An Unlikely Advocate for Free Markets in Africa?

It seems that these days everyone is ready to voice their opinion on what’s going on with poverty reduction efforts in Africa, with viewpoints fluctuating between the extremes of doubling or tripling or any other “ing” aid and abandoning aid altogether in favor of purely market solutions to poverty.  As Bono wraps up his recent tour of Africa, another heavyweight weighs in with its opinion.  ABC’s 20/20 explores the myth of aid and whether it really is the solution to poverty the continent has been looking for. 

Naturally, we like to give our views and opinions on various issues, we like it even more when people listen to what we have to say.  In the midst of quarrels over aid effectiveness, however, we forget that, perhaps, the people who are the subject of the conversation should be given a voice at the table.  And the best we can do, sometimes, is just listen.  So, in the spirit of listening to what the citizens of countries in questions have to say, here are some excerpts from the 20/20 story.

A farmer in Kenya on food aid:

“You find most of it is getting lost on the way,” farmer Joseph Nthome said. Lost, but then found … for sale in street markets.

CIPE grantee James Shikwati, director of the Inter Region Economic Network and a consultant to ABC News on this story, on the root sources of the problem:

“Kenya does not need aid to get out of poverty…What’s holding down Africans is actually the bad governments, the bad policies that make it difficult for Africans to make use of their own property,” Shikwati said. “What the aid money is doing to Africa is to subsidize the bad policies that are making Africans poor

Carpenter Richard Kadivane on government’s powers to hold businesses in fear: 

“If you gave aid money,” Arunga asked. “How does that solve the problem of the government razing down people’s businesses?”

I’ve brought up the problems of opening and registering a business as a barrier to people’s ability to lift themselves out of poverty on several occasions in this blog, referencing the World Bank’s Doing Business reports.  The issue comes up in the ABC report as well.  

In 1999, I went to Hong Kong and in one day, with one form, I got legal permission to open a shop.

The next day “Stossel Enterprises” was open for business, selling ABC trinkets. By contrast, to open a legal business in Kenya you might have to get licenses from 20 ministries and you may have to bribe people. It can take years, and the government can still shut you down.

Even Bono brings up the point that aid often does not reach its intended recipients:

Oddly enough, it is the activists here on the continent of Africa who are doubly hard on this point. We have to listen to them. They are saying, do not invest in our countries while we have crooked leadership. They’re saying it and I think we have to listen to them. That is hard. That is depressing.

Although Bono continues to call for more aid, in his blog I saw flashes of recognition that enterprise development, trade, governance, and corruption issues must also be addressed.  Will Bono become a part-time advocate for free markets in Africa?  Or am I being too optimistic?

Published Date: May 26, 2006