George Ayittey,
Washington, DC The writer, a native of Ghana, is
a Distinguished Economist at American University
and President of the Free Africa Foundation. His
new book is Africa Unchained
(Palgrave/MacMillan). This article is culled from
his May 10 testimony before the
Standing Committee on Foreign Relations of the Senate of Canada.
He will be appearing on Jim Lehrer NewsHour
tonight at 7:00 pm to discuss the issue of
African aid with Professor Jeffrey Sachs.
My talking points are pasted below.
Smart Aid for Africa
George B.N. Ayittey, Ph.D.
Mired in grinding poverty and social destitution,
Africa cries for help. A cacophonous
galaxy of rock stars, anti-poverty activists, and
heads of state are calling on the G-8
countries to cancel Africa’s $350 billion
crippling foreign debt and double aid to the
continent. British Prime Minister Tony Blair will
make aid to Africa the centerpiece in
Britain's presidency of the G-8 meeting in
Gleneagles, Scotland in July. Live 8 is
planned for July 2. After meeting with President
Bush on June 10, modalities are being
worked out to cancel at least $34 billion in debt
of 27 of the world’s poorest nations,
mostly African. Will this African Marshall Aid Plan work?
Africa’s plight follows a ten-year attention deficit cycle. Every decade or so,
mega-plans are drawn up and rock concerts held to
whip up international rescue mission
for Africa. Acrimonious wrangling over financing
modalities ensues. Years slip by, then a
decade later, another grand Africa initiative is
unveiled. Back in 1985, there was Live
Aid and a “Special Session on Africa” held by the
United Nations to boost aid to Africa.
Then in March 1996, the U.N. launched a $25
billion Special Initiative for Africa. In
September 2005, the plight of Africa will again
take center-stage at a U.N. conference
with clockwork precision. Expect another major initiative for Africa in 2015.
Helping Africa of course is noble but has now
become a theater of the absurd – the blind
leading the clueless. A recent IMF study
estimated that Africans in the diaspora remit
$32 billion annually back to Africa, with the
main destinations being Ghana, Nigeria, and
Kenya. About $7 billion is sent to southern
Africa (Ghana News Agency, Accra, May 31,
2005). The amount Africans abroad remit back
exceeds the $25 billion Tony Blair seeks to
raise.
Nigerian President Olusegun Obasanjo says corrupt
African leaders have stolen at least
$140 billion (£95 billion) from their people
since independence. The World Bank estimates
that 40 per cent of wealth created in Africa is
invested outside the continent. Even the
African Union, in a stunning report last August,
claimed that Africa loses an estimated
$148 billion annually to corruption – or 25
percent of the continent's Gross Domestic
Product (GDP). Rather than plug the huge
hemorrhage, African leaders prefer to badger the
West for more money. And the West, blinded by its
own racial over-sensitivity and guilt
over the iniquities of the slave trade and
colonialism, obliges. This is the real tragedy
of Africa.
Between 1960 and 1997, the West pumped more than
$450 billion in foreign aid – the
equivalent of four Marshall Aid Plans – into
Africa with nothing to show for it. Contrary
to popular misconception, foreign aid is not free
but a soft loan. Outright debt relief
and massive inflow of aid without any
conditionalities, safeguards or monitoring
mechanisms is absurd. It is akin to writing off
the credit card debt of a drunken sailor
and allowing him to keep the same credit cards.
No African government has been called
upon to give a full public accounting of who took
what loan and for what purpose since
many of Africa’s foreign loans taken in the past
were misused and squandered. No
government official has been held accountable;
instead, irresponsible past borrowing
behavior is being rewarded.
More distressing, much of the new aid money will
flow directly into an African government
budget – a huge black maze of vanishing tax
receipts, extra-budgetary expenditure items,
perks and off-budget “presidential privy
accounts,” redolent with graft, patronage and
waste. Over the past few decades, African budgets
have careened out of control. State
bureaucracies have swollen, packed with political
supporters. Back in 1996, 20 percent of
Ghana's public sector workforce was declared
redundant by the Secretary of Finance and
Guinea’s 50,000 civil servants were consuming 51
percent of the nation's wealth. In
Kenya, civil service salaries take up half the
budget; in Uganda, it is 40 percent.
Zimbabwe has 54 ministers; Uganda with a
population of 35 million has 70, while Ghana,
with a population of 22 million, has 88 ministers
and deputy ministers. With bloated
bureaucracies, soaring expenditures and narrow
tax bases, budget deficits have soared.
They are covered with World Bank loans and
foreign aid (Ghana’s budget is 50 percent
aid-financed and Uganda’s is 60 percent). If the
aid is insufficient, the rest of the
budget shortfall is financed by printing money.
Even when is aid available for “budgetary
support”, there is no guarantee that it will be
used productively to generate a return to
repay the soft loan. It could well be “consumed”
when it pays for the salaries of civil
servants. Writing off Uganda’s debt does not
eliminate the aid dependency. In fact, when
the World Bank canceled $650 million of Uganda’s
debt in 1999, the first item President
Yoweri Museveni purchased was a new presidential jet!
British Prime Minister thinks he can cajole or
browbeat African leaders into curbing
corruption and ensuring that resources released
by debt relief are put to some good use –
such as increased spending on education and
health care. But the push for good governance
and reform must come from within – from African
civil society groups, organizations and
the people. However, in country after country,
chastened by diabolical restrictions,
these groups have no freedom or political space to operate.
Carlos Cardoso, an investigative journalist, was
murdered in November 2000 for uncovering
a bank scandal in which about $14 million was
looted from Mozambique's largest bank, BCM,
on the eve of its privatization. The official in
charge of banking supervision, Antonio
Siba Siba, was also murdered while investigating
the banking scandals. Such was also the
fate of Norbert Zongo, a popular journalist in
Burkina Faso, who was gunned down on Dec
13, 1998, while investigating official
corruption. In September 2001, President Isaias
Afwerki closed down all the independent media and
arrested its staff, quashing calls for
democratic reforms. In all, the government shut
down eight private newspapers and
arrested its journalists, picking them up in
their newsrooms and homes and from the
streets. They were held in a central jail until
April, 2002, when they threatened to
begin a hunger strike to protest their detention.
They were then transferred to an
undisclosed location.
In neighboring Ethiopia, President Meles Zenawi,
a member of Tony Blair’s Africa
Commission, just held fraudulent elections.
Anticipating public outrage, he banned street
demonstrations for one month and assumed full
control of the country’s security forces.
When the opposition rallied to protest the
results dribbling in, the police opened fire,
killing 26; opposition leaders have been placed
under house arrest. Witness the election
machinations in Egypt.
The paucity of good leadership has left a garish
stain on the continent. Worse, the
caliber of leadership has distressingly
deteriorated over the decades to execrable
depths. The likes of Charles Taylor of Liberia
and Sani Abacha of Nigeria even make
Mobutu Sese Seko of formerly Zaire look like a
saint. In an unusual editorial, The
Independent newspaper in Ghana wrote: "Most of
the leaders in Africa are power-loving
politicians, who in uniform or out of uniform,
represent no good for the welfare of our
people. These are harsh words to use on men and
women who may mean well but lack the
necessary vision and direction to uplift the
status of their people (The Independent,
Ghana, July 20, 2000; p.2).
The crisis in leadership remains a major obstacle
to poverty reduction and has many
manifestations. It is characterized, among
others, by the following dispositions and
failings: The "Big Man" syndrome, subordination
of national interests to personal
aggrandizement, super-inflated egos, misplaced
priorities, poor judgment, reluctance to
take responsibility for personal failures, and
total lack of vision and understanding of
even such basic and elementary concepts as
"democracy," "fairness," "rule of law,"
"accountability," and "freedom" -- among other
deficiencies. In some instances, the
leadership is given to vituperative utterances,
outright buffoonery, stubborn refusal to
learn from past mistakes, and complete absence of cognitive pragmatism.
Believing that their countries belong to them and
only them only, they cling to power at
all costs. Their promises are worth less than Al
Cappone’s. They stipulate constitutional
term limits and then break them: Angola, Chad,
Gabon, Guinea, and Uganda. African leaders
themselves drew up a New Economic Partnership for
Africa’s Development (NEPAD) in 2001,
in which they inserted a Peer Review Mechanism
(PRM), by which they were to evaluate the
performance of fellow African leaders in terms of
democratic governance. What happened?
To be fair, they acted in reversing the “military
coup” in Togo in February but went on
vacation when elections were stolen in Zimbabwe and Togo.
Ask them to cut bloated state bureaucracies or
government spending and they will set up a
“Ministry of Less Government Spending.” Then
there is the “Ministry of Good Governance”
(Tanzania). They set up “Anti-Corruption
Commissions” with no teeth and then sack the
Commissioner if he gets too close to the fat cats
(Kenya) or issue a Government White
Paper to exonerate corrupt ministers (Ghana in
1996). To be sure, multi-party elections
have been held in recent years in many African
countries but the electoral process was so
contumaciously manipulated to return incumbents
to power. Four such “coconut elections”
have so far been held this year: Zimbabwe, Togo,
Congo (Brazzaville), and Ethiopia.
Ask them to place more reliance on the private
sector and they will create a Ministry of
Private Enterprise (Ghana). Ask them to privatize
inefficient state-owned enterprises and
they will sell them off at fire-sale prices to
their cronies (Uganda). Or ask them to
move a foot and they will demand foreign aid in
order to do so. In 2003, some 30,000
ghost names were discovered on the payroll of the
Ministry of Education, costing the
government $1.2 million a month in salaries
heisted by living workers. When Ghana
demanded foreign aid to purge the payroll of
these ghost names, Japan coughed up $5
million.
The reform process has stalled through vexatious
chicanery, willful deception, and
vaunted acrobatics. Only 16 out of the 54 African
countries are democratic, fewer than 8
are “economic success stories,” only 8 have a free and independent media.
No amount of debt relief and increased aid will
help Africa until Africa cleans up its
own house. But the leadership is not interested
in reform. Thus, without new leadership
and genuine reform, debt relief and increased aid
would compound Africa’s problems and
more African countries will implode. The
continent is stuck in a veritable conundrum.
What can Western donors do?
Smart aid would do one of two things. One, bypass
the vampire state and target the
people, who produce Africa’s real wealth. An
African economy consists of three sectors:
the traditional, informal, and the modern sector.
The people who produce Africa’s real
wealth – cash crops, diamonds, gold and other
minerals – live in the traditional and
informal sectors. Meaningful development and
poverty reduction cannot occur by ignoring
these two sectors. But in the 1960s and 1970s,
much Western development aid was channeled
into the modern sector or the urban area, the
abode of the parasitic elite minority.
Industrialization was the rage and the two other
sectors – especially agriculture – were
neglected. Huge foreign loans were contracted to
set up a dizzying array of state
enterprises, which became towering edifices of
gross inefficiency, waste and graft.
Economic crises emerged in the 1980s and billions
in foreign aid money were spent in an
attempt to reform the dysfunctional modern
sector. Between 1981 and 1994, for example,
the World Bank spent more than $25 billion in
Structural Adjustment loans to reform
Africa’s dilapidated statist economic system.
Only 6 out of the 29 “adjusting” African
countries were adjudged to be “economic success
stories” in 1994. Even then, the success
list was phantasmagoric. Ghana, declared a
“success story” in 1994, is now on HIPC
life-support system.
At some point, even the most recklessly
optimistic donor must come to terms with the law
of diminishing returns: That pouring in more
money to reform the modern sector is futile.
Greater returns can be achieved elsewhere – by
focusing on the traditional and informal
sectors.
Second, smart aid would empower the African
people (African civil society groups) to
monitor how the aid money is being spent and to
instigate reform from within. Empowerment
requires arming the African people with
information, the freedom and the institutional
means to unchain themselves from the vicious grip of poverty and oppression.
Africa already has its own Charter of Human and
Peoples’ Rights (the 1981 Banjul
Charter), which recognizes the right to liberty
and to the security of his person
(Article 6); to receive information, to express
and disseminate his opinions (Article 9);
to free association (Article 10); to assemble
freely with others (Article 11); and to
participate freely in the government of his
country, either directly or through freely
chosen representatives in accordance with the
provisions of the law (Article 13). Though
the Charter enjoins African states to recognize
these rights, few do so. When President
Thabo Mbeki called on June 3, President Bush
should have handed him a signed copy of this
Charter to be delivered to President Robert Mugabe of ‘Zimbabwe.
The institutional tools Africans need are an
independent central bank (to assure monetary
stability and stanch capital flight), an
independent judiciary (for the rule of law), a
free and independent media (to ensure free flow
of information), an independent Electoral
Commission, an efficient and professional civil
service, and a neutral and professional
armed and security forces.
Recent events in Ukraine (November), Ghana
(December), Zimbabwe (March), Lebanon (April),
and Togo (April) unerringly underscore the
critical importance of these institutions.
Without them, President Bush’s plan to spread
democracy may stall. Democracies are not
built in a vacuum but in a “political space” in
which the people can air their opinion,
petition their government without being fired on
by security forces and can choose who
should rule them in elections that are rigged by
electoral commissions packed with
government goons.
On May 13, thousands of Egyptian judges,
frustrated by government control over the
judiciary, agitated for full independence from
the executive in their oversight of the
electoral process. “The institutions are
presenting Mr. Mubarak with an unexpected
challenge from within, one that will be difficult
to dismiss. The fact is, major changes
in this country are going to come out of those
institutions, not from the streets," said
Abdel Monem Said, director of the Ahram Center for Strategic Studies in Cairo.
In the past 24 years, Egypt has received more
than $55 billion in U.S. aid in direct
government-to-government transfers. Smart aid
would assist civil society in instigating
institutional reform. Since this approach carries
some risks, the same objective can be
achieved by funneling aid through diaspora
Africans and their organizations, as was the
case with Soviet dissidents during the Cold War.
Africa’s long term growth prospects do not lie in
rock concerts and increased dependency
on Western aid but on the ability of the African
people or civil society groups to
instigate reform from within. Assistance to such
groups – both at home and abroad –
constitutes much smarter aid to Africa than all
the LIVE AID concerts Bob Geldof can
organize.