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The Impact of Foreign Aid to African Countries.
10
The Social, Economic and Political
Impact of Foreign Aid to African Countries.
What is Aid?
-Humanitarian Aid/ Emergency Aid,
such as a response to a natural
catastrophe.
-Systematic aid which are either
bilateral or multilateral.
-Charity based aid e.g Bono, Jolie.*
Culture of Aid-dependency
-Started in the 1960,s. Why in the 60's?
-How did Europe get involved?
and how did the US, which had no tangible
ties to Africa get involved?
-Impact of the Cold-War in perpetuating this
dependency on aid.
Why African Countries depend on foreign aid:
Wars: One year of civil war slows a country's development
by a decade; several countries have been at it for twenty
plus years! The Sudan; DR Congo; Somalia etc
CORRUPTION: Perhaps the biggest cause of Africa's cycle of
poverty. The disparity between the haves and the have-nots.
Mentality: Sometimes it is a belief instilled into the people by their
politicians that "they are the way they are" for ever.
Poor distribution of funds, failure to prioritize or follow budgets.
Self Inflicted
-Nigerian Anti-commission reports that the amount of foreign aid to Africa between
1957 and 2007 was about 400 billion dollars;
this is roughly equivalent to the amount of money that the Nigerian President and governors cannot account for in the same period.
Kenyan members of parliament are paid an equivalent of $ 150 000 per year
and only pay 600 dollars in taxes every month.
The Kenyan president is compensated $ 500 000 per year.
The former Zairean president Mobutu Ssese Seko lived in a palace with gold being just as common as wood.
The son to the Equatorial Guinea President, takes his vacations on yatchs owned by Bill Gates' Microsoft partner, Paul Allen.
The DR of Congo is the richest in natural resources, yet one of the poorest in the world. She has gold, uranium, lumber, cobalt, copper, diamonds. She has enough rivers to power Africa; all this and she still depends on a 4-year 1.3 billion dollar aid from the IMF.
Social Impact of Foreign Aid
(i) Healthcare sectors in Africa rely heavily
on Aid, eg malaria programs, PEPFAR etc
(ii) Schooling programmes eg Free Primary Education in
Kenya
(iii)Local Community development programmes eg for digging of
boreholes, small scale farming and general business start-up capital.
(iv)Foodstuff eg grains and also water.
Economic Limitations of Aid
1. Inflation
2. Diminishing Exports
3.Low absorption capacities.
4.Reduces savings and investment.
Political Impacts
-Loss of autonomy resulting in arm-twisiting and neo-colonialism
-Internal strife in African governments caused by differential
alignments eg Mobutu Sese seko (US) vs Patrice Lumumba (USSR)
-Corruption since the monies are chaneled directly into government
coffers and not into public domain.
FDI is not flowing to Africa...but why not?
-Poor roads
-Poor infrastructure
-Overall costs of production
-Power supply is scanty
-Unstable political climates