Foreign governments and international organizations have been in the fore front ‘championing change’ with financial aid, grants and donations to help third world countries develop. Even as grants are non-refundable, some are intended to finance specific policies. Most of these help comes to promote a country’s development in different sectors including infrastructure development, food production, better housing plans, education and economic growth among others.
According to a report by One International, African countries received a total of $58.4 billion in 2021, equivalent of 33.6% of aid. In 2022 alone, USAID has provided more than $6 billion in humanitarian assistance to the people of Africa. Despite external assistance since the times of independence, third world states are still under-developed, mainly because of their over reliance on aid. Of course Kenya has achieved some milestones as a country, but still majorly struggling. Forget the issues of corruption and greed among the leaders for a minute and focus on the governing structures.
The food sector for example; our policies are geared towards exportation. We are feeding the European and the US market as a priority whilst internally dealing with food insecurity. Food is locally expensive, even as the cost of living is rising. A few of us are growing the food but majority of the rest need it. People are hungry, yet we are net exporters of vegetables, tea, coffee and other food items.
Considering natural resources; Kenya is vastly covered with rich resources and a hot bed of mineral reserves. How have these resources benefited the nation? Think of the Democratic Republic of Congo, Angola, Nigeria, Equatorial Guinea and Zimbabwe, the story is not any different. The blessings of natural resources have turned to be a curse in third world countries. How a continent’s natural resource riches has had so little effect on its people’s quality of life over so many years, is one of the greatest mysteries.
Kenyan policies are mostly foreign-derived. British statutes still apply in most of these legislations. We are governed by set of rules that are not native, how then can they benefit us? Majority of large scale mining in the country, is conducted by foreign companies. They pay some statutory fees for permits and licenses and take away the resources. We have not come to a place of realizing the value of the resources seating on and under our lands, decades and decades have gone by, the results are still the same.
Note that investment from international financiers also comes in the form of loans. Some loans are often conditional on certain outcomes, such as internal policy reforms. With this, third world countries have accumulated high levels of unpayable debts in the process. Some countries will borrow more loans, to ease out older debts. If the financial aid was to help nations develop, why are they still dwindling? With this, scholars Walter Rodney and Andre Gunder Frank, are spot on in saying that development in the North may actually be sustained by underdevelopment in the South.
“All this goes to show that the IMF cannot be the answer to the poorer nations’ economic challenges. Alongside its sister institutions, the IMF has provided ‘assistance’ to poor countries ever since its establishment in 1944, and yet many of these countries have remained poor in spite of this. The reason is that IMF assistance has never confronted the structural factors that have continued to consign many countries to the ranks of the poor. As diagnosed many years ago by scholars such as Walter Rodney and Andre Gunder Frank, development in the North is sustained by underdevelopment in the South.48 Seen this way, the IMF, as the archetypical Northern institution, is duty bound to maintain and entrench this status quo. How else does one explain the IMF’s solution to Zambia’s financial woes, for example? The IMF prescription ignores the fact that the country’s foreign-owned copper mines continue to generate billions for their overseas shareholders yet pay so little in taxes in a country where the estimated annual income taxes for one mining project alone could have amounted to nearly half the 2020 national water supply and sanitary budget.49
A new kind of institutional apparatus that fosters cooperation, rather than competition, is required for Africa’s economic liberation and that of the Third World more generally. This would mean, for example, establishing currency arrangements that bypass the US dollar, which is a strong lever of IMF conditionality and a weapon of US foreign policy.”
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It may be time for Kenya and other third world countries, to fashion development in their own lens. African governments need to scale up policies that spur development and create an enabling environment to build prosperity through priorities such as economic engagement and regional integration. They can also stimulate their economies by tapping into their young population to create plans that will allow for competitive business growth and job creation. Adapting incentives that improve the quality of education will be key in producing a skilled workforce.
Foreign aid is good, but relying on it is where countries should draw the line. African countries have had the potential to grow for centuries. We have good weather conditions for agriculture, plenty of precious stones and mineral reserves, our economies are not too old hence present a great opportunity to expand and so on. If our governments can change their leadership styles and focus on economic growth, the stories will be much different.