The Trouble With Africa: Why Foreign Aid Isn’t Working

by Robert Calderisi

If you care about a hopeful future of Africa, you’ll want to read different perspectives to make sure that you’re getting the whole story. Calderisi tells about his experience working for much of his 30+ years in international development (mostly in Africa and mostly with the World Bank) and provides an insider perspective on why we are attaining so little results from our aid investments and makes some very specific recommendations on how we should re-direct international aid efforts.

The book is organized more into personal stories and observations which are helpful illustrations but make the book less organized that it could be. Calderisi finishes up with 10 recommendations which I thought could have been made earlier and then expounded on in more detail. Maybe that’s his next book ;-)

No cash to tyrants. Calderisi has a very different perspective than Jeffrey Sachs who has recently gained popularity with Tony Blair, Bono, Clinton and others with his End of Poverty ideas/book. Sachs advocates primarily for increasing the international aid budgets to help Africa out of what he calls its poverty trap (read Easterly’s critique of this theory). Calderisi argues that the international community (including donors) have to play hardball with the rampant corruption of government thugs in Africa who are more interested in flying first class and depositing ill-gotten cash overseas than in truly helping their countries build a better future for their citizenry. He goes into detailed stories of how these various thugs have ruled Africa and how most African countries are still ruled by thugs — even those considered democracies. He says we need to declare that the holiday is over for African tyrants.

Africa needs to move from victim to ownership. Calderisi argues that “slavery, colonialism, the Cold War, international institutions, high debt, geography, the large number of countries and population pressures all have had an effect on Africa. But none of these can explain why the continent has been going backward for the last 30 years.” He goes into specifics about how Africa’s cultural norms and lack of willingness to address widespread petty (and large-scale) corruption are also major issues. He also states that international donors are so often more interested in being politically correct in their public commentary on Africa than they are in telling the truth about what’s really going on in Africa. This “correctness” does no help to Africa despite its helpful intention.

The international trade large sucking sound. One of the most interesting topic Calderisi raises is the massive economic loss that Africa has experienced from its loss of export markets. He states that Africa in the past 30 years has lost over $70 billion a year (in 1990 dollars) in GDP related to exports (mostly to Asia) due to severe neglect by governments in managing their economies. He explains that this is equivalent of $700 per family per year which means that the current international aid budget at the equivalent of $40 per family per year is a pittance and even a doubling of aid would have little economic impact vs. these loss of exports. Calderisi says that accusations that Africa has suffered more than others from international trade rules (globalization) are just not true. If it were true, then we could simply lift all remaining foreign trade barriers and provide an immediate boost to Africa’s fortunes. Unfortunately, Africa has refused to concern itself with foreign markets and must reverse this approach to be in a position to benefit from international trade.

Good intentions are just that. A story about the trouble with foreign aid … “in the northeast corner of the Ivory Coast, the United Nations Development Programme (UNDP) spent $900,000 over three years trying, unsuccessfully, to show farmers how to grow onions. Just 90 miles away, in the neighboring country of Burkina Faso, farmers were growing onions in similar agricultural conditions quite profitably — with aid.” Sad, but not an isolated story of the results from paternalistic aid projects.

The complexity of aid. You might ask, does Calderisi actually care about African people and creating a better future? Is he saying that all aid is wasteful? He demonstrably does care. His stories of personally breaking ranks with traditional international aid approaches and connecting with common people to listen to them and help them are genuine and admirable. Calderisi states that the difficulty of providing effective aid is not a reason for not trying. He illustrates the complexity of aid though through a quote from the economist P.T. Bauer: “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.” This is a real dilemma.

His recommendations for international aid priorities:

1. Introduce mechanisms for tracing and recovering public funds
2. Require all heads of state, ministers, and senior officials to open their bank accounts to public scrutiny.
3. Cut direct aid to individual countries in half (instead focus on regional initiatives).
4. Focus direct aid on 4-5 countries that are serious about reducing poverty (he suggests Uganda, Ghana, Mozambique, Tanzania and perhaps Mali).
5. Require all countries (receiving aid) to hold internationally-supervised elections.
6. Promote other aspects of democracy including a free press and an independent judiciary.
7. Supervise the running of Africa’s schools and HIV/AIDS programs.
8. Establish citizen review groups to oversee government policy and aid agreements.
9. Put more emphasis on infrastructure and regional links.
10. Merge the World Bank, IMG and UN development programme.

Bold recommendations indeed! But I think many of them are right on. What do you think?

More resources:

• Interview with Calderisi on his book
• More books on aid and Africa