Food for African Thought

In this article, author Loretta Napoleoni casts a skeptical eye on the Live8 project. \

by Loretta Napoleoni

The African dilemma has plagued more than a generation of economists and politicians. Since the Sixties, the continent has received over half a trillion dollars in aid, yet today it is poorer than when the grants and loans began. Why? For Bono the answer is simple, what is crippling African economic growth are the debt repayments coupled with a chronic shortage of cash. The solution is even simpler: donors should scrap the existing outstanding debt and double the financial aid. Unfortunately, economics is not a bad pop song performed by an equally mediocre band. It cannot be improved by employing expensive high tech sound technicians; nor can it be transformed into a global hit by pouring vast amounts of money into mega marketing campaigns designed by equally costly mavericks. Economics is the science of hidden equilibrium, of deep contradictions and unknown consequences; it is a live organism, it changes, evolves and shocks us as the world goes by. Like a castle of cards it will collapse in a whisper.

Celebrities populate a world without economics, a planet where money and stardom buy everything. This explains why Bono, who inhabits this world, believes that if we keep pouring interest free moneys into the continent, Africa will buy its way out of poverty. Economists disagree with this vision. What turns a developing country into a developed country is not how much foreign aid it attracts, but how money is spent, in other words how the political elite utilize foreign aid. Most of the half a trillion dollars received by Africa since the Sixties funded military coups, civil wars and overseas bank accounts, not economic development. During the Eighties alone, there were at least 92 attempted military takeovers in sub-Saharan Africa, involving 29 countries. Raymond Baker of the Brookings Institution has calculated during the Eighties and Nineties 35% of Africa’s wealth was taken out of the country illegally. Finally, a large percentage of foreign aid is regularly used to buy military equipment. Between 1982 and 1985, Zimbabwe, for example, spent $1.3 billion out of $1.5 billion of foreign assistance on arms and ammunition.

Foreign aid is also an important form of terrorist financing. In war torn countries, such as Ethiopia, Somalia, Sudan, foreign asset transfer, defined as the redistribution of external assistance and assets in favour of armed groups, is the most lucrative source of revenue for local armed groups. During the civil war in Sudan, the bulk of food aid intended for famine-stricken regions was passed on by local armed groups to Iraq to purchase weapons used against the Sudanese army and the population. Governments are equally involved in this form of robbery. The Sudanese government utilised its share of the loot to purchase Iraqi oil required to sustain the war machinery against its opponents and to pay military advisers from Iran. Asset transfer is so widespread that donor countries tacitly accept a built-in 5 per cent standard diversion of any aid, in cash or kind. For certain African countries this percentage is as high as 20 percent. Thus since the Sixties, African terrorist groups have enjoyed a cash injection from donors equivalent to 5 to 20 per cent of half a trillion dollars.

The hard to digest truth is that aid initiatives, such as Live Aid for Ethiopia in the mid 1980s and Live8 today, although well intentioned, end up sustaining civil wars which are at the root of the economic problems of Africa. In the early 1980s, it was not the two consecutive years of drought which caused the famine in Ethiopia. What plunged the country into starvation was the massive dislocation produced by a decade of wars between Addis Ababa and both the Eritrean guerrillas and the Tigrean People's Liberation Front. Between 1982 and 1985, Ethiopia received $ 1.8 billion in foreign aid, including Live Aid’s contribution; far from feeding the starving population, the bulk of the money, a total of $1.6 billion, went to purchase military equipment. Without knowing or intending it, Live Aid and foreign donors subsidised the politics of war unleashing a ruthless fight between armed and criminal groups and the government to take possession of foreign aid. Live Aid and Western aid sealed the tragic destiny of Ethiopia, a country which today is poorer than in the early 1980s.

When foreign aid is not stolen at the source, i.e. before cash or products reach the population in need, people are robbed in their own homes. Another popular form of terrorism financing in Africa is domestic asset transfer, goods are ‘confiscated’ by armed organizations at road blocks scattered around the territory they control or through raids against villages. This straight forward thievery often results in extreme hardship, as happened in Sudan. During the civil war in Sudan, the Bagara militia from the north pillaged villages in the south, regarded as the stronghold of the SPLA (Sudanese People’s Liberation Army), the local armed group. Among other atrocities, the militia was responsible for widespread cattle-raiding, which destroyed the sustenance economy of the local population and led to famine in South Sudan.

Foreign aid is the true cause of the malaise of Africa, an economic virus as infective and deadly as AIDS. Swedish economist, Fredrik Erixon, has even proved that since the Seventies, the volume of aid received by African countries has been inversely proportional to economic growth. Far from being a cure, foreign aid is a disease. The more money a country receives, the more it sinks into poverty. Tanzania and Kenya, two countries which in the 1960s, after independence, enjoyed vigorous rates of growth until they began to stagnate in the mid 1970s. Economic decline coincided with the advent of foreign aid. Form the 1970s to 1996, Tanzania and Kenya, each received about 16 billion dollars in aid. This money was used to implement disastrous economic policies. Tanzania pursued a form of African socialism and Kenya a policy of import substitution. Foreign aid did not bring political stability either, in the summer of 1998, members of al Qaeda attacked the US embassies of Kenya and Tanzania causing hundreds of deaths. In sharp contrast, from the Seventies to the end of the Nineties, Botswana, a country which has attracted very modest foreign aid, has grown more than China (GDP per capita rose from $1,600 in 1975 to $8,000 in 2004) and politically is one of the most stable countries in Africa.

Charities are equally bad for Africa. Saudi and Malesian Islamist charities have been infiltrated by Wahhabist who use them to pour money into Muslim communities. Funds build mosques and madrasses, religious schools, in which African Muslims are indoctrinated with hatred for the West. In 1993, Al Qaeda channeled through some of them rewards to the perpetrators of the lynching of 18 US soldiers in Somalia. Imagines of their bodies dragged in the sandy streets of Mogadishu were too much for America to bear; the US army was airlifted out leaving Somalia of existence as a ‘collapsed state’. George Bush is well aware that canceling the outstanding debt, sending more money to Africa and having his picture taken with Bono, is a safer way to ‘help’ Africa while winning the votes of a few pop fans.

The problem of Africa is not economic but political. Good governance not money will solve it. John Reader, author of Africa: A Biography of the Continent, described in his book the success story of Ukara, a small, Tanzanian island in Lake Victoria. A densely populated island with poor sandy soil, no natural vegetation or resources, Ukara has never suffered a shortage of food or famine. For Reader Ukara’s success is linked to its system of private ownership of property and the absence of chiefs or dictators.

African economists are adamant that Africa does not need more foreign aid, it needs a bourgeois revolution: the emergence of an entrepreneurial middle class which will create local jobs by making and selling products other folk want to buy. Here is some food for thought for Bono, Geldof and Shiffer. Perhaps better results could be achieved if at the G8 in Scotland Geldof promotes Bono’s new clothing line manufactured in Africa and Claudia Shiffer, in the absence of black pop stars such as Tina Turner, models the garments among the politicians and their spouses. Who knows, Cherie Blair and Laura Bush may even like them and start a new fashion trend. But, I guess, this would involve too much economics.

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