By the Blouin News Business staff

Sub-Saharan Africa’s $58 billion aid drain

by in Global Economy.

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Western countries tend to display their generosity with the world’s poor via the hundreds of millions of dollars governments allocate in financial aid for less affluent states. Yet a new report by Health Poverty Action tells a different story, one which shows that it is wealthy nations who are the main benefactors of such financial aid relations. In comparison with what it loses, “the amount Africa receives back in aid is negligible.” Rich nations take much more from sub-Saharan Africa than they give in aid – through tax dodging, debt repayments, brain drain, and the unfair costs of climate change, among others – all of which wealthy nations benefit from. A new report from the organization – titled ‘Honest accounts? The true story of Africa’s billion dollar losses’ – points out that,

While $134 billion flows into sub-Saharan Africa each year, predominantly in the form of loans, foreign investment and aid; $192 billion is taken out, mainly in profits made by foreign companies, tax dodging and the costs of adapting to climate change. The result is that ‘sub-Saharan Africa suffers a net loss of $58 billion a year. As such, the idea that we are aiding the region is flawed; it is sub-Saharan Africa that is aiding the rest of the world. $192 billion is more than is needed annually to eliminate hunger; provide universal primary, and improved access to secondary education; affordable health coverage for a range of diseases; safe water and sanitation, and sustainable energy for everyone in the world – not just sub-Saharan Africa.

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The current deception in aid is presented through a comprehensive comparison of the range of resource flows in and out of sub-Saharan Africa. The graph above shows the financial inflows to the region as well as the outflows and costs it faces. If the rest of the world continues to raid the region at the same rate, $580 billion will be taken from the people of sub-Saharan Africa over the next ten years, warns the paper.

The international development organization is clear when it comes to describing the problem in addressing poverty in sub-Saharan Africa: the drain of resources is being ignored in favor of aid propaganda at the same time that an aid smokescreen has descended. “Wealthy governments celebrate their generosity whilst simultaneously assisting their companies to drain sub-Saharan Africa resources; companies promote their ‘corporate responsibility’ whilst routing profits through tax havens; wealthy philanthropists donate money whilst their companies dodge tax; and short-term fundraising tactics mean NGOs ourselves can be guilty of pushing the idea that poverty can be solved if we give a few pounds, whilst ignoring the systematic theft going on under our noses.”

As the post-2015 development agenda to define the future global development framework is in the making at the same time that tax transparency has taken a more prominent place in the G8 economies, those in charge of pushing both agendas forward should read the detailed report and take affirmative action. A suggestion to all the wealthy nations, stop misrepresenting such ‘generosity’ with sub-Saharan Africa and take action to tackle the real causes of poverty. The end to poverty is as near as effective, transparent and coherent policies are truly implemented.

The report was authored by 13 United Kingdom and Africa-based NGOs, such as:Health Poverty ActionJubilee Debt CampaignWorld Development MovementAfrican Forum and Network on Debt and Development,Friends of the Earth AfricaTax Justice NetworkPeople’s Health Movement Kenya, Zimbabwe and UKWar on WantCommunity Working Group on Health ZimbabweMedactHealthworkers4All,Friends of the Earth South AfricaJA!Justiça Ambiental/Friends of the Earth Mozambique.