The road to independence: is aid the future for African development?


 Young entrepreneurs say that aid is creating dependence and preventing economic growth in Africa and the only way forward is for Africans to take the lead in their own development


by Odharnait Ansbro


Derrydean Dadzie is not the poster child you’d expect to see for Africa. The 82-born Ghanaian is the CEO of software development company DreamOval. He studied Computer Science at Ashesi, a university set up in Accra by a Ghanaian businessman, Patrick Awuah. Awuah became a millionaire working at Microsoft and set up Ashesi to teach entrepreneurship and leadership to young people from West Africa . In his final year of college Dadzie and three friend decided to set up DreamOval. “We asked ourselves…What was the future going to be about? And how could we win it?” says Dadzie.
The answer was to design software solutions to everyday problems in Ghana. In 2009, DreamOval was commissioned by the Grameen Foundation, an American organisation working in the developing world, for a project to improve access to healthcare for pregnant mothers in rural Ghana. DreamOval designed an application that allows community health nurses to access mothers’ medical records from their mobile phones. The nurses can now provide antenatal care to mothers in their own homes.Dadzie is part of Africa’s emerging class of young entrepreneurs who are presenting a serious challenge to Western ideas of African economic development. They believe Africa should no longer be seen as a continent of poverty, conflict and corruption that can only be helped by foreign aid. International institutions, Western governments and NGOsare united in their calls for more aid to Africa to fund economic growth and development. But after over 50 years and $2.3 trillion in aid, poverty in Africa has increased while economic growth has decreased. A growing number of dissenters say aid has fostered a culture of dependency that is killing African initiative and economic growth. Are they right? Could efforts to help Africa actually be hindering it?Ties that bindOfficial aid from rich countries usually has strict conditions that set out how poor countries should run their economies, public services, and societies. These rules are supposed to ensure that money is well spent, produces results and is not frittered away by corrupt governments. “It makes sense, you want the money to be used well, but practically speaking this means there isn’t really a focus on what Africans could do for themselves and what can be achieved on the ground”, says Joseph Luna, a Harvard researcher currently working in Ghana.Development economists like Joseph Stiglitz, former head of the World Bank, say there is no evidence that conditions work. He blames the decline in economic growth in Africa from the 1980s to the 1990s on the cocktail of privatisation and liberalisation imposed by the International Monetary Fund as a ‘one size fits all’ solution. Often conditions actually serve the interests of Western economies, with aid tied to the purchase goods and services from Western countries and African governments forced to take measures that undermine their national industries.

Donor governments have recognised that aid has not led to sustained economic growth but their answer is ‘more and better aid’. On World Poverty Day, April 18th 2010, Gordon Brown said “We must…focus more on the empowerment of people and countries through their equitable and sustainable growth”. But he believes the key to achieving this is the agreement of a $200 billion aid package at a UN summit on development in New York this September. The UK government says that in recent years it has untied aid and led efforts to secure support for an International Aid Transparency initiative to increase its the effectiveness. But are more Western led initiatives the answer?

The role of remittances

Elvina Quaison works for Afford, a charity set up in 1994 by Africans living in the UK to promote African development through entrepreneurship. She believes there is a role for aid in development but not at the expense of African initiative and autonomy. She says that Western approaches to African development, with their focus on aid, tend to ignore the important role played by the African diaspora in promoting economic growth through remittances. “I think a culture of dependence has developed, where we believe we need aid in Africa. But if we look at the importance of remittances it becomes clear that it’s possible for people from the country to develop themselves” she says. “They [the disaspora] are doing so much work that’s not highlighted, so the story of Africa and what it means to be African is one of people not able to help themselves and reliant on outside aid when that’s not actually the reality.”

The latest World Bank estimates show that remittances to developing countries amounted to $316 billion in 2009. African governments have recognised the huge potential of this source of finance and are coming up with ways of harnessing it. Both the Rwandan and Ghanaian governments have established ‘diaspora bonds’, where remittances are invested and the profits are spent on social development projects. “Like any other bond you would invest in, it’s a business. But it’s a social business, so you’re giving something and getting something back”, says Quaison.

The road ahead

Dadzie says the future for Africa is “amazingly bright”. He believes developing new technology is essential to fuelling economic growth and wants to see DreamOval software applications on every mobile phone in the world. Could DreamOval be a blueprint for the future? “It comes,” he says, “from the idea that people with different backgrounds and skills can come together as equals to achieve their dreams. It’s like in an oval-shaped football stadium where everyone is on different sides but they can all see the pitch.”