Reliance on aid to guarantee our dignity through Millennium Development Goals was a huge mistake, writes Archbishop Njongo Ndungane; and raising more funds to bridge Africa’s resource gap without stopping the outflow of cash and smart money is like pouring water into a bucket full of holes.
In September 2000, the world's Heads of State and Government adopted the UN Millennium Declaration. Subsequent to the Declaration numerous international agreements and commitments were made to increase aid and provide debt relief in order to speed up the implementation of the MDGs. African Monitor has been tracking the performance on these commitments through the issuance of an annual Development Support Monitor (DSM). 2010 DSM has just been published and highlights the following regarding the prospects for the attainment of the MDGs:
Firstly, delivery on aid commitments have recorded a steady increase from 2004 through 2009. While it is a positive trend, it has created a tendency to focus more on aid in terms of the resources needed for the realisation of the MDGs than on the other sources. The recent global crises have come as a rude shock to remind us that this was a distortion and huge mistake. While this is worrying, it is also timely and calls us to pay the due attention to the other side of the resource coin.
The DSM implores the continent to take its eyes beyond aid to the real resources that Africa is richly endowed with.
Firstly, its people. By sheer numbers, the continent should be leading in global economic recovery and growth. The continent has close to a billion people, the majority of whom are in the young and productive age group. They are hard-working women and energetic youth in their prime. Entrepreneurs from outside the continent view this with glee as "a huge market opportunity" for export of their products. As Africans we need to see this as a huge resource for the realisation of the MDGs - within our own continent we have the human capacity to secure our own dignity.
Unfortunately, investment prioritisation of this incredible resource is not always commensurate with the opportunities it presents. A recent study commissioned by African Monitor for SADC has noted that while there seems to be support for investment in the productive sector, the share of allocation to sectoral programs directly linked to MDGs such as agriculture, nutrition, health, gender equality and youth employment is low. Take HIV/AIDS as an example. While an estimated 40% of the world's people affected by HIV/AIDS live in SADC, an allocation of only 1.9% of the aid package goes to HIV/AIDS - related programmes.
The UN Secretary General was recently quoted as saying "let us invest in women. This is where we need progress the most.... until women and girls are liberated, poverty and injustice and all that goes with it such as peace, security and sustainable development stand in jeopardy." Again, investments to these sections of society are not commensurate to the need.
The second rich resource we have is our mainstay economy. Almost without exception more than 70 percent of African people live in rural areas and get their livelihoods from smallholder farming and activities in what is commonly known as the informal sector.
The SMEs have significant growth potential to help create a rising middle class but face government-imposed obstacles that make one wonder where the priorities of our governments lie. They face red-tape and high compliance costs, and lack access to finance and markets, because we prefer to import and consume what we do not produce. If we are to become more serious about securing our people's dignity, the other name for MDGs, we must prioritize the already vibrant and resilient mainstay aspects of the economy – the smallholder farming and informal activities that sustain millions.
The 2010 Development Support Monitor (DSM) and Citizens Consultation on Africa's Development Agenda 2010 and Beyond, another African Monitor report chronicle ordinary people's voices - their analysis, aspirations, hopes, expectations, and determinations.
The findings indicate two things; firstly that Africa is not in a hopeless situation. Five major causes of hope and excitement about Africa were identified through Citizen's Consultations, in stark contrast to the doom, gloom and disaster that is beamed into and out of Africa on a constant basis.
Some of these include the creativity, wisdom, and ingenuity among African communities in their fight against poverty. Africa had and still has cultural values and knowledge in science, medicine, technology and agriculture, which can be used for the development of the continent. We have not valued them adequately and as a result we think that we can only survive by begging from those we helped to develop.
As an African saying goes "it is ignorance that makes the chicken go to bed hungry while sitting in the bucket of corn". Worse still, those values and knowledge are being lost to successive generations, because there is no systematic way of passing them on, while the education curricula used in our system is undermining these very treasures.
Our third real resource is the triple contributions of the Diaspora. The two reports cite the enormous contribution that the African Diaspora is making to the transformation of the continent. To date the Diaspora is known for its remittances, which are enormous, having reached US$40billion in 2008, surpassing official development assistance and foreign direct investment.
Beyond this, the reports highlight the skills and technological as well as the entrepreneurial and institution building contributions the Diaspora are making. "Just like as it has happened in India and China," the Citizen Consultation report argues, "African Diaspora is already beginning to play leading roles in transforming Africa. Significant numbers of highly skilled professionals from the Diaspora are taking the advantage of the economic growth and infrastructural upgrades to start business in high growth African economies".
These entrepreneurs are promoting a new culture of private sector innovation that is reinvigorating African economies and entrenching positive social capital conducive to democracy and civility. This has not been the business of guest commercial entities. To realize the twin aspirations of development and good governance, we should create the enabling environment to attract back African entrepreneurs and capital in the Diaspora.
Working against the efficient utilization of these resources is the reverse flow of money out of the continent. I am horrified by the statistics in the our 2010 DSM which show that in addition to exporting value in the form of primary commodities, up to today the resources in cash and smart money leaving the continent far outstrip those coming in. This thorny issue is conveniently often less discussed.
Africa is haemorrhaging with a severity which may be the primary cause for the continent's failure to make sufficient progress in reducing poverty and meeting the MDGs. Other causes, such as donors' broken promises, are important but surely they are only secondary. Raising more funds to bridge the resource gap without closing the leaking tap of reverse flows is like pouring water into a bucket full of holes.
Of course some of this outflow is legitimate - business and rich people taking their money out in order to manage risk, for example. However, the bulk of the loss is illicit – individuals and large corporations, in particular using illegal invoicing to conceal profits or evade taxes, facilitated and maintained by the presence of tax havens in rich countries where secrecy prevails.
The volume of the resources we are losing is staggering and on an upward trend. Attend to this and we are on the trajectory to the full realisation of MDGs.
Archbishop Ndungane is President and Founder of African Monitor and the article is based on two recently published reports on Making MDGs attainable and their outcomes sustainable. For more information, please contact African Monitor on +27 217132802; firstname.lastname@example.org