The bribes paid by Western companies to loot Africa’s natural resources are useful reminders of what should be self-evident: it would be quite impossible for Africans to steal the quantities involved without outside help. In fact, such bribes are just one component in what Patrick Smith, editor of London’s Africa Confidential magazine, calls “a system run by an international network of criminals: from the corrupt bankers in London and Geneva who launder the money; the lawyers and accountants in London and Paris who set up the front companies and trusts to collect the bribes or ‘commissions’; the contract-hungry Western company directors who offer the bribes and pocket some for themselves.”
As Michela Wrong illustrates in her book In the Footsteps of Mr. Kurtz, the scale of theft carried out by Mobutu suggests his foreign financial backers must have been aware that much of the aid and loan monies intended for
Natural resources and cash are by no means the only items being drained out of Africa. As it did during the slave trade, the continent is once again giving the West its most precious resource — its best, brightest, healthiest, and most productive people. In effect, African countries are using their meagre resources — often from foreign aid ostensibly aimed at “capacity building” — to train professionals who end up in Europe or North America. Thus, a good chunk of our foreign aid to
This includes university graduates and professionals in all fields, but is most extreme in the health sector. No African country can afford to lose a single health-care professional. The
At every step, Africa finds itself the victim of double standards. The continent is routinely forced to play by the rules of free trade though the West ignores these rules at will. According to NGO Christian Aid, sub- Saharan Africa is $272 billion worse off thanks to the free-trade policies forced on it as a condition of receiving Western money. At the same time, the countries of the Organisation for Economic Co-operation and Development (OECD) spend $1 billion a day in agriculture subsidies (mainly to large agribusinesses), allowing them to flood Africa with commodities at lower prices than African producers can match. This protects their own farmers and makes it virtually impossible for African products to gain a foothold in Western markets. Bizarrely enough, it’s now cheaper for a Ghanaian to buy an imported European- raised chicken than a locally raised one. According to CorpWatch, in 1992 domestic poultry farmers supplied 95 percent of the Ghanaian market; by 2001, their market share had dwindled to 11 percent. The pattern has been the same elsewhere; poor African countries lose substantial and sustainable local industries as they are forced to open their markets to cheap imports.
As for the overseas development assistance (ODA) that all Western governments include in their budgets, there’s a dirty little secret about all those billions. It’s not just that most countries could easily be far more generous; the real story of ODA is how much less has been delivered than almost everyone believes. Many bemoan the billions of aid dollars that have flooded into Africa over the past forty-odd years with precious little to show for it. Now recent research by the British NGO ActionAid, among others, has demonstrated the pathetic reality behind the official numbers.
It’s often difficult to determine what constitutes ODA in any country’s budget; debt relief, for example, is often lumped in as a form of aid, and some countries still commonly receive aid money for geopolitical rather than developmental purposes, badly distorting the data. Much aid, in fact, directly benefits the donor country, as it is tied to the purchase of goods and services from the donor. This makes little sense in terms of costs or efficiency: food purchased through tied aid, for example, is 40 percent more expensive than what could be acquired through open market transactions. As a result, sub-Saharan Africa effectively loses between $1.6 and $2.3 billion of the annual aid it receives. Though the US and
Tied aid is but a manifestation of a larger category known as “phantom aid.” As described by ActionAid, in addition to tied aid, phantom aid involves a “failure to target aid at the poorest countries, runaway spending on overpriced technical assistance from international consultants, tying aid to purchases from donor countries’ own firms, cumbersome and ill-coordinated planning, implementation, monitoring and reporting requirements, excessive administrative costs, late and partial disbursements, double counting of debt relief, and aid spending on immigration services.”
All of these factors deflate the value of actual aid being delivered. Of the $79 billion reported as aid granted by the oecd in 2004, ActionAid insists that only $42 billion was actual aid. In real aid terms, the
Between meagre aid, phantom aid, tied aid, and aid pilfered by recipient governments, it’s far from evident how much of an impact aid actually makes on Africa. While there’s little question of the benefits aid confers upon the private sector in donor countries, for Africans the consequences of the aid scam, together with other facets of the great collusion between Western and African elites, could hardly be clearer.
To meet their bottomless pit of urgent needs, African governments have available resources so grossly inadequate that it’s almost laughable. Many Westerners travel to Africa with more health paraphernalia than can be found in typical African clinics. When I visited a clinic in
To be continued
By Gerald Caplan
Gerald, Principal author of
First Published in The Walrus Magazine