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Foreign Aid in Sub-Saharan Africa

Foreign Aid in sub-Saharan Africa
In recent decades there has been a debate regarding the importance of foreign aid in sub-Saharan Africa. Some have argued that foreign aid is not beneficial to developing countries, as it creates a dependence upon aid, rather than fostering growth. Empirical data does not support this view, which reveals that while there is much work necessary in developing countries, foreign aid has stimulated economic growth and positive results in the battle against poverty. The amount the United States spends on foreign aid represents a minuscule fraction of the federal budget, despite compelling evidence that foreign aid is mutually beneficial, serving the interests of the United States and other modern countries, as well as those of developing nations. One cannot overstate the importance of foreign aid in sub-Saharan Africa, and if anything, countries could benefit others by stepping it up.

Benefits of Foreign Aid

Foreign aid is useful for fostering economic development in impoverished nations. In 2015, a study that the University of Western Australia conducted concluded that foreign aid had a significant and long-term positive impact on GDP growth in the 25 countries it examined. It also found that economic growth in sub-Saharan Africa directly correlated with the increase in foreign aid from 1970 to 2012. Additionally, countries that received the largest amount of foreign aid also displayed the greatest amount of economic growth.

Foreign aid is also crucial for providing humanitarian aid and ameliorating suffering. In sub-Saharan Africa, the focus of foreign aid is often to reduce poverty and provide food. A 10-year case study that the Global Development Network conducted showed that Overseas Development Assistance (ODA) in Kenya had positive results on poverty reduction in the country between 1999 and 2009. The Global Development Network also found that foreign aid most largely benefits the poorest of the poor, who are most desperately in need of humanitarian aid.

US Involvement

The United States could benefit from increasing its contribution to foreign aid for sub-Saharan Africa. An increase in the budget allocated towards foreign aid would not carry any substantial financial burden, as the portion of the federal budget that the U.S. currently spends on foreign aid totals at less than one-fifth of 1 percent. Sub-Saharan Africa itself accounts for only about one-third of that minuscule amount. While the costs of increasing foreign aid to the country are insignificant, there are potentially heavy costs that one can associate with inaction. Poverty and state failure in Africa can lead to refugee crises and terrorist havens, which may pose a threat to the United States’ national security. Additionally, the provision of foreign aid cultivates favorable views of the United States worldwide. As a result of aid from other countries, sub-Saharan Africa perceives the United States very positively, as 80 percent of respondents report a positive view of the country. The potential benefits, coupled with insignificant costs show how the importance of foreign aid in sub-Saharan Africa extends also to the United States and other developed nations.

Following World War II, foreign aid to developing countries became a commonplace practice among wealthy nations. Foreign aid has been a successful strategy for promoting economic growth and lifting millions out of poverty in sub-Saharan Africa. Given the importance of foreign aid in sub-Saharan Africa, such aid programs should continue, and even expand.

– Karl Haider
Photo: Wikipedia Commons