Africa’s Struggling Economy—Reasons that were Left UnsAID

The world is quick to blame the African continent’s slow economic growth on a variety of factors including inequality, nondemocratic regimes, and low rates of education amid other things. However, what the world is not quick to do is talk about the reasons that led to these factors.

Critics smugly say that Africa simply missed the bus to Industrial Revolution but as the Indian MP and former Under-Secretary General of the UN said about India (and what can be said about all post colonial countries): “we missed the bus to Industrial Revolution because Britain (and other colonial powers) ran us over with that same bus”.

Colonial powers followed the systematic strategy of substituting European manufactured products for locally made products. Colonized countries served the purpose of supplying their colonizers with cheap natural resources and labor and as a market for the finished products. This uneven trade is what stifled African economies and continues to have adverse impacts today.

Furthermore, the partition of African states—a direct consequence of colonization—lead to ethnic marginalization, which is a major cause of civil wars in Africa today. For example, the Masai have been split between Kenya (62%) and Tanzania (38%) and the Chewas between Mozambique (50%), Malawi (34%), and Zimbabwe (16%).

However, the international community’s solution to the problem only created more problems. The primary cause of the African continent’s economic problems is the influx of systematic aid starting from the 1960s. The West failed to do their due diligence and assumed that the aid model that seemed to work for post war European countries would also work for Africa. Furthermore, contrary to popular belief, if was not the “white man’s burden” that propelled the flow of aid; donating countries had ulterior motives. For the United States of America, aid became a way to secure allies against communist Russia during the Cold War while for the Great Britain and France, aid became a way to maintain a foothold in countries formerly colonized by them.

One of the main reasons for the failure of aid is the macro-micro paradox—something that Dambisa Moyo talks about in her book Dead Aid. The macro-micro paradox can be broadly defined at those economic activities that seem to be beneficial at the micro level but harmful at the macro level. An example of this would be donating essential commodities to the local people—beneficial at the micro level. However, supply of these commodities by donor countries prevents the sale of the same by local suppliers—harmful at the macro level.

Furthermore, a massive portion of the aid that was sent to the African continent was used to prop up dictators, which obviously hindered the emergence of democratic regimes. Leaders who receive external funding are obviously less likely to feel answerable to their people and more likely to participate in and encourage corruption.

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Mobutu Seko of DR Congo (left) left behind a legacy of corrupt kleptocracy; Meles Zenawi (right) of Ethiopia sustained his power largely due to foreign aid. Photos: Getty Images

While supporters of foreign aid may talk about the reduction of poverty across the continent, we cannot ignore the World Bank data that points to an increase in the number of people living below the poverty line. There is no denying that aid has achieved significant success as far as health is concerned; however, it has had devastating effects on Africa’s economy and governments. It is time that the West acknowledge the root cause of Africa’s existing problems instead of blaming the current administration and the alleged inability of the African people.

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