Olumayowa Okediran Commentary: Africa Through The Eyes Of Peter Bauer

Olumayowa Okediran

The Nigerian free marketeer opines about the late development economist's views on the African continent and foreign aid: "Despite Bauer’s careful study of third world economies and his warnings about the demerits of foreign aid [as early as the 1950s], every year, Africa’s begging bowl is constantly replaced with a bigger one. Between 2000 and 2008, foreign aid flow to sub-Saharan Africa increased from $12bn to $36bn, a whopping 300 percent increase, without any significant visibility in real economic development as a result of these huge amounts of money. One would wonder why countries like the United States, which tops the list of foreign aid donors, continue to give, despite its obvious ineffectiveness. Subsidizing African governments inevitably increases the power of government, escalates corruption and as Dambisa Moyo in her book Dead Aid that she dedicates to Bauer states that it is neither necessary nor sufficient for economic development. Benevolence is not the reason why foreign countries give to Africa: it is simply economic control, not economic development."

Mr. Okediran zeroes in on the need for increased trade on the African continent: "Valentine Rugwabiza, deputy director general of the WTO [World Trade Organization], states that trade amongst African countries stands at about 10 per cent of the continent’s overall trade. Africa’s share in world trade is terribly minute and the continent is perhaps the most fragmented continent in the world with 54 countries and numerous borders erecting trade barriers. Established institutions also adversely affect trade: infrastructure is terribly inadequate, making Africa perhaps the most expensive continent in which to conduct business. Rugwabiza, in a speech at the University of Witwatersrand in Johannesburg, South Africa last year stated that it costs around $900 to ship a container from South-East Asia to Africa, while it costs almost $2000 to ship the same container from Africa to South-East Asia."

More: "Bauer was right: Africa’s challenge is not the limited availability of resources.  It is simply the lack of emphasis on the role of trade as a vehicle for economic development.  Africa has the potential to boost economic growth, but before that can happen, Bauer must be listened to."