1 / 11

Why Foreign Aid is Hurting Africa

Why Foreign Aid is Hurting Africa. Samantha Brian Adam Alan. Kibera, Kenya. 1 million people crammed together in 1 square mile Live in filth and absolute poverty So………. Where is the money?. United Nations agency a short distance from Kibera?

gavin-chan
Download Presentation

Why Foreign Aid is Hurting Africa

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Why Foreign Aid is Hurting Africa Samantha Brian Adam Alan

  2. Kibera, Kenya • 1 million people crammed together in 1 square mile • Live in filth and absolute poverty • So………

  3. Where is the money? • United Nations agency a short distance from Kibera? • Africa receives $50 billion in aid per year • Past 60 years---over $1 trillion in aid • So why isn’t Kibera and Africa prospering?

  4. Where is the money? • Debt repayments about $20 billion per year • Where do they get this $20 billion from? • Take it out of expense accounts for education and healthcare • Some debt is cancelled, but they only received more aid

  5. Result • IMF cautioned donors to be careful in the amount of aid they give African countries • Report “Aid Will not Lift Growth in Africa”

  6. Where is the money? • So where is all the aid going to? • Corruption • Supporting bureaucratic governments and organizations • African Union estimates corruption costs Africa $150 billion per year

  7. Zaire: • Creditors can’t get money back • Yet, IMF gave Zaire a massive loan • Past President stole over $5 billion • Malawi: • President embezzled $12 million • Zambia: • President stole from health, education, and infrastructure and pocketed it himself.

  8. Bad for Economy • “Free” money means inefficiency and keeps government in power • Taxes? • No way to raising finances yourself • FDI? A lot of red tape and lag time • Puts African citizens out of jobs • Example Mosquito nets

  9. Bad for Economy • Food aid vs. African farmers • What they should do? • Aid money African farmer  Feed people • Money into a country  increases home prices  good expensive to export • What they should do? • Issue bonds

  10. A first…. • Ghana • Pro-market movement • Increased use of mobile phone • More opportunities for citizens

  11. Conclusion • Issue bonds to raise cash, rather then depend on free money • Raise capital in other markets • Creative attractive “FDI environment” • Increase trade

More Related