Africa remains an enigmatic paradox: Immense economic potential and yet faltering economic progress. Despite signs of recent progress, Africa’s development prospects remain bleak. Former U.N. Secretary-General, Kofi Annan, warned at the African Union Summit in Abuja in January, 2005, that Africa was failing to meet its Millennium Development Goals (MDGs). This was echoed by the United Nations’ African Development director, Gilbert Houngbo, in Congo-Brazzaville: “The [African] continent will fail to reach the goal of slashing poverty in half by 2015” (The Washington Times, April 26, 2007; p.A14).  In recent years, the international community is being mobilized to come to Africa’s aid.

In 2005, G-8 leaders, meeting in Gleneagles, Scotland, pledged to write off $40 billion of poor nations' debts and to double aid to Africa to $50 billion by 2010.  Two years later at the June 6-8 G-8 Summit in Heiligendamm in Germany, Chancellor Angela Merkel also placed debt relief and more aid to Africa again at the top of the agenda.  Elsewhere, a cacophonous galaxy of rock stars, anti-poverty activists, and African heads of state are demanding more: Total cancellation of Africa’s crippling $350 billion foreign debt and honoring the promises made in Gleneagles to double aid to Africa. In June, 2007, only 10 percent of those promises had been fulfilled. And China has declared 2007 to be “year for Africa.”

A cynic might note that all this concern for Africa’s plight appears to follow a ten-year attention deficit cycle. Every decade or so, rock concerts are held to whip up international compassion for Africa’s woes: Starvation, war, refugees, and disease. Mega-plans are drawn up. Acrimonious wrangling over financing modalities ensues. Years slip by and the campaign fizzles. 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 again took center-stage at a U.N. conference with clockwork precision. Expect another major initiative in 2015.

The “more-aid for Africa” campaign has become so steeped in emotionalism, overt racial sensitivity and guilt (over colonial iniquities) that pragmatism, rationality and efficiency have been sacrificed. So many Western governments, development agencies and individuals have tried to help a continent and its people they did not understand. More than $450 billion in foreign aid – the equivalent of six Marshall Aid Plans – has been pumped into Africa since 1960 with negligible results.  Helping Africa is noble but whole exercise has become a theater of the absurd with the blind leading the clueless.

It may sound uncaring but the truth is Africa really doesn’t need foreign aid. The resources it desperately needs can be found in Africa itself. Providing more aid to Africa is akin to pouring more water into a bucket that leaks horribly. Obviously, plugging these leakages ought to be the first order of business. Even then, the provision of more foreign aid will make little difference unless it is coupled with meaningful reform. So far, African leaders have shown little interest in reforming their abominable political and economic systems.

B. Africa’s Leaky Begging Bowl

Africa has the resources it needs to launch into self-sustaining growth and prosperity. Unfortunately, the problem has been a leadership that is programmed to look only outside Africa -- principally in the West - for such resources. The result has been hopeless dependency on foreign aid. When the New Economic and Partnership for African Development (NEPAD) was unveiled in 2000, it was trumpeted as "Africa's own initiative”, "Africa's Plan”, "African crafted”, and therefore "African owned.” NEPAD talked of "self-reliance" and argued forcefully that Africans must be "masters of their own destiny.” Yet, it sought $54 billion in investments from the West. Its fate was sealed when Senegalese President Abdoulaye Wade – one of the architects of NEPAD – dismissed it as “a waste of time of money which had failed to produce concrete results”(Mail and Guardian, June 29, 2007).

At a workshop organized for the Parliamentary Sub-Committee on Foreign Affairs at Ho, Ghana, Dr. Yaw Dzobe Gebe, a fellow at the Legon Center for International Affairs at the University of Ghana, stressed the need for the African Union to look within the continent for capital formation to build a viable continental union with less dependency on foreign aid. “With an accumulated foreign debt of nearly $350 billion and estimated capital requirement of more than $50 billion annually for capacity building, it is time Africa begins to look within for capital formation. Experience in the last 40 years or more of independence and association with Europe and America should alert African leaders of the fact that there are very limited benefits to be derived from benevolence of the development partners” (Daily Graphic, July 24, 2004; p.16).

An irate Namibian, Alexactus T. Kaure, weighed in:

“What I want to talk about is the uncritical belief -- especially by African leaders -- that somehow Africa's salvation and development will come from outside. This state of affairs has in turn led to the development of a number of industries in Europe and North America to reinforce and sustain that belief . . . You would always hear of a conference on Africa, for Africans but not by Africans, to discuss this or that issue, being held in places like Paris, London, Stockholm, Washington, Toronto and, of course, Brussels. And as you are reading this piece now, there is one going on in Brussels - termed EU-Africa Week. This conference will discuss a range of issues such as (good) governance, social rights, corruption, inequalities and vulnerable groups and the role of the media in development among others.
  Now most of these issues don't need a rocket scientist to actualize them and thus there is no need for these endless conferences. To make things even worse, the very same people who are supposed to implement most of the good practices in their countries and who are either unable or unwilling to; are the ones frequenting these conference halls. For them, of course, it's just another short holiday and opportunity for shopping and a bit of extra cash through S&T (per diem)” (The Namibian, Nov 24, 2006; web posted-- http://www.namibian.com.na)

Africa's investment process may be compared to a "leaky bucket”. The level of the water therein --  GNP per capita --  is determined by inflows of foreign aid, investment, and export earnings relative to outflows or leakages of imports (food, luxury consumer items), corruption, and civil wars. In 2005, Africa’s balance of payment situation showed a payment deficit of $21.7 billion. This had to be financed by new borrowing, which would increase Africa’s foreign debt, or by the use of reserve, which were nonexistent for most African countries. This number, however, does not tell the full story. Hidden from view was a much grimmer story- the other more serious leakages.

According to one UN estimate, “$200 billion or 90 percent of the sub-Saharan part of the continent's gross domestic product (much of it illicitly earned), was shipped to foreign banks in 1991 alone" (The New York Times (Feb 4, 1996; p.A4). Capital flight out of Africa is at least $20 billion annually. Part of the capital flight out of Africa represents wealth created legitimately by business owners who have little faith in keeping it in Africa. The rest represents loot stolen by corrupt African leaders and politicians. Former Nigerian President Olusegun Obasanjo, charged that corrupt African leaders have stolen at least $140 billion (£95 billion) from their people in the decades since independence (London Independent, June 14, 2002. Web posted at www. independent.co.uk).

Foreign aid has not been spared, either. Said The Economist (Jan 17, 2004): “For every dollar that foolish northerners lent Africa between 1970 and 1996, 80 cents flowed out as capital flight in the same year, typically into Swiss bank accounts or to buy mansions on the Cote d’Azur” (Survey; p.12). At the Commonwealth Summit in Abuja, Nigeria on December 3, 2003, former British secretary of state for international development, Rt. Hon Lynda Chalker, revealed that 40 per cent of wealth created in Africa is invested outside the continent. Chalker said African economies would have fared better if the wealth created on the continent were retained within. "If you can get your kith and kin to bring the funds back and have it invested in infrastructure, the economies of African countries would be much better than what there are today, she said (This Day [Lagos], Dec 4, 2003).

On October 13, 2003, Laolu Akande, a veteran Nigerian freelance journalist, wrote that:

“Nigeria's foreign debt profile is now in the region of $25-$30 billion, but the president of the Institute of Chartered Accountants of Nigeria, ICAN, Chief Jaiye K. Randle, himself an eminent accountant and social commentator has now revealed that individual  Nigerians are currently lodging far more than Nigeria owes in foreign banks. With an estimate he put at $170 billion it becomes immediately clear why the quest for debt forgiveness would remain a far fetched dream” (http://nigeriaworld.com/columnist/laoluakande/articles.html)

In August 2004, an African Union report claimed that Africa loses an estimated $148 billion annually to corrupt practices, a figure which represents 25 percent of the continent's Gross Domestic Product (GDP).  “Mr. Babatunde Olugboji, Chairman, Independent Advocacy Project, made this revelation in Lagos while addressing the press on the survey scheduled to be embarked upon by the body to determine the level of corruption in the country even though Transparency International has rated Nigeria as the second most corrupt nation in the world” (Vanguard, Lagos, Aug 6, 2004. Web posted at www.allafrica.com).  The pillage in Nigeria has been massive.

Mallam Nuhu Ribadu, the chairman of the Economic and Financial Crimes Commission, set up three years ago, said that £220 billion ($412 billion) was "squandered" between independence from Britain in 1960 and the return of civilian rule in 1999. "We cannot be accurate down to the last figure but that is our projection," Osita Nwajah, a commission spokesman (Telegraph, June 25, 2005). The stolen fortune tallies almost exactly with the £220 billion of western aid given to Africa between 1960 and 1997. That amounted to six times the American help given to post-war Europe under the Marshall Plan.

To be fair, former President Obasanjo, upon assuming office, vowed to recover the loot of former and late head of state, General Sani Abacha. He established the Corruption Practices and Other Related Offences Commission. Much public fanfare was made of the sum of about $709 million and another ₤144 million recovered from the Abachas and his henchmen. But, alas, this recovered loot itself was quickly re-looted. The Senate Public Accounts Committee found only $6.8 million and ₤2.8 million of the recovered booty in the Central Bank of Nigeria (CBN) (The Post Express (July 10, 2000). Uti Akpan, a textiles trader in Lagos was not impressed: "What baffles me is that even the money recovered from Abacha has been stolen. If you recover money from a thief and you go back and steal the money, it means you are worse than the thief" (The New York Times, Aug 30, 2000; p.A10).

Back in the late 1980s, Sammy Kum Buo, director of the U.N. Center for Peace and Disarmament, lamented that "Africa spends about $12 billion a year on the purchase of arms and the maintenance of the armed forces, an amount which is equal to what Africa was requesting in financial aid over the next 5 years" (West Africa, May 11, 1987; p. 912). Since then, this amount has increased for all of Africa: “Excluding South Africa, spending on arms in sub-Saharan Africa totaled nearly $11 billion in 1998, if military assistance and funding of opposition groups and mercenaries are taken into account. This was an annual increase of about 14 percent at a time when the regions economic growth rose by less than 1 percent in real terms” (The Washington Times, Nov 8, 1999; p.A16). Total expenditures on arms and militaries exceed $15 billion annually.

Civil wars continue to wreak devastation on African economies. They cost Africa at least $15 billion annually in lost output, wreckage of infrastructure, and refugee crises. The crisis in Zimbabwe, for example, has cost Africa dearly. Foreign investors have fled the region and the South African rand has lost 25 percent of its value since 2000. More than 4 million Zimbabwean refugees have fled to settle in South Africa and the neighboring countries, and the South African government is preparing a military base at Messina to house as many as 70,000 refugees. Since 2000 almost 60,000 physicians and other professionals have left Zimbabwe (The Washington Post, March 3, 2002; p. A20). According to The Observer [London] (Sept 30, 2001), Zimbabwe's economic collapse had caused $37 billion worth of damage to South Africa and other neighboring countries. South Africa has been worst affected, while Botswana, Malawi, Mozambique, and Zambia have also suffered severely.

Finally, the neglect of peasant agriculture, the uprooting of farmers by civil wars, devastated infrastructure, and misguided agricultural policies have made it difficult for Africa to feed itself. Therefore, Africa must resort to food imports, spending $15 billion in 1998. By 2000, food imports had reached $18.7 billion, slightly more than donor assistance of $18.6 billion to Africa in 2000 (Africa Recovery, Jan 2004; p.16).

Here is a breakdown of how Africa loses money:

Corruption                                $148 billion
Capital Flight                                 $20 billion
Expenditures on Arms and Military $15 billion
Civil War Damage                        $15 billion
Food Imports                             $18 billion
Total Other Leakages                  $216 billion

From the table, this massive leakage may be compared to the $64 billion NEPAD sought in investments from the West. It is apparent that if Africa could feed itself, if the senseless wars raging on the continent would cease, if the elites would invest their wealth --  legitimate or ill-gotten --  in Africa, and if expenditures on arms and the military are reduced, Africa could find within itself the resources it needs for investment. In fact, more resources can be found if corrupt leaders would disgorge the loot they have stashed abroad. This constitutes the new way of looking at the investment issue: Plugging the leakages and repatriating booty hoarded abroad.

C. Monumental Leadership Failure

The entire foreign aid business has become a massive fraud, a huge scandal, and a charade.  The donors are being duped and in many instances, they know they are being taken. Patricia Adams of Probe International, a Toronto-based environmental group, charged that, “in most cases, Western governments knew that substantial portions of their loans, up to 30 percent, says the World Bank, went directly into the pockets of corrupt officials for their personal use” (Financial Post, May 10, 1999).  Donors pretend they are helping Africa to soothe their conscience and African leaders pretend they are helping the people.

Monumental leadership failure remains the primary obstacle to Africa’s development. After independence in the 1960s, the leadership, with few exceptions, established defective economic and political systems that set the stage for the ruination of post colonial Africa. The economic system of statism or dirigisme with its plethora of state controls created chronic commodity shortages, black markets, spawned a culture of bribery and corruption, virtually destroying Africa’s productive base. The political system of one-party states and military dictatorships degenerated into tyranny. These systems, with enormous economic and political power concentrated in the state, evolved into “vampire states.” “Government,” as an institution, ceased to exist, hijacked instead by a phalanx of unrepentant bandits and thugs, who use the state machinery to enrich themselves, their cronies and tribes. All others are excluded (the politics of exclusion). The richest persons in Africa are heads of state and their ministers. Quite often, the chief bandit is the head of state himself.

Eventually the “vampire state” metastasizes into what Africans call a “coconut republic” and implodes when politically-excluded groups rise up in rebellion: Somalia (1993), Rwanda (1994), Burundi (1995), Zaire (1996), Sierra Leone (1998), Liberia (1999), Ivory Coast (2000), and Togo (2005).  Only reform – intellectual, economic, political and institutional – will save Africa but the leadership is not interested.

In 2005, Africa’s case for more aid and debt relief was not helped by President Olusegun Obasanjo of Nigeria, arguably the most mismanaged economy in Africa. As he was pleading for more aid at the World Economic Forum in Davos, Switzerland, in February, 2005 four of his state governors were being probed by London police for money laundering. The most galling was the case of Plateau State Governor, Chief Joshua Dariye, accused of diverting N1.1 billion (over $90 million) into his private bank accounts.

Dragged to the Federal High Court in Kaduna by Economic and Financial Crimes Commission (EFCC), Justice Abdullahi Liman ruled on December 16, 2004 that although Dariye was a principal actor in the case, Section 308 of the Nigerian Constitution protected sitting governors from criminal prosecution. Imagine. And would the police apprehend him if he had no such “constitutional immunity”? In February, Nigeria's police chief himself, Inspector General Tafa Balogun, was forced into early retirement after investigators probing money-laundering allegations found $52 million hidden in a network of 15 bank accounts after being on the job for only two years. He was eventually prosecuted and sentenced to a mere six-month jail term – a slap on the wrist.

The Governor of oil-rich Nigerian state (Bayelsa State), Chief Diepreye Alamieseigha, was arrested at London Heathrow Airport on Sept 15, for money laundering in Britain. He appeared in a UK court on Sept 18 and charged with laundering £1.8m ($3.2m) found in cash and in bank accounts. Seven London bank account have been traced to him.

Nigeria’s Economic and Financial Crimes Commission (EFCC), has overwhelming evidence on most of the alleged corrupt government officials -- especially state governors -- even as the Commission’s chairman, Mallam Nuhu Ribadu, said the recent case involving the governor of Bayelsa State, Diepriye Alamieyeseigha, was just a tip of the iceberg. In fact, an allegation of corruption has been leveled against President Olusegun Obasanjo himself by the governor of Abia State, Orji Uzor Kalu.

Many Nigerians scoffed at Obasanjo's anti-corruption campaign as an elaborate form of public relations to win concessions from lenders and burnish the president's reputation as a world leader. Critics noted that he waited so long before cracking down on corruption and even then, no major figures were brought to justice, and few went o jail. One such figure, General Ibrahim Babangida, an ex-military dictator, thumbs his nose at his people by even refusing to testify before the anti-corruption commission. When senior government officials are caught, punishment often amounts to a mere sacking.

D. Acrobatics on Reform

Efforts to stem corruption began making headlines in August 2004 when Nasir Ahmad el-Rufa'i, who had just been named to a ministerial post overseeing the capital region, announced that two senators had asked him for bribes to facilitate his confirmation (The Washington Post, May 1, 2005; p.A18). El-Rufa'i estimated that at least three out of every four lawmakers are corrupt, as are more than half of the nation's governors and many of its civil servants. "If a few more ministers go to jail, if a few more members of the National Assembly go to jail, believe me, people will line up and do the right thing" el-Rufa'i said (The Washington Post, May 1, 2005; p.A18).

Until then, outright debt relief and massive inflow of aid without any conditionalities, safeguards or monitoring mechanisms and reform would be absurd. Budgets have careened out of control in Africa. Dysfunctional state bureaucracies, riddled with inefficiency and graft, have swollen, packed with political supporters. Corruption is rampant. Without reform, new debts will simply replace canceled old debts. But, with few exceptions, the leadership is just not interested in reform, period. 

Ask these leaders to develop their countries and they will develop their pockets. Ask them to seek foreign investment and they will seek a foreign country to invest their booty. Ask them  to cut bloated state bureaucracies or government spending and they will set up a “Ministry of Less Government Spending.” Ask them to establish better systems of governance and they will set up a “Ministry of Good Governance” (Tanzania). Ask them to curb corruption and they will set up an “Anti-Corruption Commission” with no teeth and then sack the Commissioner if he gets too close to the fat cats (Kenya). Ask them to establish democracy and they will empanel a coterie of fawning sycophants to write the electoral rules, hold fraudulent elections with opposition leaders either disqualified or in jail, and return themselves to power (Ivory Coast, Rwanda). Witness Nigeria’s April 2007 elections. Ask them to reduce state hegemony in the economy and 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. In 1992, in accordance with World Bank loan conditionalities, the Government of Uganda began a privatization effort to sell-off 142 of its state-owned enterprises. However, in 1998, the process was halted twice by Uganda’s own parliament because, according to the chair of a parliamentary select committee, Tom Omongole, it had been “derailed by corruption,” implicating three senior ministers who had "political responsibility" (The East African, June 14, 1999). The sale of these 142 enterprises was initially projected to generate 900 billion Ugandan shillings or $500 million. However, by the autumn of 1999 the revenue balance was only 3.7 billion Ushs.

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. Without genuine political reform, more African countries will implode. The continent is stuck in a veritable conundrum.

E. Better Ways of Helping Africa

Smart aid is that which empowers African civil society and community-based groups to monitor aid money and to instigate reform from within. Empowerment requires arming them with information, the freedom and the institutional means to unchain themselves from the vicious grip of repression, corruption and poverty. The agents of reform or change are found outside government, not in “reformist partnerships” with crooked governments.

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); and to assemble freely with others (Article 11). Though the Charter enjoins African governments to recognize these rights, few do.

The institutional tools the African people need are: A free and independent media (to ensure free flow of information); an independent judiciary (for the rule of law); an independent Electoral Commission; an independent central bank (to assure monetary stability and stanch capital flight); an efficient and professional civil service; and a neutral and professional armed and security forces. Events in Ukraine, Ghana, Zimbabwe, Lebanon, and Togo in 2004 and 2005 unerringly underscore the critical importance of these institutions. Elections alone do not make a country democratic; nor are democracies nurtured in a vacuum. A “political space” is needed, 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 not rigged by electoral commissions packed with government cronies. This “space” does not exist in much of Africa.

The above-named institutions will help create this political space and their establishment would solve the majority of Africa’s woes. For example, the two effective anti-dotes against corruption are an independent media and an independent judiciary. But only 8 African countries have a free media in 2003, according Freedom House. These institutions cannot be established by the leaders or the ruling elites (conflict of interest); they must be established by civil society. Each professional body has a “code of ethics,” which should be re-written by the members themselves to eschew politics and uphold professionalism. Start with the “military code,” and then the “bar code,” the “civil service code” and so on.  The military code debars soldiers from intervening in politics and can be court-marshaled for doing so. The bar code would decertify corrupt judges who do not uphold the rule of law and the civil service code would sack public servants who do not uphold professionalism. Assistance to the Bar Association or Civil Service Association to enforce their respective codes will be useful.

On May 13,  2006, thousands of Egyptian judges, frustrated by government control over the judiciary, threatened to thwart the country's presidential elections in September by refusing to oversee polling unless they are granted full independence from the executive in their oversight of the 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, a government-backed research and policy organization (The Washington Post, June 6, 2008; p.A20).

Government-backed newspapers, long the official mouthpiece, have lately published articles deemed unfavorable to the government, says Hussein Amin, professor of journalism and mass communications at the American University in Cairo. The seeming mutiny by the judges presents an altogether different and in many ways more serious challenge than does the opposition movement.

This is where smart aid would put its money. It is dicey, however, as direct assistance to Egyptian judges may constitute an “interference in the internal affairs of a sovereign nation.” Funneling aid through Western-based NGOs is an option -- about 36 percent of Canadian aid is so channeled – but they can be expelled if they incurred the displeasure of an African government. They can be accused of “spying” or engaging in subversive activities  -- charges leveled by Russia against Freedom House, a human rights group, in Ukraine and Kyrgystan. But, alas, a third and  fourth alternatives exist: The Bar Association and Africans in the diaspora.

Many are professionals, human rights activists, and reformers in exile. They understand conditions in their home countries better than Western-based NGOs. Funneling covert aid through their organizations may yield great results. After all, such was the case with Soviet dissidents during the Cold War.

The distinction between African governments and the people is important. Naïve EU officials think handing aid money to governments in Africa necessarily helps the people – a model they did not follow when dealing with the former Soviet Union. There the West did not hand over money to communist regimes, nor cajoled them to reform. Instead, assistance to such groups as Solidarity in Poland and the establishment of Radio Free Europe accelerated the demise of the former Soviet Union. Why treat Africa differently? And how about Radio Free Africa?

The entire Western foreign aid program needs to be critically evaluated not by Western or African government officials but by people outside government before more money is wasted.
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The writer, (George Ayittey)a native of Ghana, was a former Distinguished Economist at American University and President of the Free Africa Foundation. His new book is Africa Unchained (2005, Palgrave/MacMillan).