the project would not have been approved by the World Bank’s Board of Directors.

           Even without the technical assistance and despite very generous assumptions, the project barely paid for itself.  Three years later, with the factory about to open, the World Bank proposed another loan of $20 million to operate the plant.  In narrow financial terms, the project now looked “economic,” as the $200 million already invested were considered a thing of the past and assigned no financial value.  All future benefits were weighed against the additional $20 million, rather than the total cost of the plant.  The safety valve was to be the export market.  If Tanzania could not absorb the full production of the plant, the surplus would be shipped to India – one of the largest markets for paper in the world.  Unfortunately, India itself was already a large producer, and transport costs would make Tanzanian paper very expensive.

           By then, I was the World Bank’s loan officer for Tanzania in Washington, DC, and believed the project should be abandoned.  My division chief thought the same, and his boss did, too.  But the Bank’s senior management felt the institution had got Tanzania into this situation and could not walk away from it.  The Bank’s Board approved the technical assistance but, even with it, the project never worked. Conceived at a time when state industries were still considered respectable, even at the World Bank, and financed with “hard” money, that is, the Bank’s own borrowed funds, the Mufindi pulp and paper project entered the lore of foreign aid “white elephants.”  With the possible exception of iron and steel mills in Nigeria (most of which never saw the light of day), there cannot have been worse investments in all of Africa.  And Tanzania paid the bill for this foolish experiment for the next 20 years.

           At the time, there was strong interest in cracking open the narrow options that African countries faced.  Before the phrases had even entered the business school lexicon, aid officials were trying to “think outside the box,” use “stretch” objectives, and launch “big ideas.”  Like other aid officials, I wanted Tanzania’s strategy to work.  I even recommended that Canada participate in the pulp and paper project; fortunately, in Ottawa, saner spirits prevailed.

One would think that a paper mill would do some good -- creating jobs and avoiding unnecessary imports -- or that helping poor countries would be as easy as fishing in an aquarium.  In fact, helping other nations successfully can be like looking for pearls in a murky sea.

            Take an example from another continent.  In the 1980s, the World Bank spent hundreds of millions of dollars helping to “improve” urban slums in Indonesia.  The objective?  To introduce modest changes like rubbish removal, street lighting, and storm drains that would make these poor neighborhoods safer and cleaner.  The result?  Poor people were pushed out by rising rents.  The reason?  Access roads intended for garbage trucks proved just large enough for sedan cars, allowing better-off people to buy the ramshackle dwellings, improve them, and lease them to higher-income tenants.  The law of unintended consequences operated superbly.

            The difficulty of providing effective aid is not a reason for not trying.  The most elementary case for foreign aid is founded on familiar Judaeo-Christian values.  With two billion people in the world -- a third of all humanity -- living on less than $2 a day, how can the affluent begrudge a portion of their wealth to help others?  Can Americans or Germans or Italians truly be said to prosper until Indians and Brazilians and Nigerians are also making steady economic progress?  This notion of equity also underlies familiar aspects of internal economic policy in developed countries, such as the progressive income tax, unemployment and other welfare programs, and regional development schemes.

There is an economic case for foreign aid, too, best expressed in the establishment of the World Bank in 1946.  The International Bank for Reconstruction and Development, as it was then called, was set up to promote the continued expansion of world trade after World War II.  Its purpose was not charity but self-interest.  Rebuilding the war-battered economies of Germany and Japan and helping other much poorer countries climb the economic ladder were seen as fundamental to ensuring global prosperity.  Everyone was expected to benefit from the process:  Rich countries would have ready markets for what they already produced, while poor countries would supply raw materials and eventually move into light manufactures (such as shoes and textiles) as richer countries shifted into more sophisticated products (appliances, electronics, and eventually computers).  The logic of enlightened self-interest also inspired so-called tied aid for capital projects such as roads and power plants, using experts, construction companies, and equipment manufacturers from the donor country.  Tied aid is now out of fashion, as it is particularly wasteful and inefficient, but it dominated international assistance from the 1950s through the 1980s.

Aid can also appeal to other aspects of self-interest.  Sharing may make us more secure.  In the late 1970s, the hard-driving president of the World Bank, Robert McNamara, insisted that foreign aid (about $50 billion a year) was a better investment in international security than the $400 billion spent on the arms race.   More recently, it has been argued that poverty is the breeding ground for mass migration, disease, and terror, and that we ignore it at our peril.

Despite such reasoning, foreign aid has remained stagnant over the last 30 years and, measured by what it can buy, it has declined considerably.  Only five countries (Denmark, Luxembourg, the Netherlands, Norway, and Sweden) have met the United Nations’ target of providing 0.7 percent of their gross national income in aid to poor countries.  The United States has never spent more than one quarter of one percent of its national income on foreign aid, and two thirds of that has been devoted to just two countries: Israel and Egypt.  As other regions have become more self-reliant, about half of the world’s aid has been directed to Africa.  A dizzying series of international meetings and task forces, including UK Prime Minister Tony Blair’s Africa Commission Report in March 2005, have called for higher spending, but these appeals have collided with mounting public skepticism about the lasting effects of aid.

Thirty years ago, it was easier to demonstrate the benefits of economic development, and – by implication -- foreign aid.  Between 1950 and 1975, life expectancy in poor countries rose by fifteen years -- from 35 to 50.  Adult literacy increased from 30 percent to more than 50 percent in some countries.  Access to health services, schools and clean water also improved.   But debt crises in Latin America and poor policies in Africa made the 1980s a “lost decade” for progress in the world, and in Africa the 1990s were also lost.   By the end of the century, the most populous countries on earth, China and India, were charging ahead on the strength of domestic demand, strong exports, private investment, and normal borrowing rather than foreign aid.  The extent of the transformation is difficult to encapsulate, but one eloquent measure was the rapid growth of China’s foreign reserves.  In the mid-1990s, stewards of the world’s aid budgets were wondering how they could continue to justify providing grants to an economy holding over $45 billion in its central bank.  By mid-2005, China’s foreign reserves had reached $700 billion.

Elsewhere in East Asia, smaller countries had demonstrated the power of good economic policies, solid public finances, low inflation, and clear investment rules.  In 1960, South Korea was as poor as Ghana; 30 years later, it was rich enough to offer aid to Africa.  Hong Kong, Malaysia, Singapore, Taiwan, Thailand, and, more gradually, Indonesia joined the group of “newly industrializing” countries.  By the 1980s, it was trade, not aid, that was causing these economies to bloom.  While its foreign aid budget was small, the United States was running some of the largest trade deficits in its history and importing 40 percent of what East Asia produced.  Imports of cheap electronic goods, clothing, and other light manufactures kept inflation low in the United States and improved the general standard of living, while creating hundreds of thousands of jobs overseas.  East Asian economies, in turn, became avid markets for high-value US and European exports, such as capital equipment, computer software, luxury goods, and entertainment services.  By 2004, 40 percent of US exports were going to Asia.  This was how the international distribution of labor and capital was expected to function at the time the World Bank and International Monetary Fund were created.

By the end of the twentieth century, the World Bank and the European Union were the two largest sources of foreign aid.  The Bank had also become the main conduit of global knowledge on how to promote economic growth and reduce poverty.  At international aid meetings, including those for individual countries, the Bank and the rest of the international aid community -- consisting of 40-50,000 officials in 20 rich countries and the UN system -- distilled the lessons of trial and error, introduced and resisted fashions in development lending and tried, usually unsuccessfully, to harmonize their approaches.

Aid agencies tried everything.  They went from supporting state-owned industries in the 1960s and 1970s to promoting private investment in the 1980s and 1990s; from offering lines of credit to specific sectors such as agriculture, industry, and housing to supporting national financial systems and leaving detailed lending decisions to local professionals; from bankrolling complicated rural development projects in particular locations to financing broad national services to achieve similar purposes indirectly.  For a time, in the interests of speed, governments exempted major investment projects from local taxes, regulation, and decision-making; afterward, these exemptions were judged unwise,  as they landed governments with infrastructure they did not understand or could not maintain.  Donors set up special units to run projects, poaching talent away from other ventures; later, Africa’s friends recognized they were weakening governments by creating islands of well-paid specialists in seas of mediocrity.

There was nothing capricious about these changes of approach.  They were a genuine response to lessons learned in thousands of development projects around the world and reflected the limits rich countries themselves were encountering in using government as an engine of economic activity.  Aid planners drew on experience in Latin America and Asia, where agricultural research, road construction, and cheap energy (such as hydroelectricity) were seen as the main building blocks of economic growth and, eventually, of a more even distribution of wealth.  In the 1960s and 1970s, aid was offered mainly through individual projects, such as supporting family planning programs or building technical training schools.  This ensured that aid resources were used not only productively but also clearly, and that donor parliaments, auditors, and taxpayers could understand how public money was being invested.

By the late 1970s, the most generous aid donors – the Netherlands, Sweden, and Denmark – were arguing for broader (“program”) assistance to governments that had kept their promises.  Those donors did not abandon individual projects, which were benchmarks for broader programs and kept aid specialists in touch with realities on the ground.  But the overall trend was toward loosening the strings on aid and trusting the young institutions of developing countries to use it properly.  Some countries would struggle under the burden of this trust, but – it was argued elegantly – this was the process of development.

Even before these experiments were tried, skeptics had argued that they would fail.  Conservatives suggested that countries needed to find their own ways to prosperity and that outside help would distort priorities, discourage domestic savings, and create dependencies.  In 1981, the economist P. T. Bauer summarized the case against aid in three powerful sentences:  “The argument that aid is indispensable for development runs into an inescapable dilemma.  If the conditions for development other than capital are present, the capital required will either be generated locally or be available commercially from abroad to governments or to businesses.  If the required conditions are not present, then aid will be ineffective and wasted.”   Liberal and socialist critics saw aid as a form of “imperialism,” or as “an attempt to preserve the capitalist system in the Third World”; instead, they preferred to see wealth redistributed in the world without strings and conditions.

            For 40 years, aid agencies struggled hard to prove both sets of critics wrong.  They argued that outside assistance was essential, despite its drawbacks.  Some aspects of social progress, such as rural roads, primary schools, vaccination programs, family planning services, sanitation and clean water, would never attract private investment.  Good policies deserved tangible support, not just a pat on the back.  Project quality could be promoted through monitoring and evaluation, including impact studies.  Lessons learned would be applied through follow-up efforts.  As for the charge of “imperialism,” aid agencies argued that it would be unconscionable to hand out public money without trying to channel it to the intended target.  Technological advances, such as high-yielding crop varieties in South Asia in the 1960s, gave heart to aid practitioners.  But by the end of the twentieth century, the “Green Revolution” that had transformed the food supply situation in India had yet to occur in Africa, for all the billions in aid money that had been spent there.

Increasingly, influencing the national policy of a developing nation was judged to be more important than providing it with projects and technology.  Sector-wide programs, in which donors financed portions of the entire national budgets for agriculture, education, or health in exchange for specified reforms, became the preferred means of promoting development.  The number of countries that could be trusted to respect their agreements was very small, and this “carrot and stick” approach contradicted the findings of years of research on the effectiveness of aid.

In fact, experience showed that aid works best where governments are already on the right track, establishing priorities, implementing policies, and developing key institutions for their own reasons rather than trying to impress people in foreign capitals.  In Africa, few countries have been so clear-sighted and plucky.  The few that made serious efforts to reform themselves were those that had hit rock bottom and acted out of pure shame or desperation.

By 1981, Ghana, the first African country to achieve independence in 1957, was in such sorry straits that foreign businessmen would pack essential items like toilet paper before traveling there.  When Ghanaians began doing the same before returning home from overseas trips, they realized that they had had enough.  A new coup brought to power a determined soldier named Jerry Rawlings, who stayed in office for 19 years.  From the early 1980s on, Ghana adopted more credible economic policies and began reversing the decline which it and the rest of Africa were suffering.  Soon, the country became the poster child of Africa’s future, backing common sense for its own sake rather than cowering in submission to international pressures.  Rawlings even demonstrated that he was serious about fighting corruption by having members of his own family executed for dishonesty.

By 1986, after 15 years of dictatorship and disorder, Uganda, too, had had enough.  The new president, Yoweri Museveni, cleaned house from top to bottom and ushered in a period of steady reform and economic growth.  By the end of the century, Uganda had become the first African country to wrestle its way back to the per capita income it enjoyed in 1970.  Upset by the deaths of many military comrades, Museveni was the first African head of state to become personally involved in fighting HIV/AIDS.  As a result, by the year 2000, Uganda was also the first country to have reduced infection levels in some districts.

            Other determined countries, such as Ethiopia and Eritrea, went from winning fierce wars of national freedom to introducing major social reforms.  Again, they did this for their own purposes.  The Ethiopian leader, Meles Zenawi, believed that apart from the security of the food supply, inflation was the principal enemy of small farmers.  He also said he found it easier to ask his people to cross the metaphorical minefields of economic reform than to have his troops cross real ones a few years before.  Eritrea, the country next door, swept away the cobwebs of government regulation so decisively that it shone briefly like a comet in the sky of African policy.  Without foreign consultants and expensive studies, it not only reduced the size of its civil service but also improved salaries and working conditions for those who stayed in government.  The reforms paid for themselves.  Eritrea slashed the staff at the agency that issued business licenses from 250 to 35 and reduced waiting times from six months to 24 hours.  Measures like these would transform the rest of Africa, if only they could spread. 

            Do these relatively successful cases suggest that the road to reform must pass through national humiliation or war?  Perhaps not.  But they certainly illustrate that self-propelled change works best and that the West must alter current approaches to aid.

 

On Easter Sunday, 2001, I was driving deep into the forest of the Central African Republic with three Africans from other countries who worked there.  As they discussed the local situation in the car, I could barely believe my ears.  One asked:  “Isn’t it time this country was placed under a UN mandate?”  The others agreed.  This was not a cynical outburst, but a sober assessment of the problem.  Their suggestion was a reference to the international arrangements set up after World War I to govern Germany’s former colonies.  At the time, the UK was asked to administer Tanganyika and German Cameroon; Belgium was given control over what is now Rwanda and Burundi; and South Africa governed South West Africa (now Namibia).  Africans have always been Africa’s harshest critics, but disgust with its institutions had now grown so deep that these sophisticated, independent voices were prepared to contemplate re-colonization as a solution.

Ten days later, on the 27th floor of an office building in New York, the UN Secretary General’s Special Representative for the Central African Republic, Amadou Toumani Touré, made a similar suggestion.  A strikingly intelligent and idealistic man (and now the president of Mali), he asked:  “Why should one help a country that does not seem willing to help itself?”  His answer was that the international community should still try to help, for the sake of the people of the country and the stability of the sub-region.  But, since a full-blown UN mandate was politically out of the question, he suggested that the World Bank and the IMF put advisers in the president’s and prime minister’s offices.  I pointed out politely that such a solution had been tried -- and had failed -- in many other countries.

Both of these anecdotes point to a yearning among Africans for continued help and guidance from the international community. 

Foreign aid in Africa must be changed for a number of reasons.  The first is that, as a whole, it has not worked.  The one clear success has been the fight against river blindness in West Africa, which took 25 years and a concerted partnership between donor governments and international pharmaceutical companies (sustained by an active international secretariat) to overcome the parasite that was ruining the sight of millions of Africans, as well as the region’s agriculture.  Other ventures have been judged controversial rather than promising.  The Chad - Cameroon Oil Pipeline, which was nearly blocked by international environmental and human rights groups, will transform the economy of Chad if the revenues are managed properly.  Cultural exchange programs, particularly study trips to the United States for thousands of African intellectuals and professionals, and small grant programs supporting democracy and human rights have had a very positive impact in expanding the horizons and boosting the hopes of African reformers.  But in areas meant to tackle poverty directly -- clinics, schools, literacy programs, clean water supply, and sanitation -- the foreign aid record in Africa has been deeply disappointing.  Successes have been small, ephemeral, or too expensive to reproduce on a larger scale.

Few aid initiatives are really local and well thought out, and money rarely reaches its intended target.  Even Uganda, one of the few African countries with a functioning government, found in 1998 that less than 30 percent of the funds dedicated to primary education was actually reaching the schools.  Not all of the missing money was stolen or wasted; some if it was re-appropriated to other priorities by middle-level officials. Another complicating factor is the basic clash of values between Africans and Westerners.  African leaders are now willing to talk about “poverty” and will even wrinkle their brows about “governance,” but they prefer to have these discussions with foreign visitors rather than their own countrymen.  In some countries, poverty studies have been suppressed to prevent leaks of embarrassing information.  In the meantime, aid agencies keep churning out projects, some African officials try to cooperate, others try to derive personal advantage, and the African public keeps staring in disbelief at the ineffectiveness of the whole process.

Although they put on a brave face, aid practitioners have actually admitted defeat.  In the 1990s, the World Bank’s African department refused to cite economic growth figures for Africa as a whole because a weighted average would reflect the poor performance of the largest countries (Nigeria, Congo, Sudan, Ethiopia, and even South Africa).  Instead, trying to be encouraging, the Bank referred to developments in a “typical” economy and said that Africa was “on the move.”  A veteran observer of Africa called this convenient use of statistics and misleading language Africa’s “Potemkin deception,” referring to Prince Grigori Potemkin’s creation of mock villages in the Crimea to persuade Catherine the Great that her empire was thriving.

Some of the best economists in the world worked hard on Africa’s problems, to little avail.  In 2000, the World Bank published its third major study in 20 years on the continent’s economic prospects (“Can Africa Claim the 21st Century?”).  Its prescriptions were essentially the same as those of 1989 -- and 1981.

One of those prescriptions was more “capacity-building,” a persistent theme of aid planners.  Since 1980, about four billion dollars a year have been spent on training, technical assistance, and assorted institutional studies.  In the meantime, Africa’s latent capacity has barely budged -- remaining just below the surface, waiting for real opportunities to assert itself, or seeping away to other countries.

Since 2000, a frequent theme of international meetings has been how to measure the impact of aid more effectively, a disguised complaint that current yardsticks are not giving the right results.  This is like hoping that a better thermometer will halt global warming.  In one of the latest developments, some donors -- including the World Bank -- have tried to turn themselves into charitable organizations.  Effectively bypassing African governments, they seek to put resources directly into the hands of beneficiaries through “community-driven” programs and to use nongovernmental actors to administer them.  But there are obvious limits to how far governments will allow aid organizations to run circles around them.

The ultimate indictment of foreign aid is that few Africans themselves believe in it.  Shortly after I arrived in Abidjan to head the World Bank’s regional office for Western Africa, a leading businessman -- tough, American-trained, and plain-spoken -- nearly knocked me out of my seat when I visited him with some rather sharp words:  “What do you know about our government that we don’t?  I hope you don’t believe in all these musical chairs they call ‘democracy’ around here.   Why are you lending them any money?  I certainly wouldn’t.”  That challenge rang in my ears during the next three years in the country -- and still does.

The question came in a different form in 2002 in the Central African Republic, where I met with business leaders, trade unionists, high school students, and human rights activists (who arrived late because they had taken separate taxis to confuse people who were following them).  When the students heard how important education was to foreign donors, they asked if the World Bank could take over the running of the country’s schools.  I pointed out how impractical that would be.  “Then, why don’t you give money directly to people rather than governments?” they persisted.  I explained that even if that were physically possible, the World Bank’s annual aid to Africa would meet the direct needs of the very poor for only ten days.  Instead, governments and donors needed to invest in policies, projects, programs, and public debates that would help the poor improve their own lives.  The students did not understand this.  The way they saw it, their needs were immediate and their own government was certainly not listening to them.
If aid is largely ineffective, it is also demeaning.  Unlike Shakespeare’s mercy, which “blesseth him that gives and him that takes,” foreign aid disfigures and corrupts at either end.  Aid officials grow accustomed to flying business class and holding seminars on poverty in luxury hotels; at the same time, they complain about government extravagance.  Facing a wide variety of conditions and regulations, they lose a sense of proportion.  In 2002, a World Bank official came across Chadians attending a three-day training course in Niger who had stayed in the country for a whole week.  Incensed at their apparent dishonesty, she berated them publicly; in fact, there was only one flight a week back to Chad.  Several of the travelers had exhausted their daily allowances and were sleeping on the floor of the airport.

Equally demeaning in Africa is the lopsided “dialogue” between donors and governments about economic and social policy.  Many local officials lack the training and political wiggle room to argue an issue.  Knowing this, some aid staff are tactful, while others get right to the point.  But the outcome is the same:  Africans need the money more than donors need to persuade them; as a result, a full consensus is rarely reached.  Elsewhere in the world, aid agencies have it less easy, as countries can draw on other sources of money and advice, including private investors, commercial banks, and international consulting firms.  For the most part, Indonesian and Brazilian policy-makers make their own decisions -- and mistakes.  In contrast, policy errors in Africa have a disputed parentage.

In trying to please aid officials, African countries feel debased, like circus dogs forced to perform tricks.  Governments try to defend their actions, but the public only sees the hoops they are jumping through.  In March 2000, I showed a group of African church leaders a British television documentary about the World Bank’s work in Uganda, hoping to reassure them about efforts to curb defense spending there.  The message was lost on them.  Instead of being relieved, the Ugandans in the audience complained about the harsh way in which Bank staff had spoken to their president in the film.  In my view, the Bank had been polite to a fault.

For a long time, aid critics complained that policy reforms and projects were imposed on countries and that governments, like ventriloquists’ dummies, said only what the donors wanted to hear.  Aid professionals retorted that there was more to the process than met the eye and that some solutions were dictated more by circumstance than by foreigners.  Both sides now occupy common ground, stressing the importance of increasing country “ownership” and “partnership.”  Yet, few African governments are more in control of anything now than they were in 1960.
This lack of control can have bizarre consequences.  At a meeting of African heads of state in January 1998, two of the most admirable among them described how it felt to be at the mercy of aid officials.  President Chissano of Mozambique had asked the World Bank to finance a bridge across the Zambezi River, which divides his country in two.  Transport experts prepared a traffic survey and concluded that too few cars used the road on either side to justify such an investment.  “Of course, there were no cars,” spluttered the President.  “We have few of them to begin with, as we’re poor, and without a bridge they are not likely to go in the direction of the river!”  President Museveni of Uganda offered his own anecdote:  “A few years ago, World Bank experts decided that telecommunications was a higher priority for us than roads.  So we ended up with very nice telephone booths in remote villages where people could call their cousins in the capital to say, ‘Well, it’s good talking to you, but I can’t come visit as the road’s washed out . . .’” 

If aid is both ineffective and demeaning, large amounts of it are also simply wasted.  Even aid agencies have acknowledged repeatedly that there is greater pressure to commit money grandly than to spend it wisely.  Of course, there are limits to what foreigners can control without taking the place of governments; supervision procedures are costly; and even apparently sophisticated accounting procedures can be mere fig leaves in an administrative jungle.  Without trust and a common purpose, much aid is bound to go astray. 

This record has not daunted Western donors.  Aid officials are generally sympathetic, spirited, and imaginative people.  It is part of their job to do the impossible.  If programs stall, senior managers in donor agencies think there is something wrong with the country director rather than the country.  Donors believe they are being tough with governments, but really they are constantly letting them off the hook.  A recent novel by an experienced observer of Africa has parodied this self-delusion vividly.  Here is his description of government and donor officials meeting behind closed doors to hammer out a public statement:

“The men in the room -- there was not a single woman -- knew each other well, and for the most part respected each other.  Yet each joke came with a barb, and there was a story behind each witticism or verbal sally.  For the insiders of the aid business, every line of the communiqué that would emerge from the talks, drafted paragraph by paragraph, was a battleground.  To the uninformed eye the official statement would emerge as a bland resume of discussions; but to anyone with an insight into ‘donorspeak’ the result spoke volumes.”

According to the story, complimenting a government on its “efforts” to stabilize the economy meant “it should have tried harder.”  References to “initial” or “recent” successes had to be taken with a grain of salt:  “Two more weasel words, used very cleverly. ‘Initial’ shows that the donors doubt that what has been started will be continued.  And ‘recent’ is the way donors show their frustration that it has taken the government . . .  so long to getting round to putting promises into practice.”

Even firm-minded people can be trapped into being too considerate or understanding.  Once committed to a difficult country, aid managers tend to look for the silver lining.  In 2002, the World Bank learned that Chad’s Ministry of Health had used debt relief money to buy overpriced hospital equipment from a single firm, without competition.  The Minister of Finance reacted promptly, canceling the contract, calling for proper bids, and eventually having the Minister of Health fired.  Unimpressed, the IMF insisted that all other recent contracts be audited.  I argued that the Minister of Finance had shown he was serious and should be given some leeway in rooting out other abuses.  In the end, the IMF got its way.  I had wanted to give the Chadians the benefit of the doubt (after all, it was Chadian health officials who had blown the whistle), but I now recognize that most Western taxpayers would agree with the IMF’s approach.

Aid agencies have tried to avoid waste and inefficiency by being more focused and selective.  But it is difficult to draw a line between what is important and almost important, between the root causes and the exacerbating factors of poverty.  As a result, aid programs have been stretched across too many countries and activities, watering weeds as well as flowers, giving false hope to some and inadequate support to others.
Sometimes, however, fresh eyes and a can-do attitude can overcome complexity.   In May 2002, the US Treasury Secretary Paul O’Neill toured four African countries with the Irish rock star Bono, who wanted to show him how difficult the development challenge was on the continent.  The international press described them as an “odd couple.”  Bono, a tireless campaigner for international debt relief, seemed at ease with crowds, looking cool behind his dark glasses.  O’Neill, a former chairman of two major corporations, was dressed for a board meeting, hesitant even to don traditional chief’s clothing in one village, perhaps fearing he would look ridiculous the next morning on the front page of the New York Times.  But, on the first day of the tour, he reacted with boyish wonder to the discovery in Ghana that only half the population had access to clean water.  Here was something that could be fixed with a relatively small amount of money.  As he pointed out, “Without good water, people get sick, crops don’t grow . . .  you can’t get started developing anything.”
Eventually, Bono began to lose patience with the secretary’s single-mindedness.  By the time they were in Uganda, O’Neill was telling the country’s president that his entire population could be given clean water for a cost of $25 million.  The president’s advisers showed him a consultant’s study that put the bill at closer to $2 billion.  “President Museveni,” O’Neill said, shaking his head, “this is recommending you build a water system like in Detroit or Cleveland. You won’t need that for a hundred years.  You just need to drop wells, and mostly maintain them.  Your people can handle the rest.  We can do this quickly, maybe a year or two.”   Like Bono, many aid officials found O’Neill’s conclusions simplistic.  But he had a point.  Parts of the development puzzle are more important and tractable than others; solving them requires clear purpose rather than a great deal of money.
Indeed, throughout the world, it is uncompromising governments that have made good use of aid.  Yet, in Africa, aid officials have been prone to muddling through and political correctness.  The best example is population policy, which was prominently discussed in the 1970s and 1980s but disappeared from polite conversation during the 1990s.  Africa has the youngest and most sexually active population on earth.  In many countries, one in two Africans is younger than 15, compared with one in eight in Canada and the United States.   Thirty-four of the 40 most prolific countries on earth are African.  Yet aid officials stopped quoting these numbers when Africans resisted, complaining they were already poor enough without losing their offspring (“our only wealth”).  African women have been open to practicing birth control, but their governments and husbands have failed them.  Public services have been slow to provide condoms and counseling services, while fathers insist on having larger families -- or at least more sons.
The number of African countries where population policy has been effective remains woefully small.  As part of the World Bank’s first structural adjustment program in 1980, the president of Kenya agreed to head a National Council on Family Planning.  That high political commitment allowed Kenya to become one of the few countries in Africa to reduce its population growth significantly by the end of the century.  However, that reduction hardly represents a trend.
A good friend of Africa prophesied, 40 years ago, that: “If Africa rejects colonialism, birth control and the big push needed to develop fast, it has only one way out: to send away all the doctors, and re-establish a high mortality rate.”   This was long before the spread of HIV/AIDS, which could have been slowed if more women had been in control of their reproductive lives and more Africans had been familiar with the use of condoms.
Political correctness is hard to resist, especially thousands of miles from the hardship that it covers up.  Most Africans are prepared to hear the truth.  In fact, they are so accustomed to doublespeak and gobbledygook -- when their rulers deign to give them even that -- that they are relieved to hear another point of view.  Unfortunately, one of Africa’s greatest handicaps is the lack of involvement and understanding of Africans themselves.  It is true that few developing countries outside Latin America and India are guided by public opinion.  But democracy is spreading elsewhere and in Africa it is barely inching forward.  Repressive governments and uneducated populations are keeping the continent mired in tradition rather than open to dynamic forces.
Shortly after joining the World Bank, Jim Wolfensohn visited a water and sanitation project in a squatter settlement just outside the Brazilian city of São Paolo.  While the deputy governor of the region showed him around, a large group of women followed at a short distance, joyfully waving papers in front of them.  “Do you know why they are so happy?” the Brazilian asked.  “Because they no longer have to drag buckets of water up these steep hills on their shoulders?” surmised Wolfensohn.  “That’s true,” the deputy governor replied, “but that’s not why they’re showing you those papers.”  “Is it because they are proud to have contributed to the costs of the project?”  “Yes,” the host said, “that’s also true.  But they are waving their first bills for water service.  It is the first time they see their names and addresses on an official document and feel included in government programs they had only heard about on the radio.”   That sense of connection with national policy and programs is still largely absent in the African public.

Aid officials have tried to force that connection by establishing their own “contact groups” -- consisting of journalists, business people, trade unionists, environmentalists, human rights activists, and other community leaders -- to offer unvarnished advice to donor agencies.  But they are no substitute for an informed free press, a strong parliamentary opposition, and governments that can speak for all shades of public opinion.  Donor advisory groups grow stale and lose their independence, with members sometimes curbing their tongues because they value the opportunity -- and financial perks -- of continuing to be heard.  To meet their own agencies’ requirements for consultation, donors hold large “public workshops” that are often prepared hurriedly and are not particularly incisive.  Participants rarely know the issues to be discussed ahead of time and seldom feel afterward that they have been heard.
Unlike photographs, economies cannot be developed in a dark room.  Although there is no inherent connection between democracy and economic growth, there is certainly an intimate link between open political systems and equal access to economic opportunities and public services.  Some countries, like South Korea and Taiwan, have postponed political pluralism until their economies were strong -- China withstands it still -- but even they promoted basic health and education as an integral part of encouraging economic growth.  In Africa, most economies did not grow at all during the 1980s, struggled in the 1990s, and even now are expanding well below their potential.  For these countries, there is no alternative to insisting on honest elections, strong parliaments, and an energetic free press as a means of promoting economic reform and an equitable sharing of the benefits of growth.

For a long time, development agencies avoided issues of democracy and human rights.  Finally, beginning in the late 1980s and in Africa, where the situation was worst, aid officials became publicly concerned about “governance.”  This delicate phrase avoided the central issue.  Using such jargon allowed Western governments to comment on internal matters such as government accountability and information, decentralization of authority, judicial systems, civil service reform, military expenditures, corruption, and relations with nongovernmental organizations.  But the watered-down discourses did little to enforce the rule of law and a culture of openness and equality among citizens.  In some cases, they made things worse.  By training judges and clerks, computerizing records, and consolidating laws and regulations, governance projects created an illusion of modernization. 

            In the last five years, official statements from world bodies have grown tougher.  For example, in March 2002, the UN International Conference on Financing for Development in Monterrey, Mexico came close to linking aid levels to explicit political reforms.  Yet little has changed in practice.  The European Union has cut off aid to small countries like Togo that were no longer even trying to appear democratic, and to larger countries like the Ivory Coast and Zimbabwe that have been on the verge of civil war.  The Europeans have also sent election observers to many countries.

            But most tyrants in Africa continue to enjoy a holiday.  Under “smart” sanctions aimed at senior officials, Zimbabwe’s Robert Mugabe has been barred from visiting Europe and the United States.  But even he has been able to attend UN meetings in Geneva and was welcomed to a gathering of African presidents in Paris by President Chirac in 2003.  As long as governments get away with tyranny, foreign aid will be a palliative rather than part of the cure for poverty.

 

Learning from the Past

Inadequate foreign aid has not been the cause of Africa’s problems.  More important factors have been political oppression, a clash of values between donors and recipients, and an indifference to economics – which led to Africa’s losing half its markets to other developing countries between 1970 and 1990.  Nor will foreign aid make the key contribution to Africa’s future.  But to the extent that Western countries still have influence over events and a growing number of countries demonstrate a commitment to reform, the dwindling contribution of aid could be focused better.

Few of the following recommendations are original.  But some highlight issues that have been treated as marginal until now; others take current trends in international affairs to a more logical, starker conclusion; and still others challenge conventional prescriptions, like the need for more aid

1. Cut direct aid to individual countries in half.
Contrary to conventional recommendations, direct foreign aid to most African countries should be reduced, not increased.  Out of necessity, leaner budgets would be better managed.  There would be greater competition for resources among nations and more time to select, prepare, and supervise projects in the few countries that met stringent criteria.

Some of the savings from direct country aid could be channeled to more general purposes such as the establishment of regional universities, multi-country infrastructure projects, agricultural research, and cross-border HIV/AIDS initiatives.  Such efforts would benefit several countries at a time or, for that matter, the entire continent.

Abundant aid offers false hope, dampens the initiative to develop the continent’s own resources, including its people, and calms Western consciences while dulling them to the even greater horrors that lie ahead.  Bad policy and the continued departure of trained personnel will exacerbate the spread of disease, famine, unemployment, and desperation.   Only political change can offer hope of a turnaround on those fronts.

2. Focus direct aid on the few countries serious about reducing poverty.

Serious countries should be taken out of “intensive care.”  They no longer need the close monitoring they have received until now; instead, they should be given more generous and flexible support.  Unfortunately, there are only five of them:  Uganda, Ghana, Mozambique, Tanzania, and Mali.  The number could grow as political systems throughout the continent are opened up, corrupt leaders are replaced, and the benefits of self-directed development become clear.  In contrast, governments that are indifferent to poverty, cannot guarantee basic education for their citizens, or offer only lip service to fighting HIV/AIDS, should not be helped at all.  Governments that lie in between these two extremes should still receive aid, but with strict conditions until their own sense of determination impresses the rest of the world.

  The international community should give the five serious countries the equivalent of blank checks.  They have earned that latitude.  If they meet certain desired objectives, the assistance can be repeated in two or three years’ time.  If they do not, they will need to fall back into the pack and have international bodies look over their shoulders again.

The international community should stop providing any form of budget aid, except to those five countries, and then on such a massive scale as to allow them to reap permanent benefits from their policies and programs.  If they prove unable to use it all in the short term, the rest of the money could be put into an endowment fund that would be drawn down over time.  Some countries would “graduate” from the group once they no longer needed aid; but the group would remain small and the criteria for entering the group would be exceptionally tough.  All new aid should be in the form of grants.

3. Require all countries to hold internationally-supervised elections.

It is time for aid to become more openly political.  All African countries receiving assistance should now be expected to meet minimum standards of open political debate and fair elections.  International supervision of elections would need to be highly organized and well-staffed, and would have to begin several months rather than a few days before elections took place.  Among other things, election supervisors would have to give close attention to the preparation of voter registration lists and ensure that the opposition had access to state-owned media.

Proper elections are not enough.  Laws that protect heads of state from insult are an insult to Africans.  They reinforce a leader’s traditional right to swagger and stamp out independent views and dissent.  Thin-skinned Africans should stay out of politics.
Similarly, governments that put even one journalist in prison for expressing personal views should face the court of international public opinion within 24 hours.  Where governments persist in such tyranny, aid projects and even commercial transactions carrying some official Western stamp should be interrupted within 48 hours.  Should those pressures fail, international corporations dealing with such governments should be forced to account to their shareholders or consumers.  Also, governments refusing to hold independent inquiries into the death or disappearance of journalists should be placed in quarantine. 
Another initiative the international community should undertake is increased support for credible pressure groups in Africa.  This support is vital for the emergence of a more open society.  Cultural exchange programs, such as those of the United States Information Agency, which have hosted thousands of African intellectuals and professionals on study tours of the United States and Europe, have had a profound effect.  Small grants to support democracy and human rights groups are also valuable.  Novel approaches, such as subsidizing the cost of newsprint for small publishers, should also be tried.

4. Supervise the running of Africa’s schools and HIV/AIDS programs.
Every aid official knows enough about the links between schooling and the health and prosperity of entire societies to make primary schooling an absolute priority.   Most officials currently involved in administration and teaching would stay in place, but they would be supervised by international personnel -- 100-150 per country -- to prevent the siphoning off of funds and abuses at the local school level.  Many expatriate Africans would undoubtedly be willing to return home for extended contracts on attractive salaries, in order to be part of such a noble enterprise.

            The goal of such a system would be to keep everyone of school age enrolled and improve the quality of teaching and learning.  Support measures would include eliminating all school fees, subsidizing textbooks and uniforms, and compensating poor families for the loss of their children’s labor; upgrading the quality of teachers and raising their salaries; building safer and cleaner schools; and making curricula more suitable to local cultures.  Little new research would be needed.  Current knowledge just needs to be put into action.  The resources already being approved by national parliaments must be made to reach the schools.

            The fight against HIV/AIDS is also too important to leave to the whims of African governments.  The scale of organization needed to provide information to vulnerable groups, and the logistical network required for storing and distributing pharmaceutical products, is without precedent for most countries.  Reductions in the price of HIV/AIDS drugs have created opportunities yet to be exploited in Africa, partly for practical reasons, but also because of inadequate political commitment.  Countries that have put themselves on a war footing, for flimsier reasons, in the past need to be accompanied by the international community on this new battleground rather than left to react as local resources, fatalism, and prejudice allow. 

5. Merge the World Bank, IMF and UNDP

The three institutions at the center of international development policy have guarded their different raisons d’être jealously.  Yet their rivalry and conflicting objectives have led to confusion in the advice they give to Africa.  They have ignited unnecessary arguments, sometimes put ideology ahead of the facts, wavered between clear prescriptions and polite ones, and dispersed resources over a wide field.

            All three agencies serve the broad goals of the United Nations in their individual ways.  It would be more efficient and clear to consolidate their efforts, but the merger would be complicated.  The IMF is responsible for monitoring economic developments not just in Africa but in all countries, including rich ones.  The Bank is proud of its ability to raise funds in the international capital markets; its board is dominated by Western countries rather than subjected to the one country - one vote formula that sometimes paralyzes the UN General Assembly.  And the UNDP is glad to reflect the views of all nations and be seen as everyone’s friend.

A merger of the institutions would combine the strengths of all three.  At least initially, Africa would be only a part of the new body’s overall mission; however, all developing countries would benefit from its more coherent services.  As other developing nations became self-reliant, Africa would move to the center of the new UN institution’s agenda.  Combining the three institutions would also free up thousands of their staff.  Instead of being administrators and researchers, they could become school inspectors and election observers.

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The suggestion that overall aid levels should be reduced may seem mean-spirited.  What is $25 billion a year for Africa (with its 600 million people) compared with the $200 billion spent in 2003 and 2004 on the war in Iraq (an oil producer, with only 25 million people)?  What about the $350 billion that the European Union devotes to protecting its farmers?

The costs of the Iraq war certainly dwarf the amounts of assistance that Africa receives.  But that does not justify wasting aid money.  European agricultural subsidies actually achieve their objective: young farmers are staying on the land and rural landscapes are being preserved.  That is not true for Africa.  Aid budgets are shrinking because they have been ineffective, and the challenge is to manage those diminishing amounts more productively.

Under these proposals, some of the money denied to individual countries would go to general programs that would benefit them indirectly.  If countries were prepared to hold internationally supervised elections or allow outside supervision of primary education and HIV/AIDS programs, they could receive aid for those purposes.  If, on top of that, they attracted global attention by their own actions and a change of priorities (such as an interest in first-rate schools rather than first-class tickets), they could begin receiving substantial assistance for other purposes.  In those circumstances, there might even be a case for pushing aid volumes back to historical levels.  But that would require real change and hard evidence that governments were behaving differently.

 Foreign aid, one might counter, is already dwindling.  So why accelerate the process?   Because aid is slowing the process of political change in Africa.  For a long time, direct involvement in a large number of countries was considered necessary so as to have some influence, however refracted and obscured, on national policy-making.  In the soft jargon of aid professionals, it was important to have “a place at the table.”  In most countries, we should now just walk away from it.

In doing so, we would respect Julius Nyerere’s lucid thinking of a generation ago: “If our effort slackens, [donors] will -- and they should -- lose interest in cooperating with us for our benefit.  And, in any case, we have no right to rely upon these countries.  We can accept their willingness to help us become self-reliant; we must not think of them as sources of charity which excuse us from work and sacrifice . . . There is a time for planting and a time for harvesting.  I am afraid for us it is still a time for planting.”
What is so special about the five exceptions, Uganda, Tanzania, Mozambique, Ghana, and Mali?  Most of these countries suffered prolonged political turmoil but emerged serious about the future; Tanzania is the only one whose government was never overthrown.  Ghana, Africa’s first independent nation, has shown steady purpose and real economic and social success since 1981.  In a sure sign of change and confidence, Ghanaians are returning home and investing their savings there.  That is also happening in Uganda, where even the Asian community, which was expelled by Idi Amin in 1971, has begun to re-build itself.  Mozambique has gone from being a backwater of Marxism to a beacon of common sense; while it is still very poor, it has reduced poverty from 70 percent to 56 percent of the population in six years.  Corruption is still widespread in all five countries, but the governments are making credible efforts to combat it.  These countries are not perfect -- Uganda and Tanzania bought new presidential jets shortly after receiving international debt relief -- but no nation in the world is beyond reproach, and they stand head and shoulders above every other country receiving aid on the continent.  In short, none of them deserves to be lectured any longer.

Could some of these recommendations apply to other parts of the developing world, like Central Asia and the Middle East?   Undoubtedly, but their wider relevance should not obscure their urgency for Africa.  Would it not be more logical to stop all aid to Africa, apart from emergency relief and occasional military intervention?  Definitely.  But that would amount to turning one’s back on a tenth of humanity.  Are the proposals realistic?  Some will certainly be controversial, but not less realistic than expecting conventional solutions to work.  Current approaches provide an illusion of progress while forestalling real breakthroughs.

Africa’s “unofficial” friends -- church groups in Montana, old-age pensioners in the United Kingdom, school children in France -- can also contribute by championing a free press, supporting organizations like Reporters without Borders, and putting emphasis on improving primary education and fighting HIV/AIDS.  The power of international citizen opinion to sway government and corporate outcomes should not be doubted.

Many people will say that progress in Africa will be slow and that we must accept occasional setbacks as long as the broad direction is right.  Some would add, as I would have done 20 years ago, that it is better to light a candle than to curse the darkness.  In my view, we now know enough to just turn on the lights.