By Bob Geldof, Special to CNN
Editor’s note: Bob Geldof is a member of the Africa Progress Panel, chaired by Kofi Annan, and a musician, businessman and campaigner against poverty. The views expressed are his own.
With the U.K. becoming the first G-8 country to spend 0.7 percent of its gross national income on overseas aid, the government’s recent budget was an exciting moment for the international development community.
But with extreme poverty falling all around Africa, and the continent’s mineral resources providing more revenue now than international aid, some observers are asking whether international aid is out of date.
Africa needs trade, not aid, they say. In truth, however, they still need both.
Africa has the world’s fastest growing population, expanding by more than 20 million every year, and must create jobs fast to keep its unemployment rate from rising. Some analysts highlight the Middle East, where failure to generate enough jobs for young, urbanized populations had catastrophic consequences for political and economic stability.
Trade – in its broadest sense – will create the jobs that Africa so badly needs. So Africa’s leaders must identify and nurture labor-intensive industries such as agriculture, manufacturing, and hospitality in order to create more jobs.
It can be done.
When Mali’s government built infrastructure (including refrigeration) to deliver mangos from landlocked Africa to Europe, transport times dropped from 25 days to as little as 12 days, while mango exports increased more than 1,000 percent over 15 years, the World Bank has noted. The success brought jobs and income for Malian farmers, and set an excellent example for African agriculture, which accounts for more than half of the continent’s workforce.
More from CNN: U.S. aid on chopping block
Similarly, according to the World Bank, when Cape Verde offered tax breaks to foreign investors, tourism revenues climbed to about $540 million in 2008, from $23 million less than a decade earlier, and the sector now accounts for 21 percent of the country’s workforce.
In Nigeria, meanwhile, the deregulation of the telecoms sector generated an estimated three million jobs, as private sector enterprise thrived in the absence of state monopoly.
I’m so convinced by the need for trade, by the way, that I launched my “8 Miles" African equity fund (named after the shortest distance between Europe and Africa) to invest in companies that provide jobs and long-term growth.
This belief in trade is entirely consistent with a profound respect for aid. I have learned that one begets the other.
The 2005 Gleneagles G-8 summit, for example, brought debt cancellation and increasing levels of aid that helped to school tens of millions of children and triggered an intellectual stampede that is propelling at least some of Africa’s rapid economic growth. Today, Africa has some of the world’s fastest growing economies and foreign investors are tripping over themselves for a slice of African profit.
Almost two dozen of Africa’s 54 nations have now reached middle income status, and more undoubtedly will do so by 2025. As noted by the World Bank’s lead economist in its Nairobi office, if sub-Saharan Africa were a single country, the World Bank would already classify it as middle-income, with an average income of more than $1,500.
But Africa, like every other continent, needs its aid.
Away from the investment analyses and high growth headlines, some 40 percent of Africa’s one billion population still live on $1.25 per day or less. And, as UNICEF notes, in 2011 some 19,000 children were still dying every day from deaths that might have been prevented with measures such as routine immunization.
“In sub-Saharan Africa, a woman faces a 1 in 39 lifetime risk of dying due to pregnancy or childbirth-related complications,” the U.N. Population Fund says. “In South-eastern Asia the risk is 1 in 290 and in developed countries, it is 1 in 3,800.”
“Bad aid” can be ineffective, it’s true. My favorite story is the construction of a giant fridge in Kenya’s remote Turkana region so that local communities could eat and sell fish from the nearby lake. Local preference for goat was one obstacle to success. Lack of electricity was the other.
But aid these days is better: less wasteful, more ambitious. Amongst many other improving stats, maternal and child mortality are coming down, backed by development aid that is focused, measured, transparent and smart.
Innovative organizations such as the GAVI Alliance use market incentives to encourage lower prices and the production of vaccines for African children. In West Africa, 100 million people have now been immunized with a new vaccine against meningitis A, a deadly disease that had previously plagued the region for more than a century.
Some may believe that aid’s primary motivation may be moral outrage. That's a good start, but its primary purpose has always been to serve practical interests too.
Last month, more than two dozen British CEOs reportedly signed a joint letter that applauded the U.K.’s commitment to overseas aid. They argue that developing countries become emerging markets, the engines of global growth, and aid contributes to this process, they said.
Imagine that very soon, Africa will be the world’s largest consumer market, bigger than India or China.
By then, traditional aid will focus more on emergencies and fragile states such as the Somalia and the Democratic Republic of Congo. Aid will transfer knowledge not money.
We’re already moving in that direction. In 2010, Global Witness reports, Africa’s oil, gas and mineral exports “were worth roughly seven times the value of its international aid,” representing enormous opportunity and risk for the continent. If used wisely, these resources could fund health, education, energy and infrastructure. If not, they could fuel corruption, conflict, and political instability.
Africa’s mineral wealth throws up a profoundly complex set of issues. If the continent is so rich, why are so many of its people so poor? How does a government manage its revenue from mineral resources without destabilizing the economy? How can the international community support the fight against corruption? How can everybody work together so that Africa’s precious – and finite – resources reach more people with jobs and opportunities? The Africa Progress Panel will suggest a set of policy options when it releases its latest report on May 10.
Trade, jobs, and opportunities remain critically important for Africa.
Aid is changing, but will stay essential for the poor of our world for a long time to come.
They will always need aid as long as Islam is present.
@Towel heads,they'll always get aid as usual from countries like us..Suckers are born every minute and there's plenty here to go around as well with companies,charitables that feed off our emotions to get money and you know these groups are big right here!!
Pete, as long as these countries continue getting aid from the U.S., Great Britain and France, their economies will never improve and will remain totally dependent on foreign aid. In fact, foreign aid is the one dependable lever they can use to control these countries and exploit their resources!
@Joseph McCarthy,most certainly right like trying to break a depend baby off the mothers shrinking teet..And we still struggling from the after effects of a failed republicans administration hell bent on bankrupting us with putting everything on the countrys credit card with two wars now costing well over 2 trillion and rising,Medicare Part D ,tax cuts for the 1% ers and 800,000 a month in the unemployed and can you say intelligently that if it weren't for us having the capability to print money 24/7 we would've been bankrupted decades ago from just the Great Depression started by republicans Hoover..Just explain to these arrogent,ignorent republicans who put us in this mess just how to get us out because they forgot when they closed the door to our countrys progress they forgot where they put the keys...So now the balls in the republicans court having almost voting in both houses unanimously for this sequester deal and now with the political noose around the republicans necks just what will they do because just how many lives do republicans think they have and if its not as many as a cats I hope but that's just wishful thinking right!!
China is taking the West's place in providing aid in Africa. Chinese build schools and other support their partners with infrastructural projects, in exchange for natural resources.
Geldof believes growth is the answer to poverty, but without growth there wouldn't have been poverty in the first place, only people living their lives. In order to grow, you have to monetise something which used to be free. And in order to have a market, you have to make it scarce. That's why growth causes more poverty than it cures, and why Geldof should to back to making music.
Are you saying that communes are the only answer? because otherwise your statement makes little to no sense.
When there is a drought, and your source of income dies (livestock) and your food does not grow (crops). So you have to buy food to replace it, money that would otherwise go towards something like sending your kids to school.
So if aid provides for education and allows it continue, providing a future for the next generation instead of being stuck in the same subsistance cycle, how does that fit into your theory?
I don't agree with everything Mr. Geldof proposes, but my guess is he knows about a gazillion times more about realities in Africa than you do.
Matslats, that is nonsense. You create wealth by charging a profit for a product or service someone values and is willing to pay for.
In order to grow you have to monetizing something that use to be free? Really? How did an Apple iPhone monetize something that use to be free? Or are you saying Apple never grew?
Just like the story of Haiti-everyone is meddling to create sweat shops and dependancy. Now , with Chinese influence rising maybe things will change.
Such nonsense in above article " fast growing population will require more trade " ????? How about having fewer children like in China, one child per family, so that they can be lifted from poverty on the Chinese model which made Communist China our banker ? Did anyone suggested that ?
Nigeria is very, very rich , so rich that they do not seem to know what to do with it all. How about Nigeria helping instead of bankrupt US ?
Now that's a great idea you have there, rightospeak. Do let Nigeria help the other countries in Africa instead of us who need to borrow money from China in order to keep our national economy afloat! Try selling that to the right-wing thugs in Washington! They'll never buy that idea!
Since St. Bob is known for avoiding all taxes possible, including the taxes he advocates all of us around the world happily give up in aid to Africa, forgive me if I tell him to go away and pound sand. We have enough of pampered rich people trying to feel good by "do as a I say, not as I do".
Africa contributed its Major natural resources to the entire World, and still its continue to do so. But, the Media shows only, what is given to Africa, by hiding what is taken from Africa.
More Weapons has been given to Africa, than food aid.
Even the food aid, never been delivered properly, to the needy.
In the Year 1974 and after that, the Media showed the Famine in Ethiopia. But, the Media hidden the causes and the outdated food aid.
As we know, Monsanto/GMO supplied DDT to be sprayed in Ethiopian Farms and this insectcide affected the soil and crops.
The food aid was soaked with uranium usages and it did caused Millions of immediate and slow deaths. Remember; the Yellow cake or Fava Milk.
However, many thanks to the Great Britain, who helped Ethiopia during the Fascist Italy era. At that time, the British Air-Force chased and knocked down the Fascist Italy's Air-Force, while we got them(Italians) on the ground one by one and by mass, that we turned them in to the dustbins. Most of Italian hostages were served as TRUE SLAVES for Ethiopians. Still now, it gives unrest to some Italian Children, how the WHITE BECOMES SLAVE, by ABYSSINIAN.
Mr. Geldof, thanks for your help.
african leader-thieves, western puppets will get aid.
the citizens will get aids and other diseases and war and poverty and misery and robbed.
the thug thieves giving aid: usa, europe.
have kagame and museveni on your program.
let us have another look at theiving mass murderers.
make it a day for airing mass murderers.
invite the clintons, the bushes, and obama.
of course cheney and rumsfeld.
we have so many but these will do for one show.
Well said, joe. Thank you for your input.
Why do you have to use my handle you stinking bag of feces.
Of course Africa needs trade, every economy with few exceptions in the world requires some sort of trade in order to keep their economies moving. That's not an epiphany, Africa may have the fastest growing population that doesn't change the global economy. Its still not a rosey picture in the strongest economies, strong global growth may still be two to four years away. The free market systems are going to have to find a balance, that will both keep their citizens employed at a level that can pay for the daily operations of their countries, and ensure that they don't have so many unemployed people that can destabilize the economy and the internal security within any given country. 20 years ago there was an opportunity to start changes within the G7 countries to move to a four day work week thereby increasing the employment opportunities, they missed that chance and today globally every country is suffering. Those economies struggling out of years of neglect and greed, including Africa and other economies will suffer as a result of the inaction by their leaders. If the pinch is being felt in the really big economies, how are economies just now beginning to flourish supposed to expand. The true winners of this chaos are the multi nationals, who choose to hawk their wares for the lowest bid. Its not a great time to be twenty or thirty years old. Sooner or later someone will figure out that it only takes about 10 to 20 percent of the global population to provide the needs for all the rest. That's still well over a billion people, it also means that another 5 and 1/2 billion without real gainful employment. It would be great to see Africa become a strong financially sound continent, but I think the global reality will prevent that from taking place. It will take people with a greater vision then most to understand the changes that will have to take place in order to meet the demands of 7 or 8 billion people on our planet.
Just a thought
why Africa is backward http://deley71.blogspot.com
People on this forum either have not read the article or are so racist their brains stopped working. This article clearly explains that Africa has mineral, oil, gas and other riches worth over 8 times the amount of aid they get per year. What is the main reason Africa does not receive compensation for her wealth? Imperialism, mostly European, but America and China are catching up. Sophisticated large corporations with way more resources than the countries they target, swindle their profits from tax evasion, environmental destruction, imperialist invasion and occupation and lopsided trade agreements. For example, France receives 70% of its electricity from uranium from two sister mines in Niger. France has paid way less than market value for 40 years now and irradiated this section of the country, which remains very poor and has little electricity for itself! When Niger tried to allow other countries companies to come in and put in bids than France sent in its military (who were just across the border in Mali) to kick out foreign companies and force the Malians to give away their uranium so France could have abundant and cheap electricity.
I believe Jesus would have us love our African neighbors by forcing our corporations to pay the taxes they owe. All countries deserve to be paid a fair market value for their resources.
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