Does Africa Need FDIs
Introduction
There is no denying that for the poorest countries in the world, aid (Oversees Development Assistance – ODA) is one of the best tools for economic growth. It is my opinion however that aid in developing countries often comes with too many strings attached. Case and point the issue of aid and homosexuality in Uganda. When Yoweri Museveni officially made homosexuality illegally in Uganda, the developed countries threatened to withhold aid from the country. The unfortunate thing is that in most of the cases, such a reaction negatively impacts the poorest who have not even contributed to the President’s decision. And such is the nature of foreign aid to Africa, it is the poor who so desperately need it, yet they are powerless in influencing policy around how aid should be administered.
This essay aims to evaluate the debate surrounding the effectiveness of aid in developing countries. I will briefly to compare Foreign Aid to Africa to the Marshall Plan (MP) that was provided to Western Europe after World War. I will also examine some of the exiting literature both for and against foreign aid as a catalyst for economic growth in Sub-Saharan Africa (SSA). Donors have provided aid for the same programmes in Africa repeatedly. In his article, Sebutsoe (2012) points out that African Governments expenditure is dominated by recurrent expenditure and research has shown that recurrent expenditure does not contribute to economic growth. What is this foreign Aid and where does it come from? Foreign aid comes in many guises, but the most prominent is development assistance, which developed economies disburse to poorer economies to promote economic and social development and is measured by the Development Assistance Committee (DAC) of the Organisation for Economic Co-operation and Development (OECD). The general long-run objective of development aid is the alleviation of poverty and promotion of welfare in low- and middle-income countries through budgetary
There is no denying that for the poorest countries in the world, aid (Oversees Development Assistance – ODA) is one of the best tools for economic growth. It is my opinion however that aid in developing countries often comes with too many strings attached. Case and point the issue of aid and homosexuality in Uganda. When Yoweri Museveni officially made homosexuality illegally in Uganda, the developed countries threatened to withhold aid from the country. The unfortunate thing is that in most of the cases, such a reaction negatively impacts the poorest who have not even contributed to the President’s decision. And such is the nature of foreign aid to Africa, it is the poor who so desperately need it, yet they are powerless in influencing policy around how aid should be administered.
This essay aims to evaluate the debate surrounding the effectiveness of aid in developing countries. I will briefly to compare Foreign Aid to Africa to the Marshall Plan (MP) that was provided to Western Europe after World War. I will also examine some of the exiting literature both for and against foreign aid as a catalyst for economic growth in Sub-Saharan Africa (SSA). Donors have provided aid for the same programmes in Africa repeatedly. In his article, Sebutsoe (2012) points out that African Governments expenditure is dominated by recurrent expenditure and research has shown that recurrent expenditure does not contribute to economic growth. What is this foreign Aid and where does it come from? Foreign aid comes in many guises, but the most prominent is development assistance, which developed economies disburse to poorer economies to promote economic and social development and is measured by the Development Assistance Committee (DAC) of the Organisation for Economic Co-operation and Development (OECD). The general long-run objective of development aid is the alleviation of poverty and promotion of welfare in low- and middle-income countries through budgetary
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