This week’s Spectator cover story asks ‘Does aid do more harm than good?’ But there is absolutely no doubt in my mind that aid does ‘more good’ than ‘harm’.
Much of Harriet Sergeant’s dilemma seems to be fueled by an angst ridden reading of the book Dead Aid, by Zambian economist Dambisa Moyo. As someone who was working at the Department for International Development in 2009 when the book was first published, I have some sympathy for the sentiment. But there is no doubt in my mind that an argument advanced almost a decade ago has now been thoroughly debunked.
In particular, Sergeant rightly argues that what Africa needs is jobs, and she quotes Moyo saying “aid has never created a single job”. As someone who spent the last few years working with job creation and economic development programmes across Eastern and Southern Africa, I can testify that even if that were once true, it certainly isn’t any more.
In Zambia, I saw Zanaco bank partnering with a UK aid funded local programme to reorient its business model to provide financial services to small businesses and the rural poor. In a country without a credit bureau, where hardly anyone has a credit history and credit scores can’t be calculated, banks don’t lend and businesses can’t grow. But UK aid is changing that.
In Ethiopia, I saw factories full of women in their twenties making clothes for foreign textile firms that would be exported to Europe, America and Asia. These women were born into rural poverty but came to the city to work in one of 14 new factories in the first of a dozen industrial parks planned by the Ethiopian government. But there’s a problem. Companies can’t find enough workers who are ‘employment ready’, and when young women move out from their mother’s home in the village, they struggle to stay active in the labour market or find appropriate childcare in the big city. But UK aid is changing that.
“In Uganda, I saw capital market development. In Mozambique, I saw digital financial service innovation delivered by local Fintech start-ups. In Rwanda, I saw… You get the point. All funded by UK aid.”
In Kenya, I met teenagers living in urban slums and getting by on less than £2 a day. In a country where the World Bank says that the economy can only create enough formal salaried jobs for between 6-7% of the young people who join the labour market every year, the solution is what they call ‘hustling’. Patching a livelihood together through adaptation, aspiration and perspiration; Kenya’s youth have no welfare state to rely on and no safety net to catch them. They get on their bike or jump on a matatu: Norman Tebbit would be proud. They are on their own, buying and selling in the informal economy, doing the most flexible of flexible work, vulnerable to exploitation and tempted by crime. So who is there to keep them on the straight and narrow, teach them entrepreneurial life skills and protect them from unplanned pregnancies? That’s right, it’s UK aid.
In Uganda, I saw capital market development. In Mozambique, I saw digital financial service innovation delivered by local fintech start-ups. In Rwanda, I saw… You get the point. All funded by UK aid.
Yes, Africa needs jobs. Africa’s population will double by 2050 and the urban population will triple. And African economies can’t create enough jobs without aid because even a rising economic tide will not lift all boats. Inequality is their existential threat. When I worked at DFID we published the first White Paper focused on economic growth. Since then, DFID has more than doubled the aid they invest in boosting economic development in the developing world. I’ve got reservations about some of the ways they are doing it but I’d expect most Spectator readers will love it. If only they knew what the government was really spending their taxes on.
Richard Darlington was Special Adviser to Douglas Alexander at DFID from 2008-2010