Foreign governments and international organizations have been in the forefront championing change with financial aid, grants and donations to help developing countries achieve sustainable development and alleviate poverty. 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, education, 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 time most African states became independent, developing countries are still underdeveloped, mainly because of their over-reliance on aid. Kenya has achieved significant milestones as a country, but still continues to struggle on many fronts. We can forget the issues of corruption and pillage among the leaders for a minute and focus on the governing systems.
In 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 the majority of the rest need it. People are hungry, yet we are exporters of vegetables, tea, coffee and other food items.
As pertains to natural resources, Kenya is vastly covered with rich resources and is a hotbed of mineral reserves. How have these resources benefited the country? The story is not very different in countries like the Democratic Republic of Congo, Angola, Nigeria, Equatorial Guinea and Zimbabwe. So in essence, the blessing of natural resources has turned out to be a curse in developing countries. How a continent’s natural resource wealth has had such a limited impact 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? of large-scale mining in the country is conducted by foreign companies. Granted, they pay statutory fees for permits and licenses but they cart away the resources, which have much greater value. As a country, we have not come to a realization of the value of the resources beneath 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 with some loans often offered on certain conditions, such as internal policy reforms. With this, developing 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? Scholars Walter Rodney and Andre Gunder Frank, are spot on in saying that development in the Global North may actually be sustained by underdevelopment in the Global 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. These kinds of long overdue proposals are already underway in parts of the world, such as in Latin America, where Brazil’s President Luíz Inácio Lula da Silva (known as Lula) and Argentina’s President Alberto Fernández have proposed the establishment of a regional currency, the sur, that could be used to settle cross-border claims and store reserves.50
It may be time for Kenya and other developing countries, to fashion development in their own lens. Policy solutions are particularly influential and hold the potential to rapidly transform the sector. African governments need to pretest policies (as most of them are borrowed) before actually adopting them. They should scale up policy actions that spur development and create an enabling environment to build prosperity through priorities such as fair trade 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.