The usefulness of foreign aid is often measured in terms of its capability to motivate economic growth, but it has turn out to be more and more clear that economic growth is largely unaffected by foreign aid investments in developing countries due to mismanagement and corruption. This claim is supported by the uncountable observed studies that have influence failures of foreign aid support to developing countries. Money from rich countries has trapped many developing nations in a cycle of corruption, slower economic growth and poverty.
Nima, is one of the largest slums in Africa. This suburb of Accra, the capital of Ghana, is home to more than one million people, who make a living in an area of about one square mile. By my estimate, the place is roughly 70% the size of Washington DC South East area. The place is a sea of aluminum, stagnant water breeding mosquitos, and cardboard shacks that forgotten families call home. The idea of a slum raises an image of children playing amidst piles of garbage, with no running water and the rank, and common disgusting odor of sewage.
Do developing countries really need foreign aid? What is incredibly disappointing is the fact that just a few yards from Nima stands the Presidential Castle, the Osu Castle, which points out that leaders of the country are aware of the ongoing situation but have not done much to help. Nima embitters in Ghana, a country that has one of the highest ratios of development workers per capita in Africa should do better.
Giving foreign aid to developing countries has proven to be one of the biggest ideas of our time: millions march for it, governments are adjudicated by it, and celebrities preach the need for it. Demands for more aid to developing countries are mounting louder, with supporters pushing for doubling the roughly $50 billion of international assistance that already goes each year.
Evidence tremendously shows that help to developing countries has made them poorer, and the growth slower. The deceptive aid culture has left developing countries more debt-laden, more inflation susceptible to, more vulnerable to the vagaries of the currency market and more unattractive to higher quality savings. This increases the risk of civil conflict and unrest, for instance in the sub-Saharan Africa’s population where 60% is under the age of 24 with few economic views, it is a cause for worry. Aid is an unalloyed political, economic, and humanitarian disaster.
Over the past 60 years at least $1 trillion of development-related aid has been transferred from rich countries to Africa alone. Yet developing countries in Africa real per capita income today is lower than it was in the 1970s, and more than 50% of the population – over 350 million people – live on less than a dollar a day, a figure that has nearly doubled in two decades (n.d.). Developing countries become trapped in debt even after the very aggressive debt-relief campaigns and efforts offered to them. Ghana still pays close to $20 billion in debt repayments per annum, a stark reminder that aid is not free. In order to keep the system going, debts is repaid at the expense of poor country’s education and health care. I believe that well-intentioned calls to cancel debt mean minute when the annulment is met with the fresh infusion of assistance and the cruel starts up once again.