Foreign Aid, Blessing or Bane: A Case Study of Foreign Aid’s Impact on Sub-Saharan Africa

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In August of 2018, the Trump administration introduced new conditions on billions of dollars in foreign aid spent through the UN and other multinational agencies. This decision revitalized the discussion of foreign aid, a hotly contested issue. According to Oxford Public International Law, foreign aid refers to the transfer of resources from a donor to a developing country. It comes either in the form of loans, which require repayment in the future, or in the form of grants. While foreign aid is often intended to help developing countries, some groups within donor governments use foreign aid as a tool to harm the economic independence of developing countries by creating dependency and other unfavorable political conditions in recipient countries.

Countries in Sub-Saharan Africa typically receive large amounts of foreign aid. According to New World Encyclopedia, Sub-Saharan Africa is the term used to describe the region of the African continent that lies south of the Sahara Desert. Although countries in this region posses vast amounts of natural resources, the region remains impoverished, and the continent of Africa as a whole has been identified as the world’s poorest inhabited continent. In recent years, however, countries in Africa have experienced significant improvements in infrastructure, education, and healthcare, and in 2017, the African Development Bank reported Africa to be the world’s second-fastest growing economic region. In some instances, this success can be attributed to foreign aid. While foreign aid has been playing an important role in this continent’s development, its real impact, true intention, and future effect, however, still remain controversial. This article will examine both the short-term and long-term impact of foreign aid in Sub-Saharan Africa.

One of the many types of foreign aid is emergency aid, which is rapid assistance given to countries suffering from immediate distresses, such as natural disasters. In Sub-Saharan African countries, where health-care related infrastructure remains underdeveloped, short-term emergency aid can be beneficial during a time of crisis such as natural disaster.

According to USAID, more than 13.1 million people in Sub-Saharan Africa face emergencies due to disasters such as drought and cyclones during the Lean Season. Among them, about 7.1 million people experience food shortages and 3 million experience water shortages. In such instances, foreign aid has proved remarkably effective: foreign aid assistance for cyclone-affected populations in Madagascar restored access to safe drinking water for 32,000 people in 2017.

While foreign aid does provide short-term relief in face of natural disasters, the long-term impact of this politically tied aid is detrimental. Foreign aid, especially food aid, often results in massive influx of cheap goods. Though intending to help consumers in recipient nations, donor countries often floods recipient markets with cheap or even free goods. In the case of Sub-Saharan Africa, countries’ local businesses are subject to being squeezed out of the market, thereby undermining local industries. This is what happened in Costa Rica in 1980s after cheap imported grain flooded into local market. From 1984 to 1989, the number of farmers growing corn, beans, and rice fell from 70,000 to 27,000, amounting to loss of approximately 42,300 livelihoods. The same also happened in Kenya. In 1993, European Union (EU) wheat was sold in Kenya at a price level that was 50 percent cheaper the domestic level with the hope of relieving the damage in agriculture after severe drought in 1992. As a result, in 1995, Kenyan wheat prices collapsed through oversupply, damaging local agricultural and food production, and creating severe poverty for this country in which 80 percent of its exports are accounted for by agriculture. While the motives behind foreign aid are ostensibly benevolent, these instances show how easily the intention can be twisted and turned against recipient countries.

The essence of neo-colonialism is that the state which is subject to it is, in theory, independent and has all the outward trappings of international sovereignty. In reality, its economic system and thus its political policy is directed from outside.

The loss of sovereignty by neo-colonialism occurs through a variety of mechanisms. First, foreign aid, when misused, can cause substantial harm  in recipient countries. While the initial purpose of development aid is to help boost overall social stability and economic performance in developing countries, recipient countries often divert a large percentage of development aid into military development that is directly used to repress domestic dissent. For example, in the Arab Spring of 2011, governments across Africa used their armed forces to hinder the democratic process. Reports showed that around 40% of African military spending is financed by OECD aid due to aid fungibility, which refers to the possibility that aid is used in ways not intended by donors. The vague restrictions on foreign aid enabled donors to  use aid, especially bilateral aid, for their own purposes. Take the Economic Support Funds (ESF) in US bilateral economic assistance as an example. Although it is officially listed as economic aid, ESF is considered as a form of military assistance since it is used to financially support countries that are deemed politically and strategically important to US. In more extreme cases, donor countries even directly aid local regimes to suppress dissent. For instance, Britain provided the government of Sierra Leone with tanks, which were then used to attack dissidents during a civil war in 1990s. For decades, African countries’ failure to independently operate their own governments gives colonialism a chance to return in a more subtle form and harms the already established social and economic orders.

Recognizing the dilemma brought by foreign aid, Sub-Saharan African countries must reconsider the types of aid that are permitted to flow into their countries. While the short-term benefits brought by foreign aid to Sub-Saharan African countries are necessary and significant especially during times of emergency, the recipient countries must be aware of the potential harm, long-term reliance, and other political implications that come with it. At the end of the day, achieving economic advancement is necessary to fulfill greater political and economic independence, a major goal for Sub-Saharan African countries that relies on their own ability to develop skilled and educated labors, reduce corruption in political institutions, and reinforce capitals of production through technology development and infrastructure improvement.

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