How to Fix Foreign Aid in Africa

It has been proven, by experience, that simply giving developing countries more aid is not the answer to help them become more developed. The World Bank Presidents called for doubling aid in 1973, 1990, and 2001. Aid to Africa did indeed rise but African growth stayed at zero percent per capita. Easterly explains the 1960s led to what seems to be foreign aid’s most productive time in Africa, which happened to be when it invested in projects designed to achieve specific tasks like improving schooling, infrastructure and health. In other words, aid needs to be designated to specific projects, instead of a vague statement such as “to help Africa”. The Big push model says that Africa is poor due to it being in a “poverty trap.” To get released from the poverty trap, they need a “big push” from a large aid-financed increase in investment.

Debt forgiveness has already been tried, but it did not help Africa grow or even provide sufficient relief from debt. Aid should be given in increments so the country in need receives a portion when significant progress is shown and it is proving to be sustained before the next portion is received. Debt should be forgiven if the developing country holds true to using the aid wisely and progress is continuous.

Many recent studies have discovered that there is a negative correlation between economic growth and natural resources in developing countries (Djankov, Montalvo, and Reynal-Querol, n.d., p 6). The poor economic performance of countries who are rich in natural resources is typically called “the curse of natural resources” (Djankov et al., n.d., p 6). However, the source of the curse might not be limited to natural resources. In terms of government expenditure, the sum of international financial aid given by the United States to Africa alone is 12 billion USD (Bonasso, n.d.).