The Road to Hell

The Road to Hell

The road to hell is paved with good intentions – Samuel Johnson.

Poisonous Aid
In early 2006, when President Museveni of Uganda, was threatened by donor countries who did not like his ‘undemocratic methods’, essentially ‘fixing’ his re-election, he announced that Uganda did not need any foreign aid, particularly aid which came with conditions often harmful to his country. It was a storm in a teacup. Within a few months Museveni was forgiven and most of the bilateral aid was switched on again.

I think he is, for the most part, right. Aid, particularly so-called development aid, is poisoning Uganda, creating a culture of dependence and resentful beggary, undermining rather than aiding economic growth. Today, of every dollar spent by the Ugandan government, 40cents is aid money. Such levels of economic dependence, totally distorts every aspect of the nation’s economy. It is the manure, which enables a corrupt government to thrive. Nor is Uganda unique in this respect. There is a growing and uneasy realization that the huge amounts of aid money poured into Africa has had little effect on the average poor African. I am convinced there is an urgent need, not to increase aid to Africa but to fundamentally overhaul the existing system, even to cut it radically in certain areas.

When war and natural disasters strike immediate humanitarian relief aid is often needed and can have a good effect, it can save lives. But if aid could make Africa prosperous it would have done so by now. Despite nearly a trillion dollars of aid since independence in the 1960s, much of Africa is worse off now than it was then. We like to think that the reasons lie in flawed strategy, much was spent by outsiders with little knowledge of Africa’s needs or consultation with Africans, the continent is littered with abandoned projects roads leading nowhere and factories without fuel or raw materials. We also are told, by luminaries such as Bono and Geldorf, we simply haven’t given enough. To ‘make poverty history’ we must do things better and double our spending. Digging deep in our wallets we don’t stop to ponder the unintended consequences of our overwhelming helpfulness on fragile African societies and economies.

Dependent and Resentful
Aid makes up half the domestic budgets of half of Africa’s countries. Making some as dependent as when they were colonies. In many, aid serves to undermine the economy, stifles entrepreneurship and enables poor governments to abdicate responsibility for providing services to its citizens. Uganda for example, is currently struggling to manage the sheer volume of foreign money coming into the country to fund aid programs, which it estimates as about $1bn this year. One effect is to push up the value of the Ugandan currency, which in turn makes the country’s fragile export market (coffee, tea and flowers) less competitive, threatening jobs and economic growth and increasing dependence on aid.

Aid creates and sustains unequal relationships, talk of partnerships between donors and governments are a distortion, Richard Dowden of the Royal African Society writes “We like it when they take ownership of the program but we mean our program. We don’t like it if they start having their own ideas”. This high-handed attitude creates resentment at every level of government. It is exacerbated when the people exerting control have little cultural understanding, are paid salaries many times greater than local staff and drive around in huge gas-guzzling SUVs. When programs are ineffective or fail even the poor African who rarely feels the direct impact of aid, notices and resents the ‘dude in the Land Cruiser’

Aiding and Abetting
Aid sometimes enable governments to pursue and sustain policies, which harm its citizens. The Ugandan Government’s terribly defective strategy to defeat the LRA in Northern Uganda by corralling the people into IDP camps is aided and abetted by the World Food Program . Without this food the government would be forced to find an alternative solution to the conflict. Ethiopia’s seemingly endless and biblical famines are not just the result of drought and over-population, but of a fatally flawed Marxist government policy, which denies land ownership to individual peasant farmers. Tenant farmers have no incentive to care for the land. Every famine, the government cries out for and receives international food aid and avoids dealing with the deeper political issues.

Quality of Mercy
My greatest criticism of contemporary development aid is its quality. It seems to me that the basic ethos of aid remains a voluntary transfer of charity from rich countries to poor. We give money, tell them how to use it, minutely scrutinize their activities and hold them accountable for failure. There is little or no donor accountability, particularly downwards to the people meant to benefit from the aid. The result is that aid is hugely distorted and badly managed by donors.

Real Aid
Last year, the NGO Action Aid produced a very revealing study of modern development aid, entitled Real Aid. It shows that every donor country exaggerates the true quantity and quality of its aid, though some are more self-interested and economical with the truth than others. The first revelation is that globally only 40% of development aid goes to low income countries and only 30% to countries in Sub-Saharan Africa. The majority of aid goes to middle income countries, which strikes me as an odd strategy for poverty reduction. Second, debt-relief is counted as Official Development Assistance, jargon for aid. This despite the fact that most debt relief is no more than a paper transaction to narrow the gap between what a country is due to pay and what it is able to pay. Third, services for immigrants/refugees are also counted as ODA. Both seem to be double accounting and there is no doubting its distortion. France spends $0.5bn a year on its national refugee issues and over 40% of its ODA is debt relief.

Experts and Exports
When it gets into the details of how the actual money is spent the revelations are eye-popping. A quarter of all aid is spent on Technical Assistance (TA) a catch-all phrase encompassing companies and consultants from donor countries to provide the recipient with expert advice and assistance often at huge cost. In Africa alone, donors employ an estimated 100,000 technical experts. Some donors are very exclusive in their choice of expertise, for example, 25 of the 34 largest recipients of the UK technical assistance contracts listed on the Department For International Development (DFID) website are British. None of the remaining nine is from a developing country. Lest Americans feel self-righteous, the UK spends 16% of aid on TA, the US is top of the class, spending 47%.

Transactional and administrative costs gobble up another 14% of the money. Not to mention time and effort, the average African country is estimated to produce 10,000 quarterly reports to donors a year and to host 1,000 donor visits. But the prize for pork goes to something called ‘tied’ aid. A whopping 40% of all aid outside of TA and food aid is tied to the purchase of goods and services from the donor country. As an example, the President’s Emergency Plan for AIDS Relief (PEPFAR) which has committed $15billion over 5 years, requires funding is only provided for branded drugs. US pharmaceutical companies get lucrative contracts but less people will get life-saving treatment than if cheaper generic drugs were used. The US is not alone in tying aid in this fashion but it certainly heads the pack at 70% of its aid, with only Italy beating it at 92%. Some countries, including Britain, have recently untied their aid but there is a long way to go to end this form of ‘aid as trade’.

Moral Guidance
Faced with these facts, it is small wonder that African governments appear less grateful and enthusiastic about aid than many donors believe they should. It is also easier to understand why funds get misappropriated with impunity within recipient countries and corruption is endemic to aid programs. Quite frankly, the examples set by most donor countries - exaggerating amounts, round-tripping monies through TA , tying aid to donor commercial interests and the profligate waste of funds through poor management – provide very poor moral guidance.

Aid and Dignity
In questioning whether Africa needs aid in order to develop, whether aid should be increased, even doubled according to findings of last year’s G8 Summit on Africa, I realize I run contrary to such great ‘social scientists’ as Bono and Geldorf (but I still like the former’s music and could never stand the talent-less Boom Town Rats). I have though, no qualms in criticizing the current quality of development aid, the dissembling, waste and distortion, clear for all to see. There is an urgent need to clean it up before increasing it.

I also believe that giving aid feels good and indeed our intentions are mainly good (though they may pave the way to hell). But there must be better ways to help Africa. We must pursue policies that enable Africa to develop its own way under its own steam, with dignity, able to compete and earn its living in the world.