Momentum for Wealth Creation: Why Africa Economic Transformation Exceed Aid

Abstract

There has been continuous and inconclusive debate on the role and impact of foreign aid in Africa’s economic development. While some development experts believe that aid is crucial for Africa development, others argue that it undermines economic self-reliance. This paper surveys the manifold social and economic problems currently facing Africa, and argues that aid is necessary but insufficient for economic development in the continent. It posits that Africa’s economic transformation rest not on ‘foreign aid’ but momentum for ‘wealth creation’ which can be viewed from these pillars: knowledge, entrepreneurship, technology and governance. The continent needs to think outside the box when instituting and utilizing these pillars. However, to enable these pillars function well, development issues have to be examined from a long-term perspective. Perceptions have to be transformed from over-reliance on aid to more responsible means of capital flow such as borrowing and investment. Efforts should also be geared towards ensuring that the benefit of economic development permeates all groups and classes in the society up to the community level. New players such as the business class and Africans-in-Diaspora should be actively involved in the process of formulation and implementation of development policies. In addition, immigrant entrepreneurs in Africa, especially Asians and precisely the Chinese, must be encouraged to channel their investments to diverse significant sectors. There should also be initiatives to facilitate collaboration between immigrant and local entrepreneurs to foster knowledge-sharing and innovation. Active participation in international trade, radical infrastructural development and good governance are the key for a sustainable and inclusive transformation in Africa.
Keywords: Aid, Africa, China, Economic transformation, Wealth Creation