In the Financial Times, Mo Ibrahim argues that while investment and good governance will ultimately solve Africa’s problems, “effective aid has an important role to play in the quest for sustainable economic growth and poverty reduction.” Ibrahim offers this assessment in light of the recent debate about aid in the wake of Dambisa Moyo’s book Dead Aid. Ibrahim argues for a “holistic approach to development in Africa that is centred on good governance.”

Excerpts below, full piece here

The critical argument should not be about aid or no aid – no one can question the necessity of pure humanitarian aid as long as it satisfies basic good governance criteria. The argument should be about where to focus aid to achieve the best returns for donor taxpayers and aid recipients. I propose two areas to focus aid: the hardware of Africa, infrastructure and regional integration; and human software, in the form of education and health.

The reality is that most African countries are sub-scale and fundamentally unable to compete in a global market. If economies the size of the UK, Germany and France find regional integration necessary to ensure growth, then 53 un-integrated African states have a competitive disadvantage. This fragmentation is evident in Africa’s transportation infrastructure, geared towards trade outside rather than within the continent. Africa needs to integrate its economies and open their borders to each other. Development aid can help these efforts and facilitate intra-African trade. This capital investment cannot succeed without investment in education and health.

Finally, while debate on development aid is of great importance, more of this energy should be spent on climate justice. Africans have emitted the least carbon per capita but will have to face the greatest consequences of its emission. A worthier use of the time of these great African and other economists is to devise a solution that allows the continent to meet the adaptation and mitigation costs of climate change.

-Chris Scott

Economist Jeff Sachs has issued a substantive response on the Huffington Post to Dambisa Moyo’s recent attempt to undermine his concerns with the lack of facts and policy rigor in Moyo’s book Dead Aid. For those following this debate, it’s worth reading the exchange.

Some excerpts are below, and you can read his full article here. The original critique Jeff wrote is here.

-Josh Lozman

Ms. Dambisa Moyo’s recent Huffington Post article exposes the confusions that underlie her slashing attacks on aid. Most importantly, she seems to believe that sub-Saharan Africa was economically prosperous and then was pushed into poverty by aid. She makes the following statement: “No surprise, then, that Africa is on the whole worse off today than it was 40 years ago. For example in the 1970’s less than 10 percent of Africa’s population lived in dire poverty — today over 70 percent of sub-Saharan Africa lives on less than US$2 a day.”

Let’s parse that statement for a moment. World Bank researchers Shaohua Chen and Martin Ravallion prepare the benchmark under-$2-a-day historical headcount data going back to 1981. According to their figures, headcount poverty under $2 a day was 74 percent of the population in sub-Saharan Africa in 1981 and 73 percent in 2005. Other prominent estimates that go back to 1950 or 1970 also contradict Moyo’s statement, by showing high and persistent poverty. All of the macroeconomic time series by Maddison, Summers and Heston, and others tell the same story: the majority of Africa’s population started out impoverished at the time of national independence in the 1960s and 1970s, and a majority remains impoverished till today….

Moyo now campaigns against the kinds of aid that can keep millions of African children from dying or being maimed for a lifetime through the consequences of serious episodes of disease. She advocates cutting the aid that has allowed more than 2 million Africans access to life-saving AIDS treatment, since governments are involved. Almost unimaginably, she opposes the distribution of anti-malaria bed nets for Africa’s hundreds of millions of young people on the alleged grounds that it has put bed net producers in Africa out of business. In her own words:

“Finally, with respect to Mr. Sachs’ remark that I would see nothing wrong with denying US$10 in aid to an African child for an anti-malarial bed net — even labeling me as cruel; I say, if working towards a sustainable solution where Africans can make their own anti-malaria bed-nets (thereby creating jobs for Africans and a real chance for continents economic prospects) rather than encouraging all and sundry to dump malaria nets across the continent (which incidentally, put Africans out of business), then I am guilty as charged. Don’t forget that the over 60 percent of Africans that are under the age of 24 need jobs not sympathy.”

The confusion underlying this remark is staggering. There are hundreds of millions of Africans at risk of a killer disease, around two hundred million cases of the disease, and around 1 million preventable deaths per year, yet Moyo is opposed to urgent help if nets are not produced in Africa. She seems both unmoved by the massive suffering and unaware that Africa has gone from producing exactly zero long-lasting insecticidal nets (LLINs) a few years ago to several million per year now, with thousands of jobs in the local industry, as a result of the demand for nets created by aid for malaria control.

She takes no note of the fact that global aid for malaria control is also training tens of thousands and soon hundred of thousands of rural Africans as community health workers; and seems to be unaware that unchecked malaria has long devastated Africa’s economy while malaria control is finally emptying the hospitals, putting mothers and fathers back to work and children back to school, and contributing to the boost in Africa’s productivity and economic growth of recent years. She says that if her position against aid for LLINs is deemed to be cruel, then yes, she is “guilty as charged.”

Moyo has proposed cutting off bilateral and multilateral aid. African leaders – like President Ellen Johnson Sirleaf of Liberia, Dr. Awa Coll-Seck of Roll Back Malaria, and Ministers Charity Ngilu and Beth Mugo of Kenya – have fought for Africa’s poor and have used aid to save lives and help economies to prosper. These leaders disagree with Moyo’s drastic proposal to cut off aid. They recommend more aid that is fully accountable and properly targeted to meet urgent needs.

Researcher and author Michael Cohen today added his voice to reviews of the book “Dead Aid” by Dambisa Moyo. Writing in “World Politics Review,” Cohen says there are many holes in Moyo’s argument, including undocumented statistics and too much faith in Chinese involvement in Africa. But Cohen says that perhaps Moyo’s biggest mistake is that she fails to differentiate between different types of aid, instead lumping all types of aid together in her criticisms.

Moyo, Cohen writes, characterizes all aid as coming in the form of direct cash to governments, ignoring perhaps the most prominent form of aid, especially in recent years, which is health and humanitarian aid, such as medicine, equipment support and health infrastructure.

Perhaps Moyo’s greatest sin is not differentiating between types of aid. Only a few years ago, Botswana was so ravaged by HIV-AIDS that it’s president spoke of possible national “extinction.” Ultimately, outside assistance from the United States, the United Nations, the Gates Foundation and the drug company Merck helped save Botswana from this fate. The Botswana aid came in the form of money and, more importantly, technical assistance, which can often be more effective than resource flows in producing positive development outcomes. Yet, in Moyo’s formulation there is only one type of aid — money, usually bilateral in origin — and it’s bad. Moyo argues that African countries — not the West — should be tackling the AIDS crisis, but ignores the fact that her best example of a successful African economy (Botswana) was unable to do just that.

Cohen concludes that while it is critical that we debate how aid can be effectively and efficiently delivered to reach poor Africans, Moyo’s argument is dangerous and would have the opposite effect that she is aiming for…

In an era of fiscal belt-tightening, this debate is more crucial than ever. That Moyo wants to help her native continent is not in dispute. But the naïve solutions she advocates in “Dead Aid” would have the exact opposite effect, and risk emboldening those who argue for turning off the aid tap for reasons that have nothing to do with altruistic support for African countries.

Moyo would have been better off writing a book that gets to the heart of the problems facing the African continent, instead of offering a bogeyman (aid) and remedy (going cold turkey) that would only consign another generation of Africans to grinding hardship.

-Steve Wilson

Madeleine Bunting of The Guardian wrote a critical review of Dead Aid last month. Below are some excerpts; you can read the full piece here.

There are so many generalisations skidding over decades of history, such frequent pre-emptory glib conclusions, that it is likely to leave you dizzy with silent protest.

Time and again, she fails to grapple with the single biggest factor determining the poverty of the continent – how the state functions, and has failed to function.

Her proposal to phase out aid in five years is disastrously irresponsible: it would lead to the closure of thousands of schools and clinics across Africa, and an end to the HIV antiretroviral, malaria and TB programmes, along with emergency food supplies, on which millions of lives depend.

-Josh Peck

This is cross-posted from Think Progress’ Wonk Room.
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It’s hard keeping up with the avalanche of inaccuracies and misinformation coming from Dambisa Moyo, the Zambian-born banker turned aid critic and now author of “Dead Aid.” You can see the growing catalogue that ONE has compiled here.

Yesterday, we caught wind of a Q and A she did with Fast Company magazine where she confirmed what we’ve long suspected: that Moyo has little understanding of the health and poverty fighting programs she routinely criticizes. This time it was PEPFAR, the US anti-AIDS program, which has put over 2 million Africans on life-saving treatment. Here’s what she had to say:

Let’s talk about Pepfar. They’ve increased it to $30 billion for 15 countries. Say every country roughly gets $2 billion. Zambia has 10 million people, so that’s roughly $200 a person. That’s approximately the per-capita income of Zambia — you’re roughly doubling the per capita income. But that has had no meaningful impact on the health sector. $2 billion and you can’t overhaul the system? That seems to me completely absurd. African governments have completely abdicated their responsibility.

If Ms. Moyo had any basic knowledge of the program – or had done a simple Google search — she’d know that last summer the U.S. Congress approved $39 billion in funding over five years for HIV/AIDS, malaria and tuberculosis programs under both PEPFAR and the Geneva-based Global Fund to fight AIDS, TB and Malaria. Together, these two programs fund projects in over 137 countries.

PEPFAR is not a perfect program and its supporters have historically been its loudest critics, but no one with any basic knowledge of the program would doubt its groundbreaking (and lifesaving) achievements in just five years. By the end of 2008, PEPFAR was supporting treatment for more than 2 million people in Africa; care for more than 10 million people with HIV worldwide, including more than 4 million orphans and vulnerable children; and providing antiretroviral treatment for pregnant women, allowing nearly 240,000 infants to be born HIV free.

Furthermore, consider that just 10 years ago it cost $10,000 per person per year to treat a patient with AIDS. Treatment is now available for $140 per person per year, a breathtaking improvement in efficiency.

Moyo goes on to say that only a fifth of PEPFAR money reaches the ground.

The dollar amount [of PEPFAR] that hits the individual is 20 cents on the dollar if you’re lucky.

We tend to agree with Ms. Moyo that not enough aid money is hitting the ground, but her suggestion that only 20 cents on the dollar in PEPFAR money is hitting the ground has no basis that we are aware of. We challenge Ms. Moyo to provide evidence of her assertion. Where is the evidence? Rather than making up numbers and misleading the public, we wish Ms Moyo would join us in supporting the new aid transparency initiative we’re backing called Publish What You Fund.

Moyo’s comments would be laughable if the subject matter wasn’t AIDS and the question wasn’t whether the United States and others should continue these successful, life saving programs.

-Ben Hubbard, Chief of Staff, ONE

In today’s Washington Post, Michael Gerson offers a largely critical review of Dambisa Moyo’s book Dead Aid. Accusing the book of pushing “the envelope of absurdity” Gerson claims that under Moyo’s proposal, “many now alive would be dead.”

Excerpts below, full piece here. You can read more about this Hot Topic here.

Moyo is on firm ground in criticizing decades of direct foreign assistance to African governments. Such aid has often propped up corrupt elites, shielded leaders from the consequences of their own incompetence and delayed reforms necessary for the development of working markets. She is correct in emphasizing the decisive role of trade, direct foreign investment and local capital in the development of poor nations — sources of opportunity that dwarf aid flows in size and importance.

But Moyo does not take sufficient account of the broad reaction against this kind of direct aid beginning in the 1990s. The United States started taking a much more targeted and strategic approach. The Millennium Challenge Account directed new aid to nations willing to work as responsible partners, dedicated to reform and transparency. Initiatives on AIDS and malaria required and achieved measurable outcomes and have often worked through civil society instead of giving money directly to African governments.

But it is perhaps for the best that Moyo did not write on these issues, because she knows little about them. Referring to America’s AIDS program, she states: “In 2005, the United States pledged US $15 billion over five years to fight AIDS (mainly through the President’s Emergency Plan for AIDS Relief). . . . But this had strings attached. Two-thirds of the money had to go to pro-abstinence programmes.” The year of the pledge was 2003. And last year about one-thirteenth of the program was dedicated to both abstinence and marital faithfulness programs. It is not a small thing for an economist to be off by a factor of nine. And it is not a minor thing for Moyo to dismiss and distort the achievements of a foreign aid program that helped save her homeland of Zambia from social and economic ruin. In 2004, 7 percent of Zambians who needed AIDS drugs were receiving them. By September, that figure should exceed 66 percent. AIDS drugs, admittedly, do not guarantee economic growth. But I suspect that a generation of hopeless mass death would have undermined Zambia’s economic prospects.

If Moyo’s point is that some aid can be bad, then it is noncontroversial. If her point is that all aid is bad, then it is absurd. The productive political agenda is to increase the good while decreasing the bad. The productive academic debate is distinguishing between them.

-Chris Scott

The Huffington Post is running a piece by Dr. Alex G. Coutinho critiquing Dambisa Moyo’s book Dead Aid. You can follow our coverage of this Hot Topic here.

Excerpts below, full piece here
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Africa’s problems are predominantly those of a systematic failure to harness the full potential of its people. Countries that first invest in their people by educating them, protecting their health and providing opportunities inside and outside their countries are those countries that have progressed, with stable economies, a higher GDP and “happiness factor.” In addition countries like India and China have huge internal markets which give these countries considerable insulation from export-driven economic vagaries.

Africa needs to focus on social development — health, education and job creation, while at the same time developing its production capacities and as large an internal market as possible. The other necessary ways forward are, of course, visionary leadership, eradication of corruption, good stewardship of natural resources and, for a while at least, management of Africa’s burgeoning population till generated resources can support larger populations.

I do share the same aspiration for a prosperous Africa that is not dependent on crumbs from the rich. Nonetheless we are now in an interconnected global economy and global destiny and the solutions to underdevelopment do include aid — albeit aid that is linked to social welfare and development, rather than aid to build up armies or aid in return for mortgaging the natural wealth of a country to another “model” development partner.

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-Chris Scott

Strive Masiyiwa is chairman and founder of Econet Group, as well as one of Time Magazine’s most influential people in 2002. He offers the following response to Dambisa Moyo’s new book “Dead Aid.” You can read more on this Hot Topic here.
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There was a time when as a businessman, I used to think of donor AID in much the same way as Ms. Moyo. For me I thought all we needed to solve the problems in Africa was to teach people to be entrepreneurs; to end corruption and waste by governments; get better leadership, and so forth. And yes I saw aid as part of the problem. Then one day about 20 years ago, I attended a funeral of an employee who had died of HIV/AIDS. He left behind a dying wife, and three little children. I was forced to look after those children because there was no one else to help. Within a matter of months, I had over 40 children in my care through similar circumstances! I soon realized that we had a disaster on our hands, and that I had to do something, which went beyond orphans of my own employees. This is when my wife and I set up a foundation we call the Capernaum Trust, through which we provide assistance to more than 26,000 orphans.

Through my involvement with this foundation, which is funded entirely by us, as Africans, I have also come into contact with many donor organizations from outside Africa, and their work. I have worked with them on all types of programs to help the poor and most vulnerable right across Africa. I have seen many good programs, and I have also seen many bad ones, and there is no doubt that there are many things that can be done to improve some of these programs. But, let me say this, quite categorically, the biggest disaster you can create is to end donor aid in Africa, until you have an alternative, that is better, and has been tested on the ground.

As for the views that I held before I got INVOLVED, at a personal level, it was not that they were wrong, it is just that INVOLVEMENT, helps you to get a better perspective on reality. And nothing is ever that simple.

-Strive Masiyiwa, Chairman and Founder: Econet Group