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Dr. George Ayittey testifies before


The Senate of Canada's Committee on Foreign Affairs On Bill C-293 -- An Act regarding The Provision of Development Assistance Abroad, Sponsored by John McKay

George B.N. Ayittey, Ph.D.
Distinguished Economist,
American University,

Washington, DC 20016
June 13, 2007.

I would like to thank members of the Senate's Standing Committee on Foreign Affairs for the opportunity to testify on this Bill – an invitation I will never receive from any African government or parliament.

My own position on foreign aid is that while it is noble to help the poor in Africa, the whole aid business has been turned into the theater of the absurd with the blind leading the clueless. The fact of the matter is this: The aid resources Africa desperately needs can be found in Africa itself. Its begging bowl leaks horribly.

The amount of foreign aid from all sources that flows into the bowl every year is about $25 billion. But there are massive leakages. According to the African Union, corruption alone costs Africa $148 billion a year. Capital flight out of Africa is estimated at $50 billion a year.

In fact, the World Bank estimates that 40 percent of the wealth created in Africa is invested outside the continent. At least $15 billion is spent by African governments on arms imports and the maintenance of the military, which instead of protecting the people has turned its guns on them. Somalia, Rwanda, Burundi, Zaire, Liberia, Sierra Leone, Ivory Coast, Togo and Nigeria have all been ruined by military regimes. Another leakage is the $19 billion Africa spends every year to import food when back in the 1960s, Africa not only fed itself but also exported food. Adding up the leakages exceed $230 billion, which is nearly ten times what comes in foreign aid.

Obviously, Africa can find more aid resources by plugging the leakages than begging for more aid. But aid cannot be stopped. It is a moral imperative for the rich to help the less fortunate. Civil society organizations will mount pressure on the Canadian government to raise its aid commitment from 0.4 to 0.7 percent of its GDP – especially in the light of the widely reported fact that Africa is not expected to meet the Millennium Development Goals (MDGs).

At the April 3, 2007 ECA's Conference of Ministers, Dr. Wani Tombe Lako of the Information and Communication Service of ECA, said in Addis Ababa, Ethiopia) that at the current pace, it was unrealistic for African countries to imagine that they could achieve the MDGs, "even in 100 years." Dr. Lako said that poverty and hunger in Africa might double by 2015. He said most African countries had not made progress in gender equality and women's empowerment, and that Africans were still living "in an ocean of poverty" (

These sentiments were echoed by another United Nations' African Development director, Gilbert Houngbo, who said in Brazzaville, capital of the Republic of the Congo that "the [African] continent will fail to reach the goal of slashing poverty in half by 2015. "Despite some encouraging economic results, Africa will not achieve the Millennium Development Goals by 2015. African growth is handicapped by ... poor empowerment of women, weak child protection, and insufficient access to reproductive health and to decent work," he said (The Washington Times, April 26, 2007; p.A14).

However, to help Africa we cannot proceed to do business as usual. Forty years of development assistance to Africa has been a massive failure. As I indicated in a testimony before this Committee last year, there were problems on both the donors and recipients' sides. Accordingly, I would like to congratulate the Committee for their courage in:

A). Admitting of this failure of development assistance to Africa. It is tough to admit mistakes but it is cathartic, and

B) Crafting a Bill to fix the problem, given the considerable resistance they face from the government.

I recognize that the Bill has gone through the parliamentary meat grinder and has been stripped of certain provisions; for example, the Advisory Committee and the Petition clause. Nonetheless, the Bill seeks to achieve three laudable objectives;

First, the objectives of Canadian development assistance are more clearly defined. In the past, id=lw_1192598787_26 style="CURSOR: hand; BORDER-BOTTOM: #0066cc 1px dashed">Canada tried to be all things to all poor people. This time around, the Bill makes poverty reduction the goal of Canada's official development assistance, to ensure that this assistance is consistent with Canada's international human rights obligations and that it takes into account the perspective of those living in poverty.

Second, and for the first time in Canadian history, the Bill seeks to enforce accountability and transparency in the disbursement of development assistance. The competent minister will have to show what has been spent and what results have been achieved in terms of poverty reduction.

Third, the Bill will shorten the time it takes to obtain information on development assistance. It cuts the time from the current two years or so to six months from the end of the fiscal year.

Nonetheless, while this Bill is a major improvement on the current status quo, I have two major concerns.

A. About the Bill Itself:

First, I recognize that the term "poverty-reduction" has been adopted in consonance with international norms, as specified by the OECD Development Assistance Committee, the DAC, and the UNDP. But the term can create perverse incentives. Since poverty in Africa has often been exacerbated by misguided government policies, what prevents a government from creating more poverty in order to receive more development assistance?

"Wealth-creation" might probably be a better term as this would change the matrix of thinking about development. Instead of conceiving of the poor as in a pitiful state for their poverty to be reduced, they may now be seen as dynamic wealth creators, which they are. More importantly, the adoption of this new terminology will help reduce the state's role in development. Wealth is created in the private sector, not by the government.

The existing "poverty-reduction' terminology rather strengthens the role of the state in development. Africans' view of their governments was beautifully summed up by a tribal chief in a rural farming community in Lesotho: "We have two problems: rats and the government" (International Health and Development, March/April 1989; p. 30).


To solve Congo's economic crisis, Amina Ramadou, a peasant housewife, suggested: "We send three sacks of angry bees to the governor and the president. And some ants which really bite. Maybe they eat the government and solve our problems" (The Wall Street Journal, Sept 26, 1991; p. A14).


Said Mr. Mohammed Boudiaf, the head of Algeria's High Executive Council (HEC), lamented: "A large segment of the population has, I am afraid, lost confidence in the capacity of the leadership to provide jobs, housing, health care and its ability to combat corruption" (Financial Times, June 17, 1992; p.


Second, the Bill seeks to take into account "the perspectives of the poor" but how this is to be achieved is unanswered in the bill. In the original version, a provision was made to have an Advisory Committee and a Petition process but these have been dropped and there is no mechanism for that in the new version.

B. About the Recipients In my view, there are many more problems with the recipients in the utilization of development assistance. Due to diplomatic constraints and issues of sovereignty, there is only so much Canada can do to enforce accountability and transparency but these are exactly what the poor in Africa would also like to see: Who gave what to assist Africa and how was the money spent? This kind of information is "empowering."

Last year, I testified that smart aid is that which empowers the poor to ask such questions and instigate change from within. The donors talk about "poverty-reduction" but the poor in Africa, who see their governments as the cause of their poverty, want change.

Canada can be a leader in this regard by setting conditions under which she will give aid. At the minimum, just as the Bill requires the competent minister to account for how development assistance was disbursed and what results were achieved, the Bill should also require the correspondent minister in the recipient country to provide an accounting of how Canadian aid was spent. Such a report should be made public, sent to both parliaments.

At the maximum, Canadian aid may be strategically targeted to empower the poor. Currently, foreign development assistance is not targeted. It is provided as "general budgetary support." A typical African budget is broken down into two categories: "Recurrent Expenditures" and "Development Expenditure."

Generally, the government raises enough tax revenue to cover "Recurrent Expenditures." The "Development Budget" is then presented to donors for funding. But aid money is fungible and once provided, it disappears into the catacombs of the government, making it impossible to determine exactly what it was used for.

A better way is for Canadian aid to target specific institutions that empower the poor. As I mentioned last year, six institutions are critical in this regard to assure accountability, transparency and professionalism.

• A free and independent media to ensure free flow of information. The first step is solving a social problem is to expose it, which is the business of news practitioners. State-controlled or state-owned media do not expose corruption, repression, human rights violations and other crimes against humanity. In fact, it is far easier to plunder and repress people when they are kept in the dark. The media needs to be taken out of the hands of government and ought to be the first strategic enterprise the state should divest itself from before any foreign aid is given.

• An independent central bank: to assure monetary and economic stability, as well as stanch capital flight out of Africa. The World Bank, for example, should desist from dealing with African countries without an independent central bank. Central banks have been the linchpin in the transmission of loot by the ruling bandits.

• An independent judiciary -- essential for the rule of law. Supreme Court judges may also be rotated within a region. In December 2001, Mokhtar Yahyaoui, president of the Centre de Tunis pour l'independence de la Justice (CIJ), was dismissed as a judge in Tunisia after calling for the constitutional principle of the independence of the judiciary to be
respected (Index on Censorship, July 2003; p.161).

• An independent Electoral Commission to avoid situations where African despots write electoral rules, appoint a fawning coterie of sycophants as electoral commissioners, throw opposition leaders in jail and hold
"coconut" (farcical) elections to return themselves to power. Africans take elections seriously and will throw the "rascals" out in a free and fair elections.

• An efficient and professional civil service, which will deliver essential social services to the people on the basis of need and not on the basis of ethnicity or political affiliation.

• The establishment of a neutral and professional armed and security forces.
The establishment of these institutions would solve the majority of Africa's woes. For example, the two great anti-dotes against corruption are an independent media and an independent judiciary. But only 8 African countries have a free media in 2003, according Freedom House. These institutions cannot be established by the leaders or the ruling elites (conflict of interest); they must be established by civil society.

Help give the African poor these institutions and they themselves will instigate change, create wealth and lift themselves out of poverty.
Thank you.

George B.N. Ayittey, Ph.D.
Washington, DC
June 13, 2007.




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