Trade Not Aid

Trade Not Aid:

'via Blog this'

Africa has received over US$ 500 billion in Aid over the last 50 years and yet despite these huge inflows, the continent remains mired in poverty, disease, and systemic corruption.

There are many problems in using Aid as a vehicle for development. This is because handouts have never been an effective way to achieve economic transformation. There are several reasons for this:

1. Aid is really not Aid. Most Aid programs are poorly structured and constrained by conditionalities. This undermines the independence of recipient countries and the management of their economic affairs.
2. Aid Erodes accountability. Providing Aid through the governments of poor countries erodes accountability because governments become more accountable to donors than to their own citizens.
3. Aid leads to a chronic dependency on donors. Because poor countries are dependent on donor handouts they fail to prioritize the generation of domestic resources. This creates a chronic dependency on Aid, stifles creativity and undermines the dignity of people.

The case for Trade as a driver for economic growth has been proved in history and is one of the most fundamental tenets of economic theory. In the literature of development economics, handouts do not feature as building blocks for prosperity. Therefore the idea that Aid can be a solution to Africa's development challenges flies in the face of the evidence of what drives growth, creates jobs, and brings prosperity to our societies.