• Wednesday, December 06, 2023
businessday logo


Aid vs. Dead Aid – an expanded collaboration to build ‘Knowledge Africa’


 The recent “exchange” between Bill Gates (an undisputed inventor and philanthropist) and Dambisa Moyo, a renowned international economist and critic of aid, has presented the appropriate platform to highlight how an expanded collaboration of aid and sustainable partnerships can drive education, skills and knowledge (ESK) that will transform much of Africa. ESK is one ingredient that, if well-positioned, will transform and drive real change; this can be seen in Europe where economies that invested in ESK seem to have weathered the economic downturn better than countries where investment in ESK had become diluted over the past 20 or so odd years.

ESK presents huge challenges in Africa, and in particular sub-Saharan Africa. There is a huge skills shortage on the continent that appears to be negatively correlated with the recent growth rates that in some countries have surpassed China’s. There is therefore a need to align local skills with growth rates in the right direction to achieve and sustain local economies where individual households are efficient, productive and share the national success story.

Gates on one hand believes aid has assisted and intervened in dire circumstances where children would often otherwise be out of school or die because basic health needs could not be met or addressed, and I cannot but applaud the good deeds of the Bill and Belinda Gates Foundation in areas such as public health and research to eradicate killer diseases such as malaria. On the other hand, the Zambian economist, who has seen the real effects of aid by being born and raised in Zambia, believes credible partnerships and not just aid should and would drive sustainable growth on the continent and christened the aid concept Dead Aid embodied within the hard back that brought her to international repute.

Frankly, I think both of them are right, but arguments like this continue to do little for those on the muddy and dimly-lit streets in the urban slums of Lagos, Nairobi or Johannesburg. I choose to use education to drive my point home. At the moment, African economies are experiencing a boom due to several factors and for once several investors are looking to Africa, not because they love Africa but because a diversified (I emphasise the word diversification, only an African can throw 100 percent of his portfolio into the continent) portfolio that includes Africa promises performance above par.

However, the word on the streets is very different as growth within individual households is stagnant or often recessive. I speak to committed individuals who have been looking for work for five or more years post secondary, vocational or tertiary education and are unable to find work beyond the four walls of the “face me I face you” accommodation they know as home. Truth is most of the youth that have been forecast to drive the growth of these economies lack the education, skills and knowledge to impact their household economies, let alone the larger economy.

One would wonder why this is the case when billions in a concoction of hard currencies are poured into quixotic interventions sponsored by international development partners to enable the achievement of benchmarks such as MDG goal 2. The tough question is whether higher pupil enrolment actually translates into numeracy and literacy skills that drive and support real domestic growth.

The answer is largely NO. So on one hand, aid has been provided but it is not sustainable because enterprise and innovation are not fostered within the local economy. The recipients of aid often have no recourse to other alternatives to get a sound education, skills and knowledge background. Therefore, a fund that allocates a low-interest loan to beneficiaries without collateral will benefit both the recipient and provider. The exposure to counterparty risk can be reduced to an acceptable level by making payments direct to tuition providers from the fund or even by pooling funds into an educational insurance fund akin to the health insurance arrangement now available across sub-Saharan economies. The primary beneficiaries of such a scheme would include the young adults (16-24-year-olds), the unemployed and those with disabilities (a group often forgotten). International development partners or respective ministries of finance may also provide loan guarantees to reduce counterparty risk exposure. Generally, human beings are more motivated to excel when they pay for something other than the allocation of the proverbial free manna while in the wilderness.

This sustainable aid is really an extension of the good works of institutions such as those founded by Gates, and I believe this is where Dambisa Moyo visualises – a place where the recipient is also seen as a credible counterparty to transact with and not merely a donee benefitting from the generosity of a rather empathic and sometimes sympathetic donor. This approach will address skills gaps in the longer term and create more economically-independent households as much needed skills and productivity will be locally available.

In conclusion, perhaps the Gates-Moyo debacle has opened a new argument and hopefully will cause a paradigm shift to a more sustainable platform where aid plays an active role in the short term and allowing for partnerships like the one I have briefly narrated here that will deepen the education, skills and knowledge sector through the acquisition and provision of a portfolio of skill sets required to drive a future African economy. 


Bassey-Eyo, an active campaigner of child rights, sits on the Board of Trustees of LANI Foundation where he advises on strategy and funding.


Send reactions to:

[email protected]/en