Charity fuels poverty and free enterprise

 

A beggar on a street in Nairobi. Giving people handouts is not a solution to poverty but it entrenches dependence. file 

By MARVIN SISSEY

In Summary

• Zambian economist says the poor in Africa have increased from 10pc to close to 70pc despite years of free flowing aid in past 50 years.

A fortnight ago, I raised a storm when I opined in this column that time is ripe for us to ban tipping in our hospitality industry since it is a counter-productive incentive.

Granted, the radicalism of my views came out as a bit too contrarian and disruptive and thus the uproar it elicited quite expected. While a healthy debate was predicted, I have to admit that I didn’t look forward to it being at the sort of levels that it reached. I was pretty happy that I had achieved my purpose of engaging us into a discussion on the merits and demerits the practice.

That notwithstanding, some readers raised some pertinent issues. Waiters are generally poorly paid and offering tips is a charitable move which a morally just society is expected to perform as compensation for their troubles, they argued.

It is this very argument that I would like to build on to buttress my point further that such a solution to the raised problem is absurd at the very least. Charity is in itself the root of poverty and not a solution as it intends. Hear me out.

Let me make an argument against charity on three hierarchies: government, corporate and personal levels.

It is pretty sad that decades independence, African governments remain among the highest proponents and receivers of charity in the name of foreign aid. Initially, well intentioned, this aid has failed to achieve similar desirable results on our economic growth.

On the contrary, it has been an absolute failure. One of the people who have painted the most eloquent arguments against foreign aid must be the Oxford trained and former World Bank consultant Zambian economist, Dambisa Moyo.

In her beautifully written book Dead Aid, which I urge every African Finance minister to read, Ms Moyo makes a very moving case against foreign charity.

In her stinging criticism, she points out: “Aid has been and continues to be, an unmitigated political, economic and humanitarian disaster for most parts of the developing world. It is the disease of which it pretends to be the cure.”

Ms Moyo notes that despite the free flowing aid for the better latter half of the last century, African poverty rates rose from as low as 10 per cent to close to 70 per cent at the turn of the century.

What aid did was encourage corruption while discouraging free enterprise. Aid causes unmitigated complacency, acute dependency syndrome and hence a dearth of creativity and innovation necessary to fuel economies into life.

The idea boils down to the fact that foreign aid is nonsense charity disguised as development capital and should be eradicated.

A good step to start is for us to live within our means. This idea of working with Sh1.6 trillion budgets when our taxes can barely sustain a trillion in income creating non-ending deficits and hence forcing to rely on domestic and foreign borrowing is the stuff that defines our African tragedy of one step forward and two steps backward.

We are insanely doing the same thing, and expecting different results.

Let me come to corporate social responsibility (CSR). In one of the greatest conundrums of capitalism, a mentality has been built within us to create the notion that profit is inherently evil just as the religious zealots tend to create the notion of sex being discrete, almost sinful something to be ashamed of.