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Economy

Why It's Time To Abolish Aid To Africa

Aid in its current form is expensive and inefficient. And it isn't needed — Africa is now a dynamic and confident continent. Europe needs a change of perspective to understand that it needs Africa as much as Africa needs Europe.

photo of U.S. service members assigned to Combined Joint Task Force-Horn of Africa (CJTF-HOA) and a member of the U.S. Agency for International Development (USAID) build pallets of humanitarian aid to later be transported to Maputo, Mozambique, after Cyclone Idai devasted the area in March 2019.​

U.S. military and a member of the U.S. Agency for International Development (USAID) in Mozambique, after Cyclone Idai in March 2019.

Joe Chialo

-OpEd-

BERLIN — We have a responsibility to help those in need. That is undeniable. From the earliest days of foreign aid, it was given with the best of intentions — to alleviate poverty in Africa. But since then, it has grown into an entire industry. There are so many organizations, all seeking to do good, but inefficiency and misguided assumptions mean they often fail to achieve what they set out to do.

In my opinion, the aid industry has always shown a hint of disdain towards this emerging, vibrant continent. Yes, it is a complex continent – as they all are. It is marked by poverty and war, but that is not the full picture. That is why we need a new approach. Instead of aid, Germany and the rest of the West should focus on increasing economic cooperation with Africa – as an equal partner.


We have to do away with aid in its current form. It is expensive. It is inefficient. And it doesn’t achieve its aims. What we need is a change of perspective. Because Africa doesn’t need Europe. Europe needs Africa.

A dynamic and confident Africa

Africa is a continent of young people – the average age is between 20 and 25. Its population is growing faster than anywhere else in the world. The continent is already home to 1.4 billion people. By 2030, that figure could rise to 1.7 billion, meaning the population of Africa would be greater than that of China. And Africa is also experiencing a construction boom. Experts estimate that in the next ten years, there will be more new buildings in Africa than over the past hundred years in Europe.

Six of the ten fastest growing global economies are in Africa, and consumer spending is rising by almost 4%. In 2021, it was over $1.93 billion. Africa is riding a wave of dynamism, confidence and a desire for success.

Many industries, such as tech, medicine and agriculture, are seeing the emergence of a new elite, often educated at top institutions abroad, who are confident in their own abilities and potential. This generation has gained experience in Western industrialized countries and is now returning home and getting to work, rolling up their sleeves and founding companies. That is a game-changer.

Venture capital for Africa

Many people across Africa have long been breaking new ground, especially when it comes to embracing the opportunities of digitization. The number of start-ups on the continent is skyrocketing and large sums of venture capital are flowing into Africa. The question is: why is Germany proving so hesitant?

When half the population is under 20, it is clear that the next few years will see an increase in the number of people of working age who can contribute to the economy. This means Africa is the only continent in the world with a so-called “demographic dividend”.

These young people are motivated and keen to learn, and they are being drawn to the cities. While in the past many aimed to become farmers and grow their own food, now more and more young people are looking to fulfill their potential, driven by a desire to become part of the economy. Africa is a continent coming into its own. Its young population means there is a huge potential market for start-ups and modern technology, for medicine and biotech, for culture, fashion, music and films. A market for digital products, software, apps – for the future.

What many in Germany don’t realize is that Africa has already taken great strides forward in terms of innovation, leapfrogging stages of industrial development. It went straight from sending letters to using WhatsApp – without the transitional stages of faxes or email. The continent is also miles ahead when it comes to making payments via smartphones. Its population already has more mobile money accounts than traditional bank accounts, with half of all mobile users carrying out transfers via their phones.

Mobile payment platforms that allow fast financial transfers even in the most isolated regions, thus increasing spending power in rural areas, now count tens of millions of users. These digital financial services, known as Fintechs, are paving the way towards a prosperous future for the continent. By 2060 there will be more than a billion people in Africa who belong to the new middle class – the engine of every economy.

Photo of people and blue bags after Cyclone Idai struck in Chimanimani, Manicaland Province, Zimbabwe, March 22, 2019.\u200b

People from the Cyclone Idai-stricken area wait for donated food in Chimanimani, Zimbabwe, March 22, 2019.

Shaun Jusa/Xinhua/ZUMA Wire

Catapulting into a new era

To reach their goals, the young middle class are finding jobs in new, flexible companies that are constantly growing. There are already hundreds of companies in Africa with a turnover in the billions. Among them are courier services that have used artificial intelligence to revolutionize parcel deliveries both domestically and abroad, as well as payment platforms that allow small and medium-sized businesses to use e-commerce.

Alongside the Fintechs, Africa has seen the founding of start-ups that aim to produce more plentiful harvests, overcome supply chain difficulties and improve healthcare. Even more importantly, they are growing faster and often have better profit margins than their counterparts on the international stage. These dynamic, highly successful start-ups are head and shoulders above their German competitors – the lodestars of a rapidly growing market.

Many of them assume that free trade and open borders will catapult Africa into a new era. The scene is set for a wave of new start-ups, crying out for stronger links between Germany and Africa.

Europe can no longer afford to dismiss Africa, both politically and economically. We cannot expect Africa to wait patiently for us to realize this – many African countries are already seeking partners for themselves.


Why is China investing so much in Africa?

It’s an open secret that China has long recognized. For many years now, China has been Africa’s most significant investor and trade partner, pouring money into building infrastructure and developing industrial and commercial centers, and thereby winning a lot of friends on the continent.

Long before the Ukraine war, Russia was making efforts to build relationships with African states, especially in terms of military and security matters. That is especially clear in Mali, where Russia is taking over the role formerly played by Germany and France. The USA is also pursuing security-related and economic interests in Africa.

Africa has an abundance of options to choose from when it comes to international partners – from China and Russia to the USA and Turkey. These countries are all discovering the continent’s enormous potential. But although Europe is geographically much closer to Africa than China or Russia are, we Europeans seem reluctant to make use of this strategic advantage. Stronger relations with Africa are not only important when it comes to security and the economy, but also geopolitically, as the global center of gravity drifts inexorably towards Asia.

Unless we engage with Africa, Europe’s influence on the world stage will wane. It should go without saying that strong, close, stable relations with Africa also have a positive impact on security and migration. Because people who have promising careers, who found companies and create jobs for others, people who have prospects in their own country will not seek their future in Europe or elsewhere.

Photo of Julius Kamau, a vocal Kenyan human rights activist speaks while holding a poster that reads "poverty is manmade" on the Streets of Nairobi Central Business District.

Julius Kamau, a vocal human rights activist, protests against poverty and injustice on the streets of Nairobi.

James Wakibia/SOPA Images/ZUMA

A paradigm shift for Europe

People who can see potential in their own country won’t risk a dangerous journey and an uncertain future elsewhere. Therefore one of our aims must be investing in businesses to create better economic, social and cultural prospects, to the benefit of everyone involved. People in Africa are very open to working with Europe, and Germany in particular. I see that myself, whether it is in the form of innovative start-up ideas or – in my own industry – incredible music and culture.

That is why in 2018 I partnered with Universal Music Africa to set up the music label Afroforce 1, which aims to open up the German and European markets to African artists.

Through this venture, we are seeking to correct the image that many Europeans have of Africa, their impressions often shaped by outdated ideas. It is a passion project for me, trying to earn the dynamic African music scene the same recognition in Germany that it has long enjoyed elsewhere. If Europe manages to achieve this paradigm shift, if countries like Germany work with African partners to unleash the continent’s potential, then we are standing before a bright future in every respect. Africa is ready. Is Europe?


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