Aid is destructive; Africa as a case study by Joseph Theophilus Kehinde

Over time aid has been a long aged debate matter among political thinkers and general readers in perspective. The word "aid" is now no more a new phenomenon because of the happenings around us and what we see. In this paper work we shall be looking at the discourse  "aid is destructive " and not destructive but destructive to bring about the disatatrous slow progress and development in a country, most especially the Third World system.
 
    In catching the rat in it hiding place, one must first know how to catch the rat. This implies one must first conceptualize the concepts in giving us proper understanding and meaning of our discourse. What therefore are the concepts. -----Aid, destructive. What therefore is aid?
In international relations, aid (also known as international aid, overseas aid , foreign aid or foreign assistance ) is – from the perspective of governments – a voluntary transfer of resources from one country
to another. Aid may serve one or more functions: it may be given
as a signal of diplomatic approval, or to strengthen a military ally, to reward a government for behaviour desired by the donor, to extend the donor's cultural
influence, to provide infrastructure needed by the donor for resource extraction from the recipient country, or to gain other kinds of commercial access. Humanitarian and altruistic purposes are at least partly
responsible for the giving of aid.  Carol Lancaster defines foreign aid as "a voluntary transfer of public resources, from a government to another independent government, to an NGO, or to a  international organization (such as the World Bank or the UN Development Program) with at least a 25 percent grant element, one goal of which is to better
the human condition in the country receiving theaid. Lancaster also states that for much of the period of
her study (World War Two to the present) "foreign aid was used for four main purposes: diplomatic [including
military/security and political interests abroad], developmental, humanitarian relief and commercial." The word destructive means damaging, desssembly etc. Now that we have been able to understand what AId and Destructive means it is now very imperative to now understand how has aid been destructive.

     African which is the case study here will still continue to amaze me. Africa which is a resourcefully blessed continent with the availability of human and natural resources flowing like milk and honey. Foreign aid is a very good now only when it is proper utilized in the correct manner. However it has been destructive to African state because it get it more worse than before. Africa which is rich,why can't it lift her country out of menace but only lift the pockets of the African leaders.

    Aid is however destructive because It is claimed that even under most favourable
circumstances, foreign aid can only contribute a small proportion of the investment needs of a
developing country.The major growth effort has to be its own. It is,therefore, a risky strategy to depend upon foreignaid for growth, particularly because of the risksinvolved in the form of growing external indebtedness and other possible ill-effects.  There is a risk that foreign aid may be taken for those projects for which no imported inputs are needed and which can be implemented with domestically available inputs.Aid-receiving history of India is full of such examples, which include construction of irrigation canals, forestry projects, sewerage facilities and
the like.All such projects needed only local material and rupees to buy them. Depending upon foreign aid (say US dollars) for such projects retards the social and economic growth of a country and India also suffered on this account. The causes of these ill-effects include the following:
i. The legislators and general public are not
aware of the fact that foreign funds for such
projects means sanctioning of loans in foreign
currencies. And, foreign currencies are not
needed for procuring inputs including labour
from within the country.
ii. Projects which do not need imported inputs but arc still highly helpful for social and economic development of the country are not taken up unless “foreign aid is available for them.” Foreign aid, therefore, becomes a barrier to growth rather than a help for it. It becomes a hurdle against domestic growth efforts. There is a strong possibility of an aid-receiving country being unable to add sufficiently to its export earnings.Consequently, there is an inherent tendency for its external indebtedness to increase cumulatively and become Unsustainable. The destruction of aid is also brought about the Aims of Aid Givers,
Aid-giving countries have been using it as a
means of promoting and protecting their own
interests, including political ones. They have been trying to impose highly stringent conditions on the aid- receiving countries.
They have also used their economic strength for imposing unfavourable terms of trade and
specific monetary and fiscal policies.
 
     
countries.
Recently, China borrowed certain corrupt regimes in Africa ( Knowingly, hiding under the noninterference policy) money to carry out certain developmental programs and as identified by Alexander Sack 'the odious debt', this money has been misappropriated; being channelled to certain tribes thus the reason for borrowing such money won't be accomplished and yet, a debt crisis would occur. A major element of imperialism is putting the language of a country in another. During the fashola administration, he wanted to introduce the Chinese language in Lagos state government schools because money was borrowed to the Lagos government.

More recently is the Two(2) billon dollars China is planning to borrow The Federal Republic of Nigeria in yuan ( the Chinese currency). This is another form of imperialism; a device of devaluing our naira more and creating a dependency on the yuan for trade with China. The amazing thing here is that China is placing Nigeria under a condition, that is all materials needed for the project to be undertaken will be purchased from China and according to governor Fayose of Ekiti in his letter to the Chinese government of recent, the country's debt burden would increase and the implication of this is a 'increasing floating rate' and a ridiculously compound interest that the country would then need a debt relief to pay back at the end of day.  What we should know also is that China is devaluing her currency intentionally in order to gain favourable market for the African states. It is predicted that the Chinese currency may appreciate against the dollar in the near future thus creating a problem for African countries that borrowed money; implication of this can be linked to the petrodollar recycling of 1970.

Of the Third World, Africa contains many lessons for the fraud of ‘aid’. It has lost self-sufficiency in food production that it enjoyed before development assistance was invented, and during the past few decades, has become instead a continent-sized beggar hopelessly dependent on the largesse of outsiders---per-
capita food production has fallen in every year since the 1960s. Seven out of every ten Africans, are furthermore, now reckoned to be destitute or on the verge of extreme
poverty, with the result that the continent has the highest infant mortality rates in the world, the lowest average life-expectancies in the world, the lowest literacy rates, the fewest doctors per head of population, and
the fewest children in school. Tellingly, after Africa became the most ‘aided’ continent in the solar system in the last decade, its Gross Domestic Product per capita shrunk by an average of 3.4 per cent per annum. Sob,
sob sob!!!. In the past fifty years, more than $1 trillion in development-related aid has been transferred from rich countries to Africa. Has this assistance improved the lives of Africans? No. In fact, across the continent, the
recipients of this aid are not better off as a result of it, but worse—much worse. In Dead Aid, Dambisa Moyo describes the state of
postwar development policy in Africa today and unflinchingly confronts one of the greatest myths of our time: that billions of dollars in aid sent from wealthy countries to developing African nations has helped to reduce poverty and increase growth. In fact, poverty levels continue to escalate and growth rates have
steadily declined—and millions continue to suffer.
 

   
At least six million children in Ethiopia face critical food shortages as a result of the worst drought in 50 years.Aid agencies and the government said that they must
raise more than $1.4bn of aid to handle the crisis, but that only about half of the amount have been collected. Here, Ethiopia has been receiving aid now for years from aid government, still yet crises is still going on. This is what we are saying that Aid is destructive.

   On this final note we have seen that aid is more destructive than good most especially the Third World country. Africa can grow and transform again only if our government aren't myopic to the things around them, and most especially interest based is very paramount.
African leaders should be interested in things of their people and not their pocket

Joseph Theophilus Kehinde a third year Political Science student of Olabisi Onabanjo University.

Ref: New pattern of Africa's Neocolonialism; Nigeria, China as a case study by Gbadegesin Onyekachukwu..

#i am a formidable legacy ®

Unfolding The Bilateral Relationship Of China And Nigeria - Gbadegesin Onyekachukwu John

The media for the past few days have seen very piquant times. National issues ranging from that of the National Assembly and the Presidency to Pipeline vandalism and the most pressing one; China's aid to Nigeria. Earlier this week I published an article titled 'new pattern of  Africa's colonialism; Nigeria and China as a case study'. The case revolving around this bilateral relationship can be divided into (3)
1. 2billion loan (Budget deficit)
2. 6billion loan (Infrastructural projects)
3. Currency swap

The two billion as we are made to know is for the 2016 budget deficit while the other 6billion is to help foster some developmental programmes in the country. Lastly is the currency swap, which is generating much controversy both intellectually and other wise. Nigeria and other African nations at the beginning of the post-colonial era(1960s to 1980s) due to weak economic management and international interference lacked the basic instruments for bringing development. This situation created by her former colonists met help also from them. It would then seem like a genuine restitution of the European countries. At the inception, external manipulation of these funds could not be predicted due to the juvenile nature  of these countries. Corruption was at its peak therefore its implications on the recipient parties were severe; internal and external generated revenue were turned into personal accounts of government official thus bankrupting the economy. One with a sound mind would think that money borrowed is due to an emergency ( Pressing needs) and therefore will be spend judiciously ba? Well for Nigeria and other misgoverned African countries the reverse has always been the case. If we think of this to be a thing of the old let us not forget the money(1billion dollars )borrowed externally to fight Insurgency in the country(2014 ). This money till date has not been paid back and also lacks proper documentation. Instead of appropriating the funds with a national view of the citizenry's interest the money  was shared amidst our amiable leaders. Issoriat!

The aim of this Short paper is to briefly analyse and weigh the advantage and disadvantage of borrowing from the Chinese government.

History repeating itself would be a big blow to the so-called intellectuals in government and Nigeria as a whole. I am not a pessimistic human being but if you choose to call me that, no offence would be taken.

In total, Nigeria will be borrowing 8billion dollars from the Chinese government and with the newly signed currency swap between both countries this money would be paid back in yuan. Also business transactions between this countries would be carried out with ease as the yuan will be circulating within the country thus it becomes accessible to everyone importing or exporting from/to China. Not to forget, certain African countries have included the yuan in their foreign reserves so it creates a hidden link of trade partners within the continent. The pressure of the de facto dollar also would decrease due to low demand for it since China is taking over subsahara trade rapidly thus naira is predicted to appreciate against the dollar(not being as valued as the dollar though). This benefits for the Nigerian economy is smoothing to the average Nigerian business man.

As a political analyst, I am more concerned about the sustainable development of my mother country. The above stated benefits are what can be described as Short term goals. So what is going to be the case at the long run? Let's start with the case of trade with China.
        Nigeria is one of the top crude oil producers and exporters in the world. Like many other countries in the world, China is willing to import crude oil from Nigeria. However, compared with Nigeria’s other trading partners, the amount of crude oil exported to China is much lower, which only constitutes 1% to 2% percent of Nigeria’s total
crude oil export. In August 2011, China imported $1.1million metric ton of Cassava chips fromNigeria. On the other hand, China as at 2013 importation into Nigeria reached $11.6 billion.

As time unfolds, the Nigerian state would keep spending all her Yuan for business (importation) with China until the Yuan becomes scares in her foreign reserve then due to the overwhelming dependence that is coming, demand for the Yuan would increase and the three years derivative time would double. Nigeria and other Chinese dependent traders in Africa will then be forced to trade with forex to buy yuan. 'Demand and supply law', as demand increase, the yuan appreciates. The implication of this is another dollars in the making.

As I started in my previous article, the Yuan was intentionally devalued by the Chinese government in order to establish itself as a market here in Africa. Spoke with a graduate on finance about the 'currency swap' and he established two outcomes; either we pay the loan back with a ridiculous interest rate due to the yuan appreciating in the nearest future or we pay with an agreed rate at inception no matter the values of both currencies. It thus depends on the agreements in the paper which has not been made public. Thus this is a 50/50 chance. If it takes pure loaning terms then Nigeria is planning to run into a debt crisis but if its another way round, at least the country is safe. Also is that there are conditionalities attached to this aids i.e purchasing equipments needed for carrying out the projects and programmes from the Chinese market. How then is this going to help us develop our local industries; killing the 'buy Nigerian products' campaign quickly.

Gbadegesin Onyekachukwu John a student of Olabisi Onabanjo University Department of Political Science.

New pattern of Africa's Neocolonialism; Nigeria, China as a case study by Gbadegesin Onyekachukwu John

The issue of development in the African continent is one that can never be concluded thus new processes of its existence and dynamics are theoretical and intellectually inquired per time in the continent. In a world where intellect is becoming the value for positive reward, an ideal state is therefore beacon to acquire a palatable standard of intellectual superiority in all sectors of its public life in order to attain the good life(Develop) and also to either be ahead of other sovereign states or become an equal where exploitation on a side is minimized to an extreme. Sovereign states such as China, Brazil and other second world countries are practising this currently while the ripple effect of this is on the African continent. You might ask that how does the good of another contributes to the evil of another? the answer lies in the undeniable fact that capitalist development in the sphere of subjugation brings about underdevelopment for lesser capitalist countries.

This article might be a lengthy one but will be worth the while as it exposes the lopsided relationship of Africa and the second world states.

Trade is a phenomenon that ties the world together in a larger respect thus making a "global market". Just like humans, it is impossible for sovereign  states to be fully self-sufficient in regards to all its needs thus in a bid to satisfy this needs, sovereign states therefore come in contact with other states. This relationship may take different forms. Sovereign States thus trades with other states or requests for loans in carrying out certain projects. This we would say is a natural phenomenon of interrelation but it has long been manipulated. A party, (Africa) allows the subjugated one at the closure of each trade suffers a trade deficit or runs into debt crisis due to 'floating rate'.

Africa and other States were colonized in the nineteenth/twentieth century. Formally it started after the regions in Africa were partitioned by the European colonist in Berlin Germany 1884/5( Berlin conference). This period saw the extreme exploitation of Africa; according to Claude Ake, "we were made to produce what we don't eat and eat what we don't produce. The African natives were forced to sell their produce due to lack of industries at very cheap prices and later bought them( finished stage) at higher prices. The establishment of local industries was not promoted. The economy was taken over by the Europeans who according to Walter Rodney had monopoly of knowledge of the 'international trade'. Africa was thus forced into the capitalist system without knowledge of the system.  During post world war II, Africans began agitating  for self government. From the year 1951( Libya) African countries began gaining independence but one would think the exploitation would have ended there. The Europeans could not leave the African economy alone thus created a new form of colonisation known as 'neocolonialism'. This form of colonialism did not take the direct one as before but employed different means such as the use of Multinational Companies, Loans and also Aid in the exploitation of this African States. The Europeans successfully created a form of dependency for the African continent upon European goods and also the finishing of African raw materials. Following the trend from colonisation, African countries lacked industries and only engaged in primary materials (Raw materials) which price was decided also by the international trade which is controlled by the Europeans.

Today, in analyzing Africa's  contemporary economic dependence  position, it could be observed that with  the current global economic crisis and economic advancement  of some  countries previously perceived to be  underdeveloped, there is a shift in Africa's dependency pattern or loyalty.  Countries such as China, Brazil and even Singapore have become  integral components economies which  Africa seems to depend on for some  form of survival. This dependency which is not different from the immediate post-colonial experience has same effect for the continent (Underdevelopment). To drive this home, this paper would will identify certain dependent relationships of Africa and these countries.

In Nigeria alone Sino-Nigeria trade is  expanding, as well as assuring economic  and political ties. The volume of trade  between Nigeria and China in 2010 reached 7.5 billion U.S  dollars while  Nigeria maintains the position of the  fourth trade partner of China in Africa  and second exporter market in the continent(Okoh, 2011). By November 2010, the total contract investment by  China in Nigeria reached 13.3 billion US  dollars of which most investment was  concentrated  in the oil and gas sector  (Williams,2011). Since the early 2000s,  the  number  of Chinese  multi-national  corporations investing/working  in  Nigeria has increased with  this  geometric leap in bi-lateral trade  volume. To  guarantee these economic benefits, Nigeria acceded to China’s  “One China Policy”which has always  been the pre-requisite of Chinese  engagement with other countries.
Recently, China borrowed certain corrupt regimes in Africa ( Knowingly, hiding under the noninterference policy) money to carry out certain developmental programs and as identified by Alexander Sack 'the odious debt', this money has been misappropriated; being channelled to certain tribes thus the reason for borrowing such money won't be accomplished and yet, a debt crisis would occur. A major element of imperialism is putting the language of a country in another. During the fashola administration, he wanted to introduce the Chinese language in Lagos state government schools because money was borrowed to the Lagos government.

More recently is the Two(2) billon dollars China is planning to borrow The Federal Republic of Nigeria in yuan ( the Chinese currency). This is another form of imperialism; a device of devaluing our naira more and creating a dependency on the yuan for trade with China. The amazing thing here is that China is placing Nigeria under a condition, that is all materials needed for the project to be undertaken will be purchased from China and according to governor Fayose of Ekiti in his letter to the Chinese government of recent, the country's debt burden would increase and the implication of this is a 'increasing floating rate' and a ridiculously compound interest that the country would then need a debt relief to pay back at the end of day.  What we should know also is that China is devaluing her currency intentionally in order to gain favourable market for the African states. It is predicted that the Chinese currency may appreciate against the dollar in the near future thus creating a problem for African countries that borrowed money; implication of this can be linked to the 'petrodollar recycling of 1970s'.

The African community needs to begin a futuristic/predictive inquiries based on their historical mistakes using experimental inquiries to know the implications and then try to avoid it. The pattern should be studied by political scientists and economist in order for the States to notice this trend immediately. Neocolonialism would continue to rain in Africa until her leaders become credible and her economy become less mono-cultural, establishing industries for every primary product a country naturally has and can import. Existing industries should be enlarged in order to produce more output and also trade internationally at an advantageous point.

Gbadegesin Onyekachukwu John, a student of Olabisi Onabanjo University Department of Political Science.