No More Marshall Plans, Africa Needs A New Development Model
Public development assistance has not achieved its objective of reducing entrenched poverty in Africa. Its scarcity requires the use of new forms of co-financing and investment.
PARIS — Why didn't the $1 trillion of aid destined for public development over the past 50 years improve the quality of life for most Africans? This was the question at the heart of Dambisa Moyo's book, published eight years ago, Dead Aid.
The Zambian economist left Oxford and Harvard behind to advocate for a gradual abandonment of the development aid model that accounted for nearly 15% of African GDP. According to Moyo, and a growing number of other economists, this model has had many negative side-effects: a distortion of competition, corruption of the ruling classes, a cumbersome bureaucracy and even the aggravation of ethnic tensions brought on in the divvying up of the "booty."
The aid, distributed in the form of either grants or subsidized loans, has also led to a significant increase in the debts owed by the countries concerned. The conditions attached to the aid, such as greater fiscal discipline and better governance are, in many experts' opinions, a form of paternalism lording over poorer countries. The emergency fund created by U.S. President George W. Bush for the fight against AIDS in Africa was accompanied by programs for the promotion of sexual abstinence and marital fidelity.
Even though it was largely modeled on the Marshall Plan, the massive U.S.-led effort to help Europe recover from World War II, the aid strategy for Africa has been as much of a failure as the Marshall Plan was a success. The continent has not managed to emerge from poverty or build the infrastructure necessary for its development over the past several decades. Meanwhile Asia, in particular China and India, has seen a rapid decline in its rate of "extreme poverty," while that measurement still touches more than 35% of the population in sub-Saharan Africa today, according to the World Bank.
Increasingly, aid donors — both bilateral and multilateral — have changed their very conception of development aid: moving away from direct assistance to national governments, towards forms of co-financing and support for private investment. For we must not deceive ourselves: The change in the White House will have real effects. "You won't be hearing President Donald Trump talking about a Marshall plan to lift countries out of poverty," said Rosa Whitaker, who was the U.S. trade representative for Africa under presidents Bill Clinton and George W. Bush. Indeed, the 2018 U.S. budget foresees major cuts to international development.
Cameroon's Albert Zeufack, the World Bank's chief economist for Africa, told the magazine Jeune Afrique that "the way we conceive of finance has evolved." The institution has earmarked $57 billion over the next three years, whereas it would require $48 billion each year for Africa's infrastructure alone. The French Development Agency recently launched a 600-million-euro fund to finance infrastructure projects in Africa.
The continent's economic growth has slowed significantly to 1.4% in 2016. And even the IMF's forecast for a rebound to a 2.5% would be largely insufficient to cope with population growth, expected to rise from 1.2 billion to 4.4 billion Africans by the end of this century.
Still, the debate on aid fundamentally shifted as China and India began to invest heavily in Africa. For Whitaker, who set up her own firm, TWG, in 2003 to mobilize investment from multinationals to Africa without relying on public aid, the mentality must change. "We must replace paternalism with the partnership approach."