Source of poverty in Africa

The African culture of dependence from developed countries is the source of poverty in Africa. In the book ‘Dead Aid’ by Zambia Scholar Dambisa Moyo, has noted that, the current African poverty is the result of dependence from developed nations. In her book Moyo comments that African countries are poor because of aids. “African countries are poor precisely because of all that aid”

Moyo insisted that, the receipt of concessional(non-emergency) loans and grants has much same effect in Africa as the possession of a valuable natural resource: it's a kind of curse because it encourages corruption and conflict, while at the same time discouraging free enterprise.

To solve African economic problems, Moyo gave four solutions. She said in order for the African countries do developed they must, First, African can governments should follow Asian emerging markets in accessing the international bond markets and taking advantage of the falling yields paid by sovereign borrowers over the past decade.

Second, they should encourage the Chinese policy of large-scale direct investment in infrastructure. (China invested US$900 million in Africa in 2004, compared with just US$20 million in 1975.)

Third, they should continue to press for genuine free trade in agricultural products, which means that the US, the EU and Japan must scrap the various subsidies they pay to their farmers, enabling African countries to increase their earnings from primary product exports.

Fourth, they should encourage financial intermediation. Specifically, they need to foster the spread of microfinance institutions of the sort that have flourished in Asia and Latin America. They should also follow the Peruvian economist Hernando de Soto's advice and grant the inhabitants of shanty towns secure legal title to their homes, so that these can be used as collateral. And they should make it cheaper for emigrants to send remittances back home.

Moyo recounts some of the- more egregious examples of aid fuelled corruption. In the course of his disastrous reign, Zaire's President Mobutu Sese Seko is estimated to have stolen a sum equivalent to the entire external debt ofhis country: US$5 billion. No sooner had he requested a reduction in interest payments on the debt than he leased Concorde to fly his daughter to her wedding in the Ivory Coast. According to one estimate, at least US$IO billion - nearly half of Mrica's 2003 foreign aid receipts leave the continent every year.

She explains about political issues as another factor for African economic problem. On the political side, some 50 per cent of the continent remains under non-democratic rule. According to the Polity IV database, Africa is still home to at least eleven fully autocratic regimes (CongoBrazzaville, Equatorial Guinea, Eritrea, Gabon, The Gambia, Mauritania, Rwanda, Sudan, Swaziland, Uganda and Zimbabwe). Three African heads of state (dos Santos of Angola, Obiang of Equatorial Guinea and Bongo of Gabon) have been in power since the 1970S (having ascended to power on 2 December 1967, President Bongo has recently celebrated his fortieth year in power). Five other presidents have had a lock on power since the 1980s (Compaore ofBurkina Faso, Biya ofCameroon, Conte of Guinea, Museveni of Uganda and Mugabe of Zimbabwe). Since 1996, eleven countries have been embroiled in civil wars (Angola, Burundi, Chad, Democratic Republic of Congo, Republic of Congo, Guin"ea Bissau, Liberia, Rwanda, Sierra Leone, Sudan and Uganda).8 And according to the May 2008 annual Global Peace Index, out ofthe ten bottom countries four African states are among the least peaceful in the world (in order, Central Mrican Republic, Chad, Sudan and Somalia) - the most of anyone continent.

There is a school of thought which argues that recipient countries view loans, which carry the burden of future repayment, as different from grants. That the prospects of repayment mean loans induce governments to use funds wisely and to mobilize taxes and maintain current levels of revenue collection. Whereas grants are viewed as free resources and could therefore perfectly substitute for a government's domestic revenues. This distinction has led many donors to push for a policy of grants instead of loans to poor countries. The logic is that much of the investment that poor countries need to make has a long gestation period before it starts to produce the kinds of changes in GDP growth that will yield the tax revenues needed to service loans. Indeed, many scholars have argued that it was precisely because many African countries have, over time, received (floating rate) loans, and not grants, to finance public investments that they became so heavily indebted, and that aid has not helped them reach their development objectives.

From what had been said by Dambisa Moyo, are almost all true. We as Africans there is no way we must avoid aids from developed countries if at all we need economic development.

It is aids that make us not to think bigger for future our continent. If will consider what Moyo suggested on four solutions to African economic problem, we must step forward.