The Trouble with Africa: Why Foreign Aid Isn't Working

The Trouble with Africa: Why Foreign Aid Isn't Working

by Robert Calderisi

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The Trouble with Africa: Why Foreign Aid Isn't Working by Robert Calderisi

After years of frustration at the stifling atmosphere of political correctness surrounding discussions of Africa, long time World Bank official Robert Calderisi speaks out. He boldly reveals how most of Africa's misfortunes are self-imposed, and why the world must now deal differently with the continent.

Here we learn that Africa has steadily lost markets by its own mismanagement, that even capitalist countries are anti-business, that African family values and fatalism are more destructive than tribalism, and that African leaders prey intentionally on Western guilt. Calderisi exposes the shortcomings of foreign aid and debt relief, and proposes his own radical solutions.

Drawing on thirty years of first hand experience, The Trouble with Africa highlights issues which have been ignored by Africa's leaders but have worried ordinary Africans, diplomats, academics, business leaders, aid workers, volunteers, and missionaries for a long time. It ripples with stories which only someone who has talked directly to African farmers--and heads of state--could recount.

Calderisi's aim is to move beyond the hand-wringing and finger-pointing which dominates most discussions of Africa. Instead, he suggests concrete steps which Africans and the world can take to liberate talent and enterprise on the continent.

Product Details

ISBN-13: 9781403976512
Publisher: St. Martin's Press
Publication date: 05/29/2007
Edition description: First Edition
Pages: 256
Product dimensions: 6.00(w) x 9.00(h) x 0.58(d)

About the Author

Robert Calderisi studied at the Universities of Montreal, Oxford, Sussex and London. A 1968 Rhodes Scholar, he first visited Africa in November 1975. He has had a thirty-year career in international development, principally at the World Bank, where he held several senior positions. From 1997 to 2000, he was the Bank's international spokesperson on Africa. He has lived in France, the Ivory Coast, Tanzania, the United Kingdom, and the US. He is now a consultant and writer, splitting his time between Montreal and Paris.

Read an Excerpt

The Trouble with Africa

Why Foreign Aid Isn't Working

By Robert Calderisi

Palgrave Macmillan

Copyright © 2006 Robert Calderisi
All rights reserved.
ISBN: 978-1-4668-8771-8



More than half of Africa's people are under the age of eighteen. Yet, many of their elders, teachers, or governments are trying to persuade them that they are victims, rather than victors in a now-distant struggle for independence. Even Africans who were alive when that struggle was won are still wrestling with their demons.

In April 2005, a former culture minister of Mali—the Saharan country that boasts the legendary city of Timbuktu—wrote an "open letter" to French President Jacques Chirac. She said that Africa now wanted to stand on its own two feet. "The fight against poverty amounts to begging and submissiveness, leading to reforms that make us even poorer." "The more the North 'cooperates' with the South, the worse off we become." It is significant that she was writing to a foreign leader rather than an African one. Certainly, the pages of history can turn slowly at times, and French-speaking Africans have been especially reluctant to look homeward. Yet, many Africans, regardless of language or origin, ignore what is obvious around them and continue to see foreign governments or corporations as the major causes of their difficulties.

Some Africans acknowledge that their problems start at home and complain that the West has been too indulgent rather than too hard on their governments. The real-life hero of the Oscar-nominated film Hotel Rwanda, Paul Rusesabagina, has pointed out that in April 1994, the same month the Holocaust Museum was inaugurated in Washington, DC, 10,000 people a day were being massacred around him. Despite the phrase "Never Again" that rang throughout the speeches of dedication for the museum, the West did not intervene in Rwanda and is still "propping up African dictatorships."

Even tangible expressions of Western generosity do not impress many Africans. The travel writer Paul Theroux met a political science teacher in the southern African country of Malawi who made no bones about his frustrations: "The tyrants love aid. Aid helps them stay in power and contributes to underdevelopment." "What if all the donors just went away?" Theroux asked him. "That might work," was the reply."

Views vary widely in Africa, and increasingly new voices are being heard. But people of power or influence remain largely stuck in an outdated view of the world. Over a period of forty years, Africa has failed to develop. Even worse, its political and intellectual leaders still blame the continent's problems on factors as varied as an unjust international economic system, the slave trade, colonialism, the Cold War, crushing debt burdens, and even basic geography. On close examination, each of these explanations grows shaky and throws the spotlight back on Africa itself.

* * *

The most frequently cited "cause" of Africa's problems is that the world economy is biased against Africa. There is little doubt that small agricultural producers are at a disadvantage in international markets, and that measures that protect farmers in Western countries limit potential African exports or depress international prices (especially for cotton). But Africa has not been losing ground to competitors in rich countries; instead, it has surrendered markets to other tropical suppliers in Asia and Latin America. Most African countries have in fact let agriculture—their greatest wealth—decline steadily through over-taxation and other wrongheaded policies. African economies were certainly late-starters, but instead of pumping them up with steroids, governments have put shackles on their producers. In contrast, South Korea, a nation that was poorer than Ghana in 1960, caught up with the rest of the world, rather than complain about its handicaps.

Far from being biased against Africa, the international economy has engaged in affirmative action on its behalf. For decades, rich-country markets have been open to many African products, including some agricultural ones. Bananas are imported to Europe from former British and French colonies in Africa and the Caribbean, even though Central American fruit would be cheaper. The Germans, by far the largest consumers of bananas, are willing to pay the price. The US Africa Growth and Opportunity Act (1998) had a profound effect in some African countries by opening the US market to their textiles. This legislation faced domestic opposition, including objections from the inaptly named Senator Faircloth (Republican–North Carolina) who insisted that African countries first import cotton from the United States before sending it back as cloth. (Fortunately, his effort was defeated.) Half of the world's aid has been reserved for Africa. That money would have been better spent in India and China, which together have three times more people than Africa. It would also have reduced more poverty, because of better economic management and lower corruption.

There is now great pressure on rich countries to open their agricultural markets further. Tropical sugar cane would be cheaper for Europeans than locally grown sugar beets. Africa can also produce cereals and oilseeds. But, for the time being, the balance of interests is heavily against Africa. To protect its farmers, the European Union spends $350 billion a year, an amount equal to Africa's entire annual income and fourteen times the aid the continent receives. Such subsidies not only help inefficient producers. In France, they also prevent rural depopulation, keep the countryside attractive, and protect the nation's most important industry, tourism. France has 70 million visitors a year—more than any other country on earth.

Africans jump the gun in complaining about European and US agricultural policies. International pressure will eventually create new opportunities for tropical farmers, but few African countries will be able to take advantage of them. To make African production more efficient, significant reforms and investment will be needed first.

Unfortunately, "efficiency" has been a dirty word in much of Africa. It reminds people of the advice and arm-twisting they have received over 20 years from the World Bank and the International Monetary Fund. These institutions are the favorite targets of Africans. The Bank and the Fund are large, mysterious, and powerful, and so fond of technical jargon that their efforts to defend themselves often fall on rocky ground. All the same, they are an odd choice of villain.

To begin with, the World Bank is not a "bank" in the normal sense of the word but a financial cooperative owned by virtually all of the world's governments. It is a specialized agency of the United Nations and, with its staff of 10,000, the most important foreign aid body on earth. It has 1,400 people working on Africa—the largest single group of professionals anywhere promoting the continent's development. Many of them are African. In 1963, the popular writer James Morris described Bank staff as self-effacing do-gooders. "They may be excited by the unfolding of history all around them, but do not often let it show. They pride themselves upon their strictly businesslike approach to the needs of the poor nations, and would think it effete or namby-pamby to allow any breath of sentiment to creep between the ledger lines."

The culture of the institution has changed since then. Crusty former colonial administrators have been replaced by smooth-talking economics Ph.D.s and business school graduates. But the Bank's self-image and sense of mission have barely faltered. Its purposes were obscured to the outside world by three colorless presidents between 1981 and 1995. In the decade after that, however, the hard-driving James Wolfensohn infused the institution with new energy and clarity.

Yet most critics of globalization, like Africans, still condemn the institution. Some do so in apocalyptic terms. In the words of one writer: "Zimbabwe's president, Robert Mugabe, is a brutal autocrat who has cheated his country of democracy, murdered political opponents and starved the people of regions controlled by the opposition. But the damage he has done to Africans is minor by comparison to that inflicted by the International Monetary Fund and World Bank." Others have described the Bank as the "new maharajahs," "lords of poverty," and "masters of disaster." The organization is even granted powers that it does not claim. One critic has suggested that the Bank's influence is more than economic; it has been "cultural, ideological and, in a not entirely metaphysical sense, religious."

Like other large organizations, including genuinely religious ones, the World Bank has its faults. But it has also done some good. It may not be "democratic," but its member countries are deeply involved in setting the policies and approving the lending of the institution. Admittedly, most of the Bank's capital and voting rights are held by Western countries, but that is logical for an institution offering Western assistance and promoting an open society.

Its motives have also been disputed. The Bank feels that it is fighting world poverty; anti-globalization critics suggest it is serving Western interests. Both are right. The Bank and its sister institution, the International Monetary Fund (IMF), were founded in August 1944 at an international conference at Bretton Woods, New Hampshire, in the conviction of the Western powers that raising the living standards of the poorest countries would help everyone. The Bank's purpose was to promote the continued growth of world trade; the IMF's was to encourage the free flow of capital and orderly development of the world's currencies. Both sought to apply the lessons of the inter-war years during which a lack of international cooperation, including proliferating trade barriers and competitive devaluations, had hampered an improvement in the world's living standards. The Bank supported specific development projects like roads, power plants, and harbors (when private capital was not available for these), and later, a broad range of activities, including agriculture, schools, water supply, and family planning. The IMF acted as a global lifeguard, assessing the performance of individual economies (including the rich ones), offering advice on how to overcome occasional obstacles, and, in times of emergency, coming to the rescue by supporting a country's balance of payments. The United Kingdom received massive assistance from the Fund as recently as 1976.

In developing countries, the Bank and IMF worked closely together, for the obvious reason that development lending would not be very productive if it supported economies that were headed into trouble. There was creative tension behind the scenes and sometimes spectacular public differences, as in the case of Argentina in the late 1990s. Sometimes, the IMF's short-term objectives were at odds with the Bank's long-term view. By and large, however, their roles were complementary.

In Africa, the ongoing "crisis" of the 1980s and 1990s—a misnomer for what had become a permanent economic problem—confused the division of labor, as both institutions became involved in supporting government budgets. Their main instrument—and the principal target of African resentment—was the "structural adjustment" programs (or SAPs) introduced during the world recession of the early 1980s. Chapter 8 will discuss these programs in greater detail. Suffice it to say here that the new aid was given its strange name because it was intended to bring permanent benefits to Africa's economy rather than cover up temporary sores. Unfortunately, Africans confused the treatment with the disease, or regarded it as an operation performed with hatchets rather than scalpels.

The major adjustment of the period had nothing to do with the international institutions. Between 1970 and 1990, Africa lost half of its share of world markets to other developing countries, simply because those other nations were able to produce and deliver the same goods more cheaply. This represented a loss of income for Africa of about $70 billion per year. There was not enough money in the world—let alone in the World Bank—to fill this gap. It exceeded the amount of foreign aid being spent in all of Africa, Asia, and Latin America combined. In response, the Bank and other official donors shifted from supporting specific projects to providing immense sums to government budgets. These sums were linked to common-sense measures for stemming Africa's loss of markets.

African governments never explained to the public why they were negotiating with the international agencies—even though it was plain they had little choice. These governments—and sometimes the business establishment—did not believe in the reforms, agreed to them half-heartedly, or undermined them once aid officials looked the other way. As a result, the "crisis" appeared to be of somebody else's making, not their own.

The whole process went awry, in large part because of the way African governments kept their citizens in the dark. Few Africans knew that they were losing markets and that national budgets were barely large enough to pay for government salaries, let alone essential materials and supplies. All that Africans saw was the collapse of their infrastructure and public services. Already distrustful of their governments, Africans had even less confidence in distant institutions that talked about reducing poverty but seemed to make it worse at every turn. The real problems—Africa's high costs of production and distribution and poor investment climate—were obscured by the West's awkward efforts to help.

In a sense, the African public understood the situation perfectly. They were not seeing the effects of the reforms because those reforms were not being introduced, or they were being administered badly; in a small number of cases, the reforms were also misconceived. The World Bank was not being too "hard"; rather, the Bank was watering down agreements, or waiving conditions, in exchange for promises of government action at a later date. In Kenya, freeing up the national grain marketing system was an objective of the first structural adjustment loan (SAL); twelve years later, it had still not been done. There was no shortage of money for governments that were prepared to say the right words and sign the right documents. One generous country director at the Bank in the 1980s was nicknamed "Mr. Dial-a-SAL" for his willingness to support ailing government budgets. In just five years, he added $850 million in hard money to the Ivory Coast's debt burden. Yet, in a 1994 study of 26 African countries, the World Bank judged the performance of only one of them (Ghana) to be "adequate" by world standards.

Adjustment did not fail in Africa; it was never given a fighting chance. Africa was bleeding to death, but instead of worrying about the hemorrhaging, African leaders complained about the pain from the tourniquet. Naturally enough, economies took a very long time to recover and most African countries have still not returned to their income levels of the 1960s. The wounds of that period have never healed.

* * *

"Structural adjustment" was bad enough. But, for most Africans, it was just the latest in a series of indignities that the world had forced upon them, the most notorious of which was the slave trade.

Historians have argued for decades about the impact of slavery. Undoubtedly, it did psychological and economic damage to the generations immediately affected. But how great was it, and how relevant is it for later developments? The physical traces of this barbarism can still be seen on opposite coasts of the continent. In the west, they include the austere prison houses on Senegal's Gorée Island whence thousands of slaves were shipped to the Western Hemisphere. In the east, one can still see from the air the deep-green mango trees that the Arab slavers planted in Tanganyika along their route from the interior to the small port of Bagamoyo–which is Swahili for "the place where I lay down my heart."


Excerpted from The Trouble with Africa by Robert Calderisi. Copyright © 2006 Robert Calderisi. Excerpted by permission of Palgrave Macmillan.
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Table of Contents

Looking for Excuses * Tanzania: African Socialism * Thugs in Power * The Ivory Coast: End of a Miracle * Culture, Corruption and Correctness * African Disunity * Defying Economics * The Chad-Cameroon Oil Pipeline * A Clash of Values * The Trouble with Foreign Aid * An Agenda for Africa * A New Day

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