Why Africa is Being Destroyed by Foreign Aid

Over the past 45 years the US alone has given over $500 billion in foreign aid to the continent of Africa. The US even gave Africa $1 Billion last year, despite the fact that it has been facing it's own economic depression for the past several months. You'de think that with all the money sent to Africa, the poverty there would have been eradicated or that some sort of positive change would have occurred buy now, right? According to Dambisa Moyo, the author of the New York bestselling book Dead Aid, instead of helping Africa our efforts have hurt them even more. Moyo, who was born in Africa and has a PhD in Economics from Oxford University, says that despite the trillions of dollars the world has given Africa, it is still the poorest continent on the planet and poverty and disease there has more than tripled since we began sending them aid in the 1960's. Some 46% of Africans survive on less than $1 a day and half of them are surviving on less than 50 cents a day. Clearly Africans are not receiving any of the $$ that the world is sending them, so where exactly is it going then? According to Moyo, the money is ending up in the hands of corrupt African politicians, criminals, and individuals who serve to defeat the idea of a prosperous Africa, not the starving women and children we often see images of on the evening news.

Moyo also says that strict government regulations on African businesses have oppressed them economically. Many African leaders have established government monopolies, price controls, high taxes, nationalized foreign investment and excessively regulated foreign investors and even their own business class. As a result, African nations have seen huge losses in economic activity and foreign investment, a deteriorating infrastructure, and declining economic competitiveness with other developing regions. Basically, government interference in business has hurt Africa, the money we have been sending them is ending up in the wrong hands and helping these oppressive governments and the only way to save them is to help them find ways to trade with China, access the capital markets, and promote capitalism. That thing that everyone seems to hate these days called "capitalism" is the cure to a horrible and devastating system that is destroying an entire continent.

There is a way to put money directly into the hands of the African people, instead of their corrupt governments. An organization called Kiva, lets people like you and me give small loans over the internet to Africans, who are then able to start their own businesses. You can give a loan as small as $25 and as much as $1000, which is enough money to start a business in Africa. Not only are Africans able to start their own businesses with these small loans, but they are often able to live comfortably and support their entire families and sometimes even their whole village. And you won't believe this....99% of these people pay back their loans in full, and with interest (Forbes, 2009). A woman in Tanzania started her own juice business with a loan of $300 and was able to support her family and send her children to school as a result. So far, Kiva has assisted about 40,000 borrowers in 40 countries and provided a total of about $27 million in funding (Forbers, 2009). The founders of Kiva won a Nobel Peace Prize for their ingenuity in 2006. Foreign aid and strict governmental regulations have hurt Africa, but Kiva is an example of how capitalism and promoting the small business owner is the best way to empower Africans and help a person, a village, and an entire continent.

Read more about Kiva and how foreign aid is hurting Africa
http://www.forbes.com/2008/06/03/kiva-microfinance-uganda-ent-fin-cx_0603whartonkiva.html
http://www.kiva.org/
http://www.heritage.org/Research/MiddleEast/bg947.cfm