“Most analysts on the continent do not share donor nations’ optimism that a big
push in aid will make a big difference in the lives of poor Africans.”
More Aid Is Not the Answer
Jonathan Glennie
A
frica needs help—of this there should
be no doubt. Some African countries in
the past decade saw encouragingly strong
growth in gross domestic product (GDP), and this
can be an important part of poverty reduction.
Yet hopes that the region would be somewhat
immune to the recent global financial crisis have
proved unfounded, and the continent remains by
the far the world’s poorest.
In the past two years, not only has global
demand for African commodity exports shrunk
(except in China), but the region’s financial archi-
tecture has turned out to be not as independent
from the rest of the world as had been supposed.
And while Africa receives relatively little foreign
investment compared to other parts of the world,
even that has fallen significantly.
So Africa does need aid. The question is, what
kind of aid? The simple (and simplistic) calcula-
tion at the heart of the developed world’s present
attitude toward Africa is this: Sub-Saharan Africa
is poor; if rich countries send it more money, it
will be less poor, and people living in poverty will
be better off.
The theory seems both logical and fair. More
aid should mean less poverty, more schools and
hospitals, fewer children dying of preventable dis-
eases, and more roads and infrastructure to sup-
port developing economies. But, unfortunately, it
is not that simple. Official aid to Africa (as distinct
from private charity) has often meant more pov-
erty, more hungry people, worse basic services
for poor people, and increased damage to already
precarious democratic institutions.
For African nations, along with other develop-
ing countries, the recent financial crisis and the
ongoing global downturn present an opportunity
Jonathan Glennie, a country representative for Christian
Aid, is the author of The Trouble with Aid: Why Less Could
Mean More for Africa (Zed Books, 2008).
205
to emerge from a vicious cycle of aid depen-
dency and lack of accountability, and to move
toward a virtuous circle of accountability and
independence. The many options and decisions
regarding aid currently on the international com-
munity’s and African nations’ table should be
judged in this light. And they should be assessed
with the understanding that what matters are not
just economic consequences, but also shifts in
power and accountability.
The new aid era
According to the World Bank, developing coun-
tries in 2010 face a financing shortfall of up to
$700 billion, as a consequence of falling export
receipts, remittances, and foreign investment. Aid
has been the standard response to cash shortages
in the past and, predictably, it is again one of the
central issues under debate. Pressure has mounted
both to reduce aid (as donor governments seek to
balance their budgets and focus on national pri-
orities) and to increase aid (to help poor countries
that, according to the accepted wisdom, are not
responsible for the global crisis yet are suffering
its consequences).
As donor governments look for ways to cut
expenditures on non-priority activities, some aid
campaigners are shifting away from calling for a
doubling of aid to Africa, instead trying to ensure
that assistance at least does not tail off. But to con-
tinue to focus attention on the amount of aid pro-
vided would be both to ignore mistakes of the past
and to miss opportunities that the present offers.
Aid to Africa has risen year on year since the
turn of the millennium, though ambitious targets
set by donors have not been reached. Official
data show development aid to Africa, depend-
ing on which figures you use, either doubling
or almost tripling since 2000, with predictions
of more increases in years to come. As Angel
Gurría, the secretary general of the Organization
206  •  CURRENT HISTORY  •  May 2010
for Economic Cooperation and Development,
has observed, “We are talking here about an
increase in official development assistance of a
magnitude and in a time frame that has never
been attempted before in the history of the aid
effort.”
Underpinning the impressive numbers are
influential studies published in the past few years
(such as a 2005 report on the United Nations’
Millennium Project, directed by the globe-trotting
American economist Jeffrey Sachs, and a 2005
report by the Commission for Africa, chaired by
then–Prime Minister Tony Blair of Britain) that
provide the theoretical and evidentiary basis for
this new era of aid. These reports buttress the
aid optimism that is now the political consensus
in donor countries, and they seek to turn back a
tide of literature that, beginning in the 1990s, has
questioned the impact of aid on poverty reduc-
tion.
But most analysts on the continent do not share
donor nations’ optimism that a big push in aid will
make a big difference in the lives of poor Africans.
It is hard to find a single African
nongovernmental organization
that is actively campaigning Very high aid receipts have
for aid increases, while many
now lasted for decades and
explicitly reject the idea that
huge increases in assistance are have become the norm.
the way to achieve growth and
development.
In a 2005 literature review, Moses Isooba
of Uganda’s Community Development Resource
Network found that “a majority of civil society
actors in Africa see aid as a fundamental cause
of Africa’s deepening poverty.” He went on to
acknowledge that foreign assistance can make “a
lasting difference in helping people to lift them-
selves out of poverty,” but he called for a radical
rethinking regarding the purpose and nature of
aid giving. Charles Lwanga-Ntale of Development
Research and Training, another Ugandan NGO, has
observed “almost unanimous pessimism among
African civil society and academia about the
unworkable nature of aid, given the way in which
it is structured and delivered.”
According to Siapha Kamara of the Social
Enterprise Development Foundation of West
Africa: “Official Africa tends to be more enthu-
siastic about the anticipated increase in interna-
tional aid than civil society. . . . The more African
governments are dependent on international aid,
the less ordinary citizens such as farmers, work-
ers, teachers, or nurses have a meaningful say in
politics and economic policies.”
Good, bad, ugly
Why should so many experts in Africa ques-
tion the good that aid is doing their countries?
Because, while most people in rich countries con-
sider aid to be a simple act of generosity, Africans
understand it is far more complex.
To get a clearer picture of what is happening,
it helps to distinguish among the various effects
of foreign aid in Africa. One category is direct
impacts. These are easiest to measure, and they
are the ones about which we hear the most in the
media—how many people have been vaccinated,
how many schools have been built, and so on.
Direct impacts also include less publicized and
often harmful side effects such as, for example,
the displacement of people by large projects like
dams or mines.
A second type of impact is indirect macroeco-
nomic consequences. Large inflows of foreign
money affect prices and incentives, and the effects
can be damaging to poor people
if the inflows are not managed
well. For example, increases in
aid to Tanzania in the late 1990s
led to inflation, which in turn
led authorities to tighten cred-
it, which meant private firms
found it harder to expand. The
syndrome that economists call Dutch Disease is a
potentially serious problem for African aid recipi-
ents. When a country’s exchange rate is allowed to
fluctuate, large aid inflows strengthen the national
currency, which makes exports less competitive and
imports cheaper. As a result, people depending on
export industries suffer, as do domestic producers
that compete with imports.
Constituting a third and highly controversial
category are the impacts of aid conditionality.
Official development assistance provided by mul-
tilateral institutions and foreign governments
often comes with conditions attached, and these
in effect dictate policy making. These policy
prescriptions have not always been helpful. For
example, international demands during economic
downturns for reduced deficits and increased
interest rates have reflected the policies that many
developed countries, with the sovereignty to make
their own decisions, typically avoid.
But even more problematic than the policies
promoted by donors is a fourth impact of aid—its

effect on the relationship between governments
and the governed. It is generally agreed that
African governments’ shortcomings in account-
ability and effectiveness over recent decades have
been a major factor in the region’s low growth
and insignificant poverty reduction. What is less
discussed, but is becoming increasingly clear, is
that dependency on aid from foreign donors has
undermined development of the basic institutions
needed to govern and the vital link of account-
ability between state and citizen.
In Mali, a recent study by Isaline Bergamaschi
found that, as donors’ influence over policy has
grown, the government’s will and capacity to
take the lead and manage the aid relationship has
declined. “If the current political situation seems
characterized by a certain degree of inertia, a lack
of development strategy, weak capacities, and
compliance with donors,” wrote Bergamaschi,
“it can only be understood as the result of the
weakening of the state and donor entanglement
in national institutions and politics, and several
decades of aid dependence.” Likewise, observ-
ers have described Ghana’s federal budget as
a façade, aimed at satisfying aid donors rather
than serving as a genuine and thought-through
spending plan.
The effect of such dependency has been to
retard African civic development in fundamental
and long-lasting ways. It is what Kamara was
referring to when he talked about ordinary people
not having a meaningful say in decisions about
how their countries are run.
Optimists and pessimists
In response to gradually building pressure
around the globe for more aid, the Group of
Eight industrial nations in July 2005 met in
Scotland and released a communiqué promising
substantially more assistance, though not all that
was being demanded. On top of an agreement
to forgive large amounts of debt, the G-8 mem-
bers pledged $50 billion (some of it previously
announced) in aid to developing nations by 2010,
of which half would go to Africa.
A spokesman for Oxfam International, a leading
British NGO, commented at the time that “The G-8’s
aid increase could save the lives of 5 million chil-
dren by 2010—but 50 million children’s lives will
still be lost because the G-8 didn’t go as far as they
should have done. If the $50 billion increase had
kicked in immediately, it could have lifted 300 mil-
lion people out of poverty in the next five years.”
More Aid Is Not the Answer  •  207
This kind of claim is common on the aid cam-
paigning circuit. Campaigners need to make clear
statements about the impacts of policies. But even
allowing for the fact that mega-calculations will
always be more than slightly arbitrary, yet are
still important to convey the magnitude of what
is at stake, this statement was highly misleading.
Why? Because it was made on the basis of a very
lopsided analysis, which looks only at the most
direct and beneficial outcomes of aid.
If one considers only the positive column on
the balance sheet, ignoring all the damaging
consequences of aid, it is certainly possible that,
if spent well, aid money could have the kinds of
benefits alluded to. Aid spent well can put chil-
dren through school, build infrastructure, and
save lives.
But what about all the other impacts? What
about the possibly harmful effects on exchange
rates and prices, with the serious consequenc-
es these might have on workers and consum-
ers? What about the long-term consequences of
consistently immature and unaccountable state
institutions? Where are these impacts taken into
account when we calculate millions of lives saved
per billions of aid dollars spent?
At the other extreme in debates about aid
to Africa are the aid pessimists. The economist
Dambisa Moyo is currently the most notable of
these, having attracted wide attention with her
2009 book Dead Aid: Why Aid Is Not Working and
How There Is Another Way for Africa. Moyo’s cri-
tique of aid dependency is valid. She is right about
the harm done to the development of effective and
accountable governance in Africa by high levels of
government-to-government aid. But hers is not a
serious analytical study. It is an anti-aid polemic
of a sort common in the conservative media of the
United States, where the only facts cited are ones
that bolster a case, and where exaggeration is con-
sidered par for the course.
Rather than accepting simplistic notions—that
more aid equals less poverty, or that aid only and
always increases poverty—we need to look at the
evidence. All the evidence. In contrast to aid opti-
mists and aid pessimists, who selectively use evi-
dence either to support or to dismiss aid, we need
to recognize that the impacts of aid are complex.
Only when we assess these effects dispassionately
and systematically can we have any real expecta-
tion of making a positive and sustained impact on
human rights, development, and poverty reduc-
tion in Africa.
208  •  CURRENT HISTORY  •  May 2010
Aid realism
This approach can be termed aid realism. Aid
realism means not getting swept away by the
ethical clamor to “do something” when a proper
analysis shows that what is being done is inef-
fective or harmful. And it means not bowing to
an ideological anti-aid position in the face of the
rights and urgent needs of millions of people. It
means carefully analyzing the overall impact of
foreign aid in African nations—first, to see how
aid in itself can be improved, and, second, to
question its importance in relation to other poli-
cies and factors that influence development and
poverty reduction in the region.
Such an analysis emphatically does not lead to
the conclusion that the West should leave Africa
alone. African civil society, while heavily critical of
foreign assistance, is not sitting on its haunches in
despair, and neither should anyone else. There are
many positive measures that rich countries should
take right now to help Africans reduce poverty
and improve human rights.
For example, far more
money flows out of the
continent each year than
arrives there in aid, but
It is hard to find a single African
where are the campaigns nongovernmental organization that is
to stem illegal capital actively campaigning for aid increases.
flows via tax havens?
Likewise, rich countries
need to overhaul rules on international property
rights and foreign investment. They should act on
climate change, and invest more in transferable
technology. They should better regulate an arms
trade that causes turmoil in Africa. They should
do many things they are not doing now.
In fact, it will be almost impossible for African
states to reduce their reliance on aid without the
international community’s adopting a range of
supporting measures. If the first reason to stop
campaigning for aid increases is that aid may be
doing more harm than good in some countries, the
second is that all the emphasis on aid is obscuring
more important policies that the West should be
adopting to help Africans escape poverty.
The dominance of aid in the West’s thinking
about Africa is one of the reasons that other, more
important, actions are not taken. Rich-country
leaders are not feeling enough political pressure to
make the important changes. Aid is easier—never
mind all the problems it brings with it—and it
benefits donors.
After all, geopolitical considerations, not analy-
ses of poverty, have governed most donor choices
about aid spending. Assistance to Africa swelled
during the cold war and then declined in the
1990s, when poverty on the continent was increas-
ing sharply. Now, in the context of a global war on
terrorism, donor nations—including particularly
the United States—again want to use aid to influ-
ence the politics of other countries. But aid is not
always good for the recipient nations’ citizens and
institutions.
Decades of dependency
Dependency is the one issue that, more than
any other, separates the current period from previ-
ous episodes of aid enthusiasm. Aid dependency
can be measured by looking at aid as a percentage
of a recipient country’s GDP, and seeing how that
ratio changes over time. When official develop-
ment assistance started in the 1960s, it accounted
for 2.3 percent of African GDP, similar to the pro-
portion in South Asia (home to large aid recipients
like India and Bangladesh).
What has happened
since is instructive. While
aid to South Asia has
steadily declined, and now
makes up around 1 per-
cent of GDP, aid to Africa
has trended the other way,
skyrocketing in the 1980s
and hardly falling since. It now averages around
9 percent of GDP across Africa (excluding South
Africa and Nigeria), with many countries receiv-
ing much more than that.
Since the turn of the millennium, when this
new era of aid began, aid increases have been
directed not to countries hoping for a boost to
help them out of short-term trouble, but to coun-
tries now severely dependent on aid. When we
look at aid levels in the rest of the developing
world, the contrast is stark. Only a handful of
countries scattered elsewhere across the globe,
such as Nicaragua and Haiti and the small islands
of Oceania, come close to the type of aid depen-
dence seen in Africa. Vietnam, which has seen
aid rise significantly since the 1980s, still relies
on it for only 4 percent or less of its GDP. Aid to
poor countries in the Americas has progressively
shrunk from 0.7 percent of GDP in the 1960s to
under 0.3 percent today.
It is not that no other countries have ever
received large amounts of aid before. The key

factor is that, in Africa, very high aid receipts
have now lasted for decades and have become the
norm. Never has any group of countries been so
dependent on foreign aid for their basic function-
ing, for so long. There is a big difference between
receiving aid as a welcome support and needing it
as a fundamental part of the national budget.
Dependence on foreign governments for finan-
cial assistance has undermined development
efforts in Africa, and it will continue to do so
despite the modern (and laudable) emphasis on
“good governance” and “country ownership.”
Although aid dependency has drawn consider-
able comment both in Africa and among the rich
nations, the fretting has had virtually no impact on
donor policy. Instead, the trend continues—and it
will get worse if promised aid increases actually
do kick in. While the rest of the world (with some
exceptions) appears to be moving on from aid,
Africa is getting more and more aid-dependent.
Government-to-government aid will always
have an important supporting role, a role it has
played with occasional success over the years. In
some countries, depending on their economic and
political contexts, aid increases may be appropri-
ate and helpful. But most countries in Africa,
rather than seeking more aid, should be reduc-
ing the amount they accept. Why? Because when
the whole range of aid’s impacts are taken into
account, it becomes clear that aid at present levels
is hindering rather than helping many countries’
development prospects.
Less aid, more help
The biggest headline from the London Group of
20 Summit in 2009 was, as usual, a huge pledge of
aid (over $1 trillion, much of it double-counted)
to help poor countries. And yet, for all the efforts
put into “aid effectiveness,” the undermining of
institutions continues to be endemic in the aid
relationship. A course needs to be set to reduce,
rather than entrench, aid dependency. In this
regard, in response to the recent global crisis, an
overhaul of the global financial system would pro-
vide a unique opportunity to undo measures that
until now have prevented developing countries
from maximizing their development resources.
One issue coming under increasing scrutiny, for
example, is the complex global web of tax havens
that serves no serious purpose for rich nations or
poor, but is responsible for allowing dodgy deals,
theft, and other crimes to abound. Poor African
countries lose far more every year through capi-
More Aid Is Not the Answer  •  209
tal flight to tax havens than they receive in aid.
Plugging this leak, cracking down on corruption,
and building better national financial systems
could make more credit available to small and
medium-sized businesses—and would also open
an avenue toward reduced dependence on aid.
The likelihood of such reforms has grown since
the global financial crisis erupted.
Other measures that have been considered or
adopted at a range of global meetings in 2009
and 2010 could have repercussions for decades to
come, as the financial architecture is redrawn, and
crucial issues that were previously considered off
the table are suddenly on it. Reform of financial
institutions such as the International Monetary
Fund has been discussed for decades, but the
political will to do something may finally emerge
as a result of the crisis.
Aid will certainly continue to play a role in
this new context, and some African countries
could benefit from aid increases. Botswana is one
example. It received high levels of assistance in
the 1960s and 1970s (averaging 17 percent of
GDP), and during that period its growth perfor-
mance exceeded the growth rates of Hong Kong,
Taiwan, Malaysia, and Thailand. In contrast to
almost all other African countries, aid to Botswana
has steadily declined over the decades. Today
it receives negligible levels of assistance. Yet its
economic boom has been brought to a tragic end
by an AIDS pandemic that slashed life expectancy
from 56 years to 35 in a decade. Botswana could
use more aid again as it seeks to recover.
Other countries, however, should ideally receive
less. Rwanda already funds half its government
spending with aid. Rather than seeking to increase
this proportion, Rwanda should set itself the goal
of reducing it over time. So should other nations.
Developing countries have reduced poverty when
they have implemented the right policies, and
when foreign governments have taken supportive
measures. Aid has been at best marginal to this
effort, and at worst has undermined it.
On the other hand, while government-to-
government aid can have adverse effects, support
for civil society and provision of global public
goods, such as climate change measures and
health technologies, would be a constructive
use of increased aid resources. Politicians prom-
ise more aid when they do not want to make
changes that are more fundamental. Now is the
time for substantial reform, not for counting aid
dollars. ■