The Irish government intends to increase foreign aid even though current spending is massive for a small country like Ireland at € 742 million per year. Most of the media and politicians do not seem to care that the problems in places like Africa are complex and cannot be solved by yet more foreign money. The Irish government have long held a simple maxim - if there's a problem, throw more money at it (see our health sector), rather than attempting to understand the root causes and build solutions from there. Recently, African leaders have highlighted some of these root causes but only Dublin politician Maureen O'Sullivan dared to raise them in the Irish parliament :
At a recent event in Dublin, the Rwandan ambassador made the point that $63 billion in illicit flows leaves the developing world. That is more than the foreign direct investment and aid going into those developing countries. Policy coherence would mean Ireland taking meaningful steps on tax justice. The Tánaiste may say that we got rid of the single malt, which is positive but it does not go far enough. What was needed was to take the steps the BEPS process has designed to tackle the underlying problem and prevent replacement structures emerging.
The policy incoherence is also seen in trade treaties in the imbalance between what the developed country gains and the minor gains for the developing world. For example, the Ireland-Ghana tax treaty prevents Ghana taxing the capital gains of mines, factories and large businesses owned by Irish companies. No spillover analysis was done prior to the treaty, which allowed for that and other examples of unfairness [link].
The President of Ghana, a country with some of the best farming and mineral resources in the world, recently told Macron that he wanted to move Africa away from being a dependent nation - "beyond aid". For President Akufo-Addo, the loss of Africa's best youth to Europe is something to mourn, not something that should be celebrated and encouraged, which seems to be the attitude of NGOs in Europe.
https://www.youtube.com/watch?v=ZQcCk6x56QE
Why aren't governments listening to African leaders ? Well for a start there are the financial incentives in maintaining the foreign aid industry rather than helping to fix the underlying problems. Irish NGOs receive €5.5 billion per year from the Irish taxpayer. The tax treaties are benefiting Irish companies operating in Africa. What of cocoa, one of Africa's largest raw material exports ? Europe dominates the worldwide chocolate market. It is Europe's top processed crop export and Europe is also the world's largest producer and exporter of chocolate. While Africa exports the vast majority of cocoa beans to Europe, it's share of global chocolate exports is less than 1%. There is significant room to increase chocolate production in Africa, could the foreign aid money be used to help local entrepreneurs there? Imagine Ireland's economy without the food production industry and we can begin to understand the challenges facing Africa.
There is a long way to go to make Africa go "beyond aid", but it requires new thinking, rather than the old outdated aid industry, to fix it.
