/ 24 January 2022

Foreign aid is not ‘aiding’ the development of Nigeria

Nigeria Unrest Police Demo
Nigerian youths seen waving the Nigerian national flag in front of a crowd in support of the ongoing protest against the unjust brutality of The Nigerian Police Force Unit named Special Anti-Robbery Squad (SARS) in Lagos on October 13, 2020. (Photo by Benson Ibeabuchi/AFP via Getty

Foreign aid to Africa has been an issue of debate over the past few decades. This is mainly because the economic and development expectations of developing countries have not been met despite increased foreign aid over the years. Hence, the effectiveness of aid is questioned. 

Economic hardship has made people, particularly from developing countries, migrate to other parts of the world in search of better living conditions. Those without the financial capacity risk their lives to cross the Mediterranean Sea into Europe. 

After colonialism, several Western countries created systems to “fast-track” the economic development of newly independent countries. Money pours into Africa not only from government-to-government aid programmes, but also from international organisations such as the World Bank and the International Monetary Fund (IMF), which operate as a conduit between donor and recipient nations.  

Since the mid-20th century, conventional development economists have been obsessed with aid to Africa, centering it as the solution to bridging the economic gap between the Global North and Global South, especially African countries. But this is not as effective as it is branded to be. In 2012, the World Bank reported that of the 700 million people pulled out of poverty in the past two to three decades, most of them came from Asia (which received less aid), particularly China and India

Despite receiving the larger share of foreign aid, Sub-Saharan Africa accounts for seven of the 10 countries with the greatest number of people living in poverty. They account for nearly three-quarters of worldwide rural poverty, or 305 million people. Why then has this aid not yielded satisfactory results in African countries such as Nigeria?

Corruption and dependency 

Nigeria boasts of having the largest economy in Africa. Yet, the government, in several instances in recent years, has gone to beg for money from the IMF and the World Bank for its development projects. Although collecting loans or owing money as a nation is not necessarily a terrible thing (some “first world” countries in Europe are in debt themselves), because monies collected can be used for several development initiatives, the question is: to what extent is the money being used by the Nigerian government to foster the development of the country? This question is important because Nigerian leaders are infamous for being “fantastically corrupt”. Although this label attached to Nigerian politicians by a former British prime minister generated dissatisfaction and concern among Nigerians like myself, reflection on some actions of some Nigerian politicians prove the label to be true, and there is tons of evidence to back it up.

Foreign aid exacerbates the problem of corruption in nations. Nigeria currently ranks 148 out of 180 in Transparency International’s corruption index. Instead of aid being divided equitably among the population or used to encourage growth and benefit the people that need it the most, the money is spent on bogus elephant projects and fraudulent government contracts, among other things.  

If the aid given by Western institutions and governments were effective, then this should have had a positive effect on the development of Nigeria and subsequently been reflected in the policies and actions of the leaders of the country in terms of infrastructural development. For example, Nigerian politicians patronise hospitals in European countries, particularly the United Kingdom, when they are sick, but citizens are at the mercy of dilapidated hospitals that have not been developed despite huge sums being donated by the likes of the World Bank and the Bill and Melinda Gates Foundation.  

Aid dependency is another issue. The Nigerian government has grown accustomed to receiving vast amounts of money, to the point that they give an impression that they are not really interested in sustainably providing solutions to pressing problems, because they will always get “free” money from the West. They do not see the need to invest heavily in some sectors because there is an understanding that if the sector suffers and gathers enough attention, international actors will come in and “save the day” with their loans and donations. This obstructs any progress in terms of human or economic development. Although it is true that the government has been commissioning some infrastructural projects in some states with the aid money, the problem is that foreign aid is not sustainable, especially for developing countries such as Nigeria. 

The issue of aid is not just about the West imposing its strategies on the Nigerian government. The current administration led by Muhammadu Buhari is known for always requesting aid from global actors (much to the displeasure of Nigerians) to finance “infrastructure projects” in the country. This happened in 20172020 and most recently, in 2021, which drew a lot of concern from Nigerians who believed there was no correlation between the aid previously received and the development of the economy. If past aid received did not yield results, what is the probability that the aid being requested now will achieve anything better?  

The way forward 

It is clear that foreign aid is not effective in helping Nigeria (and other African countries) achieve their development goals. To this end, I submit that the “aid sector” needs to be reformed; if global players cannot help, then they should not exacerbate the problem. To demonstrate progress rather than failure, new policies and incentives need to be developed. 

Instead of requesting aid, Nigeria can strengthen trade ties with foreign countries, beginning with using the new African Continental Free Trade Area Agreement. This will boost the economic capacity of the country as well as those of neighbouring countries. 

Citizens’ capabilities must be developed so that they can become wealth creators. 

Foreign aid is not as important as sound policies and strong economic management. 

Aid in the form of loans should be the last resort, and not the first option that Nigeria should turn to. In the case where aid is desperately needed, building strong institutions can also help in ensuring that the funds achieve the objectives. 

Before providing financial support, global actors can rather provide mechanisms that help improve governance and build strong institutions that can hold the government to account. This type of aid will not only ensure money is properly spent, but it will also be a sustainable solution for the development of the country.