Student: Siphosethu Khambule

Student Number: 221056065

Module : POLS206 Contemporary African Politics & Development

Task: Individual Essay

Topic : Critically analyse the political and economic consequences (negative/positive) of

foreign aid for Africa’s development and locate your discussion within current experiences of
the COVID19 pandemic in Africa.
The debate relating to the effectiveness and ineffectiveness of foreign aid in the success and
development of African counties is one of the most common debates . Foreign aid can be
defined in a variety of terms but according to , (Wallstreetmojo , 2022), “ foreign aid or
international aid refers to the voluntary transfer of resources like money , goods , weapons ,
technical services or even training from developed countries or international organisations to
developing countries in a form of a loan or charity, with the aim to address issues like
pandemics , emergencies , crisis etc.’’. This essay will critically analyse the economic and
political consequences of foreign aid for Africans with reflection to the current experiences
like the Covid 19 pandemic.

One of the most obvious benefits of foreign aid is the fact that a form of help is given to
developing countries who are in crisis. Foreign aid may promote economic growth and it can
also be a tool to reduce poverty with varying levels of success depending on how the aid is
implemented. A recent case of foreign aid at work could be the pandemic of Covid 19 , the
United Nations and the IMF have provided aid with regards to fighting the virus. The World
bank organisation approved South Africa’s request for $750 million development policy loan
which was a loan to support the government to speed up its Covid 19 response aimed at
protecting the poor from the socio-economic impacts of the virus( The World Bank: 2022).
People who lost their jobs due to the pandemic were able to apply for an unemployment grant
and municipalities at the local governments handed out food parcels to some of those people
in need, all of that was possible through the availability of foreign aid. Foreign aid saves lives
when emergencies occur and provides basics for people affected in the crisis. Another
positive aspect of the aid is that it creates diplomacy among recipients and donors which
could in the long run , create job opportunities and better security.

According to IE University(2020), countries give foreign aid due to many reasons , one being
moral and ethical reasons , aid could be given as a form of compensation for the past offenses
and past exploitations by the developed countries to the developing countries. Another reason
for giving out of aid could be to counter the uneven distribution of wealth and to promote
shared prosperity. However , critics to foreign aid , argue that the aids are created just for the
benefit of the donor. A disadvantage of the aid is that donors tend to benefit more from the
aid , as many of these aids come with terms and conditions , some countries have to sacrifice
some commodities in exchange for aid , so why would one say these aids are for the
development of developing countries if the end game leads to them being further exploited?
Kwame Nkrumah (1966 ) believes that aid is used as an economic and monetary tool to
colonise the African countries, he further mentions that the less developed world will not
become developed through the so called ‘good will’’ of aid because all that aid does is create
more levels of dependency to the westerns , they lend Africa huge amounts of money
knowing that paying back is not easy. It is said that aid increases the level of dependency ,
developing countries have to developed countries. Through the IMF making funds available
to Africans during the pandemic , the risk of dependency towards the developed countries,
continues to increase. The often-said quote of Chinese philosopher , Lao Tzu, “If you give a
man a fish, you feed him for a day. If you teach a man to fish, you feed him for a lifetime’’ ,
is one that is applicable in the case of Africa. Giving of aid is not enough rather the Africans
must be taught to make their own money.

The IMF and the World bank are examples of institutions which offer foreign aid to
developing countries. The World bank aims to eradicate poverty through borrowing money to
countries for specific projects however, these institutions can be critiqued because they have
a lot of leverage to make sure they get their money back , for example in the case that
African countries who received aid during Covid 19 cannot pay back the money given as aid
or loan, the IMF has a lot of power and leverage to physically get into a country and send it’s
people to restructure the economy and policies through influence in policy making , for
example they could increase the tax rate , of which would have a negative impact on Africa’s
economy and citizens standard of living . The decline of basic incomes and increase of
poverty in Africa over the years is possibly partially caused by the IMF and World bank’s
financial aid,

It is also evident that even with the existence of such aid , little or no improvement has been
made as Africa continues being oppressed and remains the poorest continent in the world
according to the GNI (Tang, K :2017). According to Moyo(2008) , “despite the developed
world’s aid of over $ 1 trillion to Africa , there has not been economic growth nor poverty
reduction , she further mentions that between 1970 and 1998 , during a period where the
giving out of aid was at its highest , the poverty in Africa still rose from 11 to 66 percent”.

Another challenge of foreign aid is lack of information regarding the aid that is needed by
recipient countries , when you help someone, you need to know exactly where their needs
reside. Donors often make the mistake of not educating themselves about the actual problem
African countries are facing. Offering vaccines to people because there is a virus does not
mean their problem is solved perhaps food is what they require for their needs to be satisfied.
Being ignorant of the African’s needs has led to ineffectiveness of the aid programmes.

Foreign aid also opens a gap for corruption ,because donations are indirect, and they are
made through institutions and politicians and not directly to those in need. Corrupt
government steal aid and do not use it to provide public goods rather , the aid is used as a
way to make the political elites become richer. Izobe ( 2022), mentions that foreign aid has
brought problems to Somalia such as the violent rivalry for control over large scale food aid ,
which is partly responsible for the government collapse in Somalia. Aid has resulted to
Somalia’s economy being corrupt. Another example , the aid that was received by South
Africa was for building of hospitals and supporting the health of people during the pandemic ,
however due to corrupt leaders there is no evidence of even one hospital that has been built ,
rather there was a lack of hospitals even after the aid had been given , there has been signs of
corruption and a misuse in funds by those in power. Aid further ruins the relationship
between the state and citizens by making the government dependent on foreign donors for
finances ,which makes the government lose interest in the productivity of its own citizens.
Foreign aid alone does not harvest positive impact unless the recipient’s countries
environment is stable.

Despite the good intentions that may be behind foreign aid , negative factors like corruption
and poor governance hinder the aid from being a blessing to African countries and has led to
it being rather a curse. However, if aid was to be given to countries with strong democratic
institutions and great implementation strategies , it might create a positive impact. Africa still
has a long way to go with regards to decolonising themselves and fighting for its economic
independency , and such can only be achieved through unity and cooperation. This essay has
highlighted the positive and negative aspects of foreign aid on African countries and has
given reference to contemporary politics and economics through reference to Covid 19.

References
IE University, 2022. What is foreign aid, and does it work? [online] Youtu.be. Available at:
https://youtu.be/5jCKSKYAzyQ [Accessed 24 August 2022].
Izobo, M., 2022. The impact of foreign aid in Africa: A case study of Botswana and Somalia.
[online] Luc.edu. Available at: https://www.luc.edu/media/lucedu/prolaw/documents/volume-
5/2020%20PROLAW%20Journal%20Mary%20Izobo.pdf [Accessed 26 August 2022].

Moyo, D. 2008. Dead Aid. [online] Available at:

<·https://www.researchgate.net/publication/38091995_Dead_aid_Why_aid_is_not_working_
and_how_there_is_a_better_way_for_Africa >

Nkrumah, N. 1966. Neo-colonialism: the last stage of imperialism. International Publishers

Co. Inc. United States. Available
at: https://politicalanthro.files.wordpress.com/2010/08/nkrumah.pdf  [ Accessed 14 August
2022]

Tang , K and Bundhoo , D.2017. Foreign aid and economic growth in developing countries:
evidence from Sub-Saharan Africa. [online] Available at:
<https://www.scirp.org/journal/paperinformation.aspx?paperid=78442> [Accessed 28
August 2022].

 The World bank. 2022. South Africa’s Covid 19 response gets a $750 million boost. [online]
Available at: <· https://www.worldbank.org/en/news/press-release/2022/01/20/south-africa-s-
covid-19-response-gets-a-750-million-boost > [Accessed 21 August 2022].

Nkrumah, N. 1966. Neo-colonialism: the last stage of imperialism. International Publishers

Co. Inc. United States. Available
at: https://politicalanthro.files.wordpress.com/2010/08/nkrumah.pdf  [ Accessed 14 August
2022]

Wallstreetmojo. 2022. Foreign Aid- Definition, Types . History , how does it work? [online]
Available at: < https://www.wallstreetmojo.com/foreign-aid/> [Accessed 19 August 2022]