Monday, June 27, 2005

Told'ja so, part 36* 

Willie Sutton could have learned from the rulers of Nigeria.

The scale of the task facing Tony Blair in his drive to help Africa was laid bare yesterday when it emerged that Nigeria's past rulers stole or misused �220 billion.

That is as much as all the western aid given to Africa in almost four decades. The looting of Africa's most populous country amounted to a sum equivalent to 300 years of British aid for the continent.

Not to pick too much at my NARN brother Captain Ed, but I believe I get a 'toldja' for this one. Instead, while admitting this is a problem, Ed still thinks the problem is ours.

The Nigerian scam shows the absolute necessity of on-the-ground verification of aid distribution and a requirement for the positive political reform that will make future aid unnecessary, not just for Nigeria but for all African aid. It also demonstrates that Africa's problems aren't due to Western neglect, although Western exploitation certainly didn't do anything to help. The reason why an entire continent can't feed, clothe, or shelter itself is because of the political corruption that Western aid ironically enabled. It doesn't absolve us of our need to get Africa on its feet now, but it does demonstrate that just throwing money at the poorest continent won't do anything but make the situation worse.

McQ links to an interview of Jeff Sachs, noted debt relief tout, and George Ayittey, a Ghanaian who thinks there's a real problem here that debt relief is not going to help. Ayittey says,

The big elephant in the room is African governments. Africa has been totally mismanaged and misruled in the past decade, but nobody wants to talk about that because of political correctness. Africa's begging bowl leaks horribly. As a matter of fact, the African Union itself estimated that every year corruption alone costs Africa $148 billion. If African leaders could cut that in half, they'll find more money than what Tony Blair is trying to raise for them.

But in the past we entrusted money to the government sector and the government sector simply did not spend the money wisely. And that is why we need reforms, but the government sector is not being reformed. So in the meantime, people are dying. We want to save the people especially those, the children who are dying of malaria. If there's a way by which we a matter of fact, if we can get to the people directly rather than passing through these corrupt governments, it would be better for the people.

And that is the problem -- how do you as a government bypass the governments of Africa to get aid to people? And more importantly, how do you fix corrupt governments like Nigeria's? What's to say they won't do it again?

In context: Corruption may have cost Nigeria $400 billion. Current external debt of Nigeria is about $34 billion. Nigerian proven crude oil reserves: 33 billion barrels. They are not bankrupt by any stretch, and they aren't poor. Most of the $400 billion stolen is siphoned oil money. Maybe rather than pay off the debt, we should just collect 2 billion barrels as collateral and call it even.

For further reading: New non-technical report from the IMF: Can Debt Relief Boost Growth in Poor Countries?

*...of a damn long list. I'm smarter than you think.