“Nobody has faith that Africa will ever develop” (Dambisa Moyo at the Jepson School of Leadership Studies)

This is my attempt to extract a transcript from Dambisa Moyo‘s talk at the Jepson School of Leadership Studies. The phrases I can’t hear clearly are marked in the text with a “??”. If you’ve watched the video, free feel to contribute any enhancement. I’m also working on a French translation. Enjoy!

Dambisa Moyo

Good afternoon and thank you so much for being here. I really appreciate it a lot, and I do not take it at all for granted, I must say. Having been raised in Africa, but also, I’ve spent a better?? part of this year on the road and been …?? by tomatoes thrown at me and actually punched as well as I was in Toronto. I realize that one should not take for granted the opportunity to air their views, despite the case, sometimes, it might not be that appealing.

I’d like to start first by saying a big thank you to Dinpert??, to Sue Robinson?? who I haven’t met yet and Shanon Best?? . I must tell you it has been the most difficult and challenging endeavour to schedule my appearance here. Not because — it is generally difficult — I must say this is a particularly challenging scheduling …?? and …?? had to do. And I really appreciate their tenacity and their focus in giving me the opportunity to be here. So thank you so much wherever you are in the audience.

What I thought I’d do today is share with you first a little bit of the information and experience I’ve had since my book came out in earlier this year, in the spring. And from there, I will talk a little bit specifically about why it is that I believe that aid is not working, and in fact, it is contributing to a worsening of the poverty and economic situation across the African continent. And then finally, I will leave you with some good news, which is that there a ton?? of ways of financing economic development and there is a better way to help Africa to become an equal partner on the global stage.

I want to start off by telling you that I never though I’ll actually be quoting your former president George W. Bush, but he had a brilliant say, and I think it is an …?? statement; that we should all be careful of the soft bigotry of low expectations. And I’m afraid to say that where Africa is concerned, we as a global community have approached the situation in Africa with that of low expectations. Low expectations of what Africans can do, but low expectations also about the African continent in general.

I will come back to this theme later, but the fact of the matter is that we know that there is not a single country on earth today, anywhere, in North America, South America, Asia, Europe, anywhere on earth, that has achieved long-term economic growth, and has …?? reduced poverty, by relying on aid. And yet we continue to push an agenda of aid onto the African continent. I might add also, that we also know how to create growth and to reduce poverty. Let me remind you that we happen to live in amazing times, where we’ve just witnessed China move 300 million people out of poverty, over thirty years. 300 million people! And we also know that it got nothing to do with aid. India today has 450 million people living in the middle class. It has the biggest middle class in the world. There are more people living in the middle class in India than there are all over Europe. Again we know that India has not achieved that by relying on aid, to the extent to which African countries rely on it today. And yet, we continue to push an agenda of aid onto the African continent.

Throughout the discussion today, I want to remind you also that there are more poor people in China than there are in Africa. There are more poor people in India than there are in Africa. And yet look at the way we portray Africa and Africans. In the book I call it “the four horsemen of Africa’s apocalypse”. The focus is on wars, diseases, corruption and poverty. And yet, there are many places around the world where that combination of things also exist. And we also know that portraying a continent of a billion people in that manner, is not helping our young people to have confidence on themselves to become partners on the global stage with the rest of their peers. Nor is that type of portrayal a good thing to attract investment, which we so desperately need across the continent. Nobody wants to invest in a place which is viewed as disease ridden and full of poverty and corruption.

And yet that is how Africa is portrayed. You only have to watch your television sets. I’m always amazed when I come to the United States, especially in the Christmas period, at just how many charities and organizations are using young African children as a way of raising money for their charities. You rarely see Chinese children. You rarely see Indian children. We don’t feel sorry for China, we don’t feel sorry for India, but somehow, for the past 40 years, there has been a very successful campaign, to view Africans as poor, as desperate, and as unable to help themselves.

I want to start off today by telling you in this room that we all agree on a few things. So although I may be portrayed as anti-aid, and controversial, and somebody else viewed as pro-aid, the fact of the matter is that we are all on the same team. And in particular, there are three things that I believe we all agree on.

The first thing we agree on is nobody wants Africa to remain in poverty and dependant on aid forever. I think we all wish for a time when Africa and African will be equal partners on the global stage. By the way, I always give people the opportunity, if people feel like they want to see Africa remain in poverty, they are welcome to put their hands up and stop me there. But I think in general we’d like to see a time when we’ll actually see Africa and Africans contributing to the global stage. I’m reminded of my PhD supervisor …?? who always talks about — who was at the …?? not too long ago — but he talked about the fact of Africa sheering of from the rest of the world. So the rest of the world is going in one direction, achieving major strides in terms of economic development and reduction in poverty, and Africa is sheering off and going in another direction. But I think we are all desperately tired of this story, the negative story of Africa; we’d love a time when we hear good news. That is the first thing we agree on.

The second point we all agree on, I believe, is that we desperately need African governments to lead the charge for development and poverty reduction in Africa. There is no point in individual Americans caring about Africa if African leaders don’t care about Africa. The is not point in the American president, the European presidents, or Africans like myself, individuals, on the ground, caring more about the plight?? of the African continent more than the African governments. We need African governments to be incentivized?? to do the right thing for the African people, we need them to be motivated to get the train moving in the right direction. I say this having been reminded in an article that President Paul Kagame of Rwanda wrote in the Financial Times in February this year. He said “Do not assume that you care more about our continent that we do”. And that is part of the problem. There is a tendency that many people who go to Africa, who try to help the developing world think that they care more about our continent. That is not the case, and fact of the matter is that this is not an African problem, it is a global problem. We should all be concerned and we should ensure that African government are front in center??, leading the charge. You should not want to hear from me, you should want to hear from the African presidents. They are the ones who should be standing here, in the line of fire, explaining to us, as global citizens, what the plan is, for Africa going forward.

The third point I want to make, I have to say, completely confessed here, is actually a stolen point. Earlier this year, I was invited to Norway, where I’ve never been to before. Norway which, for people who don’t know, gives about 1% of the country’s income to aid. So I was really surprised as the minister of international development there said he invited me to Oslo, which is the capital of Norway. So I’ve never been, I thought, you know, so what the heck, (as they are paying, this is my holiday)??, so went to Norway, and had the most amazing time there. And the minister of international development made a statement which actually was completely chocking to me. In fact, he was helping me make my case. He said “Although Norway gives 1% of it’s income to aid”, and they do support the aid agenda, “we have to accept, as global citizens, that aid has contributed to the dysfunctionality of African governments, whether we like it or not. And the sooner we accept that, the better off it would be.” I almost fell of my seat and said come on, minister, you are helping me make my case!

The point here is that aid is making our governments in Africa under-perform. I’ll come back to this point, but for now, suffices it to say that on the one hand, we know that there is the issue of corruption, many African governments today and in the past have stolen money that was …?? and targeted for helping Africans. But even in the best case scenario, where the government is not stealing the money, we are creating an environment on the African continent, where our governments are abdicating their responsibilities of providing us Africans with public goods. I’ll come back to this point, but at this moment, just remember how you live in the United States. President Obama knows that he will never die in the White House based on Americans’ vote. And Americans go into their polling votes??, every four years, and they judge the presidency based on public goods which include things like education, health care — and that is now a hot debate in the Unites States –, infrastructure and security; how well had your president provided you with those services. In Africa, those goods, education, healthcare, infrastructure, and security, are provided by foreigners.

I’ll come back to this point, because it is a central point that goes to the heart of the matter. Because you are asking us Africans to go and elect our leaders. But what is the point of electing those leaders, in a democratic process, when they actually don’t provide us with the goods and services that we need. In fact, on my book tour, I was in Kenya, and somebody put their hand up and say, “you know, what you are actually saying, is that we should spend our time voting for the Gate Foundation vs US AID, because they are the ones providing us with the goods”. It sounds like a joke, but actually, it goes to the heart of the matter.

Anyway, at this point, lets just remember very quickly:
- nobody wants Africa to be dependant on aid and poor for ever
- we need African governments to be motivated
- aid has contributed to the dysfunctionality of African leaders.

I want to say a couple of other things before I lunch into my vitriolic attack on why aid is not working.

First of all, what is the definition of aid? Obviously, there is a lot of money that goes to Africa each year. The current estimate is about a hundred billion dollars that goes to Africa in the form of government to government transfer each year. In the book, I basically delineate aid into three categories.

The first category is what I call humanitarian emergency aid. So think about the type of response because of Katrina, or a flood in Mozambique, or earthquake in Iran, or recently the tsunami in Indonesia or the one that we had in 2004. I believe that there is a moral imperative for us as human beings, to act when that kind of tragedy happens. We’ve got …?? So my book is not a critique of emergency aid.

The second type of aid is what I call NGO or charitable aid. So this is sort of giving ten dollars to build a well in Zambia which is my home country, or giving twenty dollars for a girl to go to school in Kenya. I should tell you that I myself is involved in a number of charities. I sit in the board of an education charity; I sit in the board of an HIV charity. However, I do not delude myself into thinking that somehow, because I am helping on the micro-level, we’ll …?? see poverty reduction across the African continent, and that this continent will actually start to grow at high enough levels, so the people’s incomes can improve. The type of interventions that NGO’s and charities are involved in in Africa are bounded solutions.

We in Africa are desperate for ways in which we can overhaul the system, so that Africans can actually find ways to create wealth and jobs for themselves. I want to remind you here that over 60% of the African population is under the age of 24. I’ll just say that again, because people sometimes don’t quite get that the first time. Over 60% of Africans on the African continent are under the age 24. There are countries in African where over 50% of the population in under the age 16. We’ve got a very, very young population desperate to get jobs. I myself, when I go home, to Zambia, and sometimes (stop my car)?? to traffic lights, I can not tell you how many young people, many of them who’ve gone through high school, sometimes even college, are on the street, selling trinkets, dvds, t-shirts, docs, mirrors, I mean name it, because there are no job opportunities. Our countries are not making fast enough to make sure that these young people would have jobs.

Ladies and gentlemen, this is a formula for disaster. Because, we are going to have more disgruntled young people on the street, and ultimately, without jobs and without opportunities, we’ll end up with these cells of terrorism, which we’ve seen already in failed states like Somalia.

Very quickly here, a Somalian friend of mine, who’ve been exiled since 1992, said to me (in fact, I should say, I don’t know if anybody remembers, it was the night that a 17 years old Somalian pirate was arrested and brought to United States) “people don’t seem to appreciate that since 1992, anybody who was born in 1992 or later, so 17 years old maximum, in Somalia, has not spent a single day in school.” So you have a mass, a lost generation of young people, who doesn’t have any opportunity.

Anyway, I digress. The first type of aid is humanitarian aid, the second type of aid is NGO charitable aid. Lets be honest about what that type of aid intervention can do. It can send the girls to school, but it cannot make Africa grow fast enough, to create jobs for this young people on the street. I should also point out here that the UN has estimated that Africa needs to grow at 7% a year to m…?? put a dent?? in poverty, to create enough jobs, so that we see a poverty reduction. This year, Africa is expected to grow at 1.8 percent, just to give you a reference.

My book is not about humanitarian aid, nor is it about NGO or charitable aid. My book is about the third type of aid, which is the government to government aid flows that go to Africa every year. As I said, this number is about a hundred billion dollars a year now.

It is this type of aid which has been going on for the last sixty years. That is about a trillion dollars of that type of aid that had gone to Africa. That is about a hundred dollars for every woman, man and child on earth today. And since the arrival of that aid, we’ve seen steadily Africa’s growth prospect decline. Our incomes have worsened in the past forty years. And just to give you a picture, in the 1970′s, 10% of Africans lived on less than a dollar a day. Today, over 70% of Africans live on less than a dollar a day.

Something is clearly not working. And yet, people don’t want to have a debate about why it is we have one method of development for the rest of the world (China, India, Brazil, Russia, even South Africa), and a completely different approach to economic development across the African continent. This is the reality.

Let me outline to you my top ten reasons why aid don’t work. I was told this is a very good way to outline them because of …?? Then I changed my mind because nobody is going to buy the book. So I’m just going to give you a little teaser here, and we can talk a little bit about it during the Q&A.

The first reason why aid is not working … by the way, this is a great intention, we want to help, isn’t this a good idea, to give money to actually help? And I should actually say, at this point, that if I’d been a policy maker in the 1950′s I’d probably have been a big supporter of aid. We’ve just come out of the Marshall plan, post WWII, and the Marshall plan was a hundred billion dollars of money, that was sent from the United States to European countries to help in the reconstruction of those countries. If I’ve been there, having seen the results, I’d probably would have been a biggest supporter of aid.

Remember ladies and gentlemen that the idea of aid transfer at that time was very simple. We are going to give aid, and aid is going to lead to investment, and investment will lead to growth, and with growth, we’ll have a reduction of poverty. Very simple. But what we’ve actually seen, forty, fifty years latter, is that while aid has increased over time, we’ve seen growth go down and as I outlined earlier, we’ve seen poverty statistics increase. What is the reason for this?

The first point is, if you went outside right now, into University of Richmond and polled a hundred people onto why do you think that aid is not working in Africa, I’ll guess that most people would say “corruption”. I put this as my first reason, I am not going to spend much time on it. I think a lot of people accept the fact, we see the headlines regularly on how money is stolen across the African continent. Some of my critics have said to me “Oh but you know, that is an old story”. Unfortunately it is not an old story, it continues today. My own former president, this year, have been involved in a scandal, having stolen millions of dollars which were diverted to Switzerland of course. Next door to Zambia is Malawi, their former president, as we speak, is involved in a scandal having stolen about fifteen million dollars, in a corrupt manner, that was …?? to HIV-AIDS.

So the whole matter of corruption is very alive and well. If you don’t believe me, every year, Transparency International, which is an NGO, ranks all countries by what they call the Corruption Perception Index (CPM). Consistently African countries are at the bottom. Consistently. Highest corruption. Few Asian countries throw in here and there, well for good measure, but by and large, we’ve got that section?? covered.

How is that possible? Well, a lot of the money that is coming in pours at the government level, the money is taken away, nobody is held accountable. So, I am not going to spend much more time on corruption, but needless to say, the aid flows coming into Africa, are contributing, absolutely so, into the corruption that we see across the continent.

Things like the inflation, the debt burden, these are things that are very well documented, by agencies like the World Bank and the IMF, very clearly documented as part of the artefacts, part of the outcome that emerges in aid-driven economies.

The idea of that disease, some here who are economists might be familiar with that concept, is very simple. We have small economies; my own country is about ten million people. Flooding our economy with US dollars means our domestic currency becomes very strong, because it is so scarcer. And that means nobody is going to buy our goods. Nobody wants to buy goods from a country where it is too expensive. People loose their jobs, there is more poverty, and with more poverty, we get more aid money. So there is a vicious circle that emerges.

The fact is also well documented that aid contributes to killing of entrepreneurship. I love having this discussion in the United States because it is the home of entrepreneurship. It is amazing how many ideas and innovation comes out from the United States. However, look at Africa, doing business there is an absolute nightmare.

Let me give you some examples. Every year, the World Bank publishes a report named “Doing Business around the world”. Consistently, African countries are among the worst places to do business. It is an absolute nightmare. Whereas in places like Australia, it could take a day or two to get a business license, there are places in Africa where it could take up to two years, to get a business license.

Does that sound to you that our governments are interested in creating jobs, in creating systems for opportunities for entrepreneurship? It doesn’t to me. And the reason is, the government does not rely on tax revenues to stay in office, they rely on aid. There is also a growing little treat?? that links aid to civil wars and civil unrest. I don’t know if people know this, but this year alone — Africa has about 53 countries — this year alone, we had four coup-d’état, four overthrows of African governments this year alone. And my friend reminded me that we haven’t met December yet, so I should not get too comfortable. And, also, people should not forget that there has been more civil unrest and civil wars in African in the 1990′s that in the rest of the world put together.

What is the link to aid? The link to aid is that most of the money in these economies pours at the state level. You don’t have a burgeoning private sector, where people can go and steal money or create wealth in other ways. So you constantly have factions trying to overthrow the government. So they constitute?? power, and capture the wealth, which is coming in the form of aid. By the way, there is virtually no penalty for that type of behaviour. As we know, there are a number of places where the president has been in office for forty years, thirty years, twenty years, very common. And even places like Zimbabwe which are criticised in the media in the west, consistently, people like president Mugabe, has received not only aid money from the United States and Britain over these last ten years, but you continue to maintain diplomatic relations with the Zimbabwean government. There is an American embassy in Zimbabwe, as there is a British high commissioner.

So the notion that, somehow, the world is actually riding to the rescue is absolutely false. In the book I talk about two hundred million dollars that has gone to Zimbabwe through the government in the last few years. And that comes from the US and the Britain government. This is from their data, it is public information, so you can check it out yourselves.

You can ignore anything I’ve said by the way, but I hope that when you leave here, your remember what I am about to say now. Which is an aid culture disenfranchises Africans. There is a reason, ladies and gentlemen, that you rarely see Africans on the global stage, including our presidents, going around and explaining what is happening on that continent.

The fact that we think, as a global community, that it is O.K. for celebrities to attend G20 meetings, you know, to attend the IMF and the World Bank meetings, is laughable. Americans would never tolerate Mike Jagger or Bruce Spinting?? talking about the housing crisis when President Obama does not say anything. And yet, that is the world you ask us to live in. We, standing in the hot African sand, electing our leaders, and yet, the world doesn’t care about what African leaders have to say. Which is why you never hear from them. You’d much rather hear from the celebrity culture, which I think, unfortunately, although they have a big following, tend to rely on the negative stereotypes of Africa.

I actually wouldn’t be so critical of them, if they used their platform in a positive way. Instead they continue to perpetuate the very negative image [of Africa]. A woman in Kenya said to me, “how to you expect us to raise young Africans to be great citizens of the world, when you are constantly telling us that we are not good enough, we are too poor, we are not smart, and we are not equal partners on the stage of the world?” It is a valid point. And just in the same way psychologists will tell you that telling a child consistently that they are an underachiever, is not a good thing. You’ve consistently, for forty years, told Africans that they are not equal partners on the global stage, that they under-perform, they are a drugen?? society, and you continue to portray our children, on television, in the worst way.

There is a saying in the United States around Boston Tea Party, which is that “there is no taxation, with representation”. In African, we have what I call the reverse Boston Tea Party. We have no representation because there is no taxation.

As I said earlier, in the United States, you hold your government accountable, because they know that they have to please the American people, because the tax base comes from the American people — this is a symbiotic relationship.

In Africa, our governments spend virtually all their time courting and catering to international donors. Because they can live or die in office, because of this donors, not because of what the African people think.

As I touched on earlier, things like education and health care, infrastructure and security, what we call “public goods” in economics, are provided in Africa, not by our governments, but by the international community.

And here, let me give you a specific example. My country Zambia has ten million people. One in three Zambians is HIV-positive. By all standing, it is an epidemic, and we should care. And yet, 95% of the infrastructure around providing drugs, around helping Zambians to get anti-retroviro drugs, and providing clinics and so on, is done by US-AID, which is the US government. And you should actually be proud of that.

But, as a Zambian, I am deeply concerned. Because the United States government has it’s own problems. One in ten Americans is out of work. You yourself as a country are borrowing from China. You have demographic issues, you have health-care concerns. And you are asking me as a Zambian citizen, to basically hitch?? the whole health-care system in Zambia onto a country that has a financial crisis of it own. That is not long-term sustainable. And it is that type of issue that my book is really trying to alert us to.

OK, so, now having depressed you completely, I am going to give you a bit more good news. The good news is that there are …?? of ways of financing development. As I said earlier, we live in a time when we have so much evidence, over three hundred years evidence, on what works, what creates jobs, what creates wealth.

I liked president Obama’s inauguration speech, when he said “we should not forget that the free market system is still the best system. It is creating wealth, and is also the best way of create freedom.” It is clearly not perfect as we’ve learned in the last 18 months, but we should not throw the baby out with the bath water.

And unfortunately, where Africa is concerned, we are not applying what we know as global citizens to be the toolkit that can actually meaningfully change things forever.

What is this toolkit comprised of? Things like trade, things like bond-directed investment?, microfinance, remittances, savings, taxes. The things that your governments use to finance job creation in the United States and China, Europe, are not the tools that you are suggesting that we use.

Let’s take trade for example. It is well known fact that African each year looses between 300 and 500 billion dollars in export earnings, because of subsidies. So the American government has chosen to protect American farmers, and frankly, although as an African it hurts me, I understand that. And I’d hope that the African governments also fight and work on the behalf on African people. Which is why, I think it is an absolute waste of time, for African leaders, to spend their time going to WTO, having big arguments about the American economy opening it’s market to African goods. And instead, we need to spend our time focusing on new regions of the world that actually want African products, China being one of them. There are about 1.3 billion people in China, 7% arable lands, China desperately needs food. That is a great opportunity for Africa to sell food into that market, instead of spending our time trying to get into the US.

As I mentioned earlier, doing business in Africa can be a nightmare. Here I give you a quick example. I went to Rwanda, Kenya, and Tanzania, which are three countries very near each other in Africa. I needed to get three visas, and to change my currency three times. Again, this does not sound like a formula for investment to me. As an African, I was really put off. If I am an international investor looking to put my knee?? to work in these countries, I’ll definitely be put off. The notion of regional integration is well established here in the United States, but also in Europe. And yet, we know theoretically that this works, but as a practical matter, we’re not seeing it in Africa.

I don’t want to take up too much time. I just want to say two other things. One is with respect to what should we do with the aid system. In the book, I propose a phasing off period. Part of the problem is that African governments view aid as a permanent income. They think aid will always come. And in fact, they are encouraged to think that. Oh don’t worry, don’t worry about anything cause aid will always be there. In fact, someone in Europe said to me, this kind of sounds like a teenager who is lying on the couch, and every month you say, listen, you are going to get a job, and he says ya ya ya, and the next month you are like, you still haven’t got off the couch, you’ve got to go and get a job. It is kind of like that, we need some tough love, so that we can see African governments emerge into equal partners, as I keep saying, on the global stage.

So how do we do that? My recommendation is to have an explicit and transparent policy, where we say that, in a certain period of time, aid will start to decline. It is actually already happening, fortunately for me, but unfortunately for many people. It is part because of the financial crisis. Western governments are shrinking their budgets and not giving as much aid as they have in the past. But we also know that the extent that aid has worked in the past in the Marshall plan, or what I call the aid graduates (countries like South Korea or Botswana). It worked when people have gone with the money, (short sharp fine night term)?? and then left. So the Marshall plan as I said earlier was 5 years. The problem in Africa is that it is an open ended commitment. Nobody wants to have a discussion about when aid is going to end in Africa. People are always up in arms and get screaming that I am killing African babies, when I even suggest that we should have a discussion about when aid is going to end. Again I quote president Kagame here, he said “the only type of aid that works in Africa, is the one that makes sure that it doesn’t exist in the future.” Nobody has that discussion, everybody thinks we should keep giving aid, no discussion about …?? off.

I am going to end here with a quote from a friend of mine, a Nigerian friend of mine, who really discouraged me from writing this book. He said, you know, it is a complete waste of your time, why are you doing this, everybody knows that aid doesn’t work, you should be asking yourself why these people keep pushing the aid motto onto Africa when they know it doesn’t work. And, you know, I talked back and forth?? about George Bush’s quote about low expectations for Africans, and then, he finally said to me: “Africa is for development what Mars is for NASA”. Every year, we spend hundred of billion of dollars doing research, experiments, analysis about Mars, into Africa, but actually, nobody ever believes we’ll ever live in Mars, and the fundamental problem is that nobody has faith that Africa will ever develop.

Ladies and gentlemen, thanks you very much for your time, and I’ll be happy to take your questions.