Resurrected Aid: Why There is Still Hope for Aid in Africa

Joram Mutenge is a rising senior at Luther College, majoring in philosophy and business management. This summer Mr. Mutenge participated in Dr. Stephen Smith's 2018 AEI Summer Honors Program course on "International Economic Development: Why Institutions Matter."

The distribution of aid to developing countries in Africa is a contentious issue among economists and international policymakers. While giving aid to poverty-stricken countries may be seen as a generous act, it has been argued that doing so is not sustainable and does not benefit people in developing countries in the long run. Dambisa Moyo in her book Dead Aid: Why Aid Is Not Working and How There Is a Better Way for Africa contends that aid has failed to live up to its promise. Moyo calls aid a vicious cycle, arguing that “with aid’s help, corruption fosters corruption, [and] nations descend into a vicious cycle of aid.” She explains that one of the problems is that foreign aid supports corrupt governments by providing them with usable cash to advance their pernicious and corrupt ideals.

With these negative consequences, should we abandon aid altogether? While I agree with Moyo that the current distribution of aid in Africa is not sustainable, I still do not think that abandoning aid is the solution. There is still hope for aid in Africa.

For example, low-income countries (≤ $1025 annual income) such as Uganda, Burkina Faso, and Malawi would find it very difficult to grow their economies without aid. Most people in these countries are poor not because of misuse of financial resources, but because they lack financial resources. Aid can help these people make a living by providing them with funds needed to start, as well as run, small businesses.

While I was participating in the 2018 Summer Honors Program, I was fortunate to listen to Peter Greer, the President and CEO of HOPE International, speak about his efforts to alleviate poverty in developing countries. It was from his talk that I realized that aid, when properly used, can have a profound effect on people living in poverty. Greer argued, and I deeply agree, that when aid is distributed as a microfinance loan with a mission not to profit from the poor, but to help them out of poverty, many families in the developing world are better off. Greer also advised instead of labeling the unfortunate in developing countries as the “poor” or the “poverty-stricken,” we need to see them as friends that are capable of bettering themselves when given the right tools. I believe that aid, when properly distributed, can provide the necessary resources for our friends in developing countries.

With the microfinance approach to distribute aid, the problem of corrupt governments advancing pernicious and corrupt ideals is eliminated. This is because these governments are no longer in charge of foreign aid funds, depriving them of the chance to promote their selfish agendas. Additionally, this approach empowers people because it provides financial capital to start small businesses. These small businesses can contribute to the economic growth of the country by providing one of the key factors in poverty reduction—employment. Greer in his talk rightly pointed out that the only way out of poverty involves a job and employment.

Rather than deter growth, properly distributed aid has the potential to promote growth in Africa. Aid donor countries should abandon the unsustainable approach of aid distribution through corrupt governments. They need to cut out the middleman and reach out to the people who are actually suffering. I am in favor of HOPE International’s approach of making contact with the people most in need and empowering them to start businesses and projects that can help them out of poverty, while at the same time, encouraging economic growth. If aid is dead as Moyo claims, we need to resurrect it and make sure it is utilized in judicious and intelligent ways. As my Summer Honors Program teacher Dr. Stephen Smith succinctly put it, “We have a moral imperative to promote growth.”

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