Africa is a continent made up of over a billion people living in 54 countries. The continent has the most countries in the world and also has the largest concentration of poorest countries than any other continent. Many countries on the African continent rely on foreign aid to maintain their economies, nonetheless, research shows that foreign aid rarely or never helps most country’s economies and has failed to assist countries meet economic development.
Today, Africa’s private capital inflow is surpassed by the international aid inflow; this has affected the general development of people and businesses on the continent, with Africa having over 70% of the total global poor population.
This article takes a look at the possibility of African nations surviving without foreign aid.
How foreign aid works
For several years, foreign aid has played a significant part in Africa’s development strategy, today all African countries collect aid from foreign donors, this includes African countries like Nigeria, South Africa and Egypt, which possess stronger economies and a more stable financial system. The goal of foreign aid has always been to alleviate poverty, accelerate socioeconomic progress and promote long-term development on the African continent.
Nonetheless, despite the claim for development through foreign aid, Africa has dropped and is rather declining than improving. In 1970, Africa accounted for only 10% of the entire world’s poverty population; today, the number has increased to 75% with the number of poverty expected to increase to 90% by the year 2050. Following the above decline there has been continued doubt that foreign aid plays a significant influence in shaping Africa’s economic growth.
Foreign aid in Africa takes varying forms, which include financial donations, technical assistance, capacity building, debt reduction and infrastructure development. The donation can take the form of multilateral aid, which is aid from international bodies like the International Monetary Fund (IMF), the World Bank and others. It also takes the form of bilateral aid, which is aid provided by one country to another.
Foreign aid is usually dispersed to Africa on varying criteria adopted by the international donor, these criteria include but are not limited to the African country’s basic needs, political ideology of the country, and development aspirations. Donations through foreign aid are often done through several national assistance programs, which include specific goals and intervention areas. Some areas that take significant priority are education, poverty elevation, healthcare delivery, infrastructure development, governance, and environmental sustainability.
How Africa can survive without foreign aid
Let’s face it, the foreign aid trend has done little or no good to Africa. A majority of these foreign aids are left in the pockets of selfish and corrupt politicians or are wasted on projects that add no significant change to Africa. Corruption has been traced as a major reason African heads of state go the extra mile to gain foreign aid. Below are some of the steps Africa must take to survive without foreign aid.
1. Strengthen domestic resources
Africa has to place increased concentration on maximizing domestic resource mobilization on the continent. This is the first step to increasing private capital contribution to African states and attaining self-sufficiency for African nations.
The African continent is blessed with several natural resources and is among the top natural resource holders in the globe, however, these natural resources are either lost to the wrong hands or are wasted due to poor mobilization and resource monitoring. A typical example was the waste and loss of crude to oil bunkers in Nigeria.
The untapped economic possibilities and developing market growth from Africa can allow African nations to increase revenue collection and minimize Africa’s dependency on foreign aid in general. Africa should focus on developing infrastructure for strong monitoring and mobilization of its natural resources with an inclusive and transparent tax regime.
2. Promoting economic diversification and industrialization
Industrialization in Africa is the key to economic progress. In today’s world, Africa ranks low below international standards when it comes to industrialization with most countries on the continent importing the most insignificant of things from other countries.
Africa is largely classified as a consuming rather than a producing nation with significant countries on the continent depending on natural resources and tourism to scale through their varying economies. Africa must work to strengthen economic diversification and modernization to lessen its reliance on foreign aid.
African states diversifying to the industrial sector can promote economic growth in the continent through the provision of employment opportunities, improving infrastructure, and supporting sustainable development on the continent through shifting from the over-reliance on basic commodities. African nations can choose to invest in varying sectors that would ultimately improve their economies, from technology to manufacturing, construction and also services in the industrial sector. To begin the industrial revolution on the African continent, several investments must be made in education, policy formation, infrastructure and regulations that foster domestic growth.
3. Enhance inter-African trade
Enhancing trade among African countries is vital to sustainability in Africa. The African continent is largely self-sustaining when united but less when divided. Today, more than 90% of everyday goods used in Africa are imported, and some of the goods imported are produced in other African nations. Africa must look within to establish its economic potential when placed together.
Regional trade is pivotal to the continuous promotion of inter-Afrcian commerce through the promotion of regional integration, the elimination of trade barriers and the eventual development of strong regional marketplaces.
The eventual trade among African nations can greatly improve economic growth which in turn would foster an increased rate of self-reliance among African nations. The recent launch of the African Continental Free Trade Area (AFCFTA).
4. Technology advancement
Due to technological advancements, Africa now has various options for avoiding traditional growth paths and reducing its need for foreign assistance. By adopting digital technology, boosting internet access, and fostering innovation ecosystems, Africa can increase productivity, improve service delivery, and encourage economic growth. Growth in technology may also increase knowledge interchange and aid African nations in solving their special challenges.
Conclusion
Foreign help has long been a lifeline for many African countries, providing financial assistance, technical expertise, and resources to support development efforts. Yet, the continent’s reliance on foreign aid raises concerns about its long-term sustainability, self-sufficiency, and ability to manage its problems.
There has been a growing emphasis in recent years on finding ways for Africa to become self-sufficient and less reliant on foreign aid. This essay delves into the possibilities and methods that might assist Africa in thriving without relying on foreign handouts.
