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Strategies SADC must implement to reduce vicious aid dependency

AMPLE development strategies and policies in less industrialized nations like Tanzania, meant to do away with poverty, have been on trial with no major effect from the era of structural adjustment programmes.

The state of lagging behind for most African countries and many SADC member states can be accounted to a variety of factors, many of which, if three solutions are implemented, in my opinion, could bring about remedy that will see these countries doing away with the aid syndrome mentality.

Thoughts presented here today attempt to closely look at three areas that could make SADC member states to come out and in long term stop relying on handouts from donor countries.

Even though, I will not scrutinize in detail the nature and the relevance of foreign aid given to unindustrialized nations such as Tanzania and assess attached terms and conditions and level of their influence.

In short, aid given cannot help to develop a country in long term to save better its citizens.

It is well known that foreign aid has been contracted for development projects support, supplementing national budgets, debt relief, aid to attain the set millennium development goals, to mention just but a few which are predominantly supposed to lead these countries i.e. Tanzania, Zambia, Mozambique etc. to intermediate income status etc.

To date, it is well acknowledged that loans and grants in whatever form and frequency given to speed up poverty reduction programmes have shown little aptitude to decrease poverty in real term.

Are offered aid blanketed with concealed plan from donors who set unbearable conditionality, hard to meet desired results?

The New Partnership for African Development (NEPAD), which was created as a well thought and premeditated new re-engagement to lay solid groundwork for the regeneration of African condition, despite its efforts to eradicate poverty, to put African nations on the path of sustainable growth and to halt the marginalization of the African continent in the globalization process, to integrate the region in the global economy will be successful if; Africans nations are able, first to identify priorities; second, define the priorities and third institute robust plan to implement them.

Opinions voiced here, are an endeavour to shed light on strategic areas that I believe, SADC member states governments, especially now under the Chairmanship of Dr John Joseph Magufuli, need to take this opportunity to scale-up strategies that will spur, not only democracy and creating the enabling intra-trading environment, but also build prosperity in Africa that will, in long-term reduce its dependency on donor hand-outs.

For Africa and explicitly SADC member states, to reduce and in longterm stop depending on aid, will need to work on job creation challenge.

Africa has the youngest population in the world. Statistics quoted in the media indicate that 200 million young people are aged between 15 and 24 and this is expected to double by 2045, according to African Development Bank.

Assuming that the region will have a shortfall of 74 million jobs that need to be created by next year 2020, administrators need to create strategies and execute plans that will permit for a more competitive private sector that favours business growth, job creation and stimulation of African economies.

Job creation execution plan will also need rigorous fiscal and monetary policies, good governance, strengthened judiciary systems, transparency and an enhanced investment climate.

Adequate job openings will be created if long-term investment in the private sector will be prioritised, the infrastructure and manufacturing industries are allowed to competitively function and infrastructure for agriculture sector is given what it deserve.

Enhancing incentives to expand the quality of education and skills that meet prevailing market demand will also be critical to producing a skilled marketable and economical workforce.

To be able to move away from dependence on donor aid, SADC governments should push to improve regional integration initiatives, which are key to sustaining development and encouraging long-term prosperity for the entire area.

Increasing intra-African trade competitively with easy cross-border processes will be a key component to accelerating economic growth, as it will escalate industrial growth and competition, improve efficiency and develop local infrastructure logistics.

Africa’s Continental Free Trade Area aimed at establishing free trade among all 54 nations on the continent; though the region is behind schedule in its timeline, due to some countries’ internal clearance signings, in my view it provides a pivotal moment for development in Africa to stop relying on donor aid.

Data published in the media indicates that the current level of trade among African nations is only 12 per cent equated to 60 per cent for Europe, 40 per cent for North America and 30 per cent for the Association of Southeast Asian Nations.

The Continental Free Trade Area in my understanding will generate the world’s largest single market and effectively boost trade among African states significantly.

When combined with good governance and political stability, intra- Africa trade and deepening market integration will significantly increase economic growth, job creation, employment and poverty reduction, inflow of foreign direct investment, industrial development and better integration of the continent into the global block chain economy.

Overtime, this would generate an environment that will decrease the continent’s current heavy reliance on the outside world support for its growth.

It is always taken for granted, but my take is that the prospect of the African trade system hinges upon what Africa will negotiate and not on what Africa deserves.

This is a work up call for leaders, especially for SADC members to actively seek commercial and trade engagement deals. Donald Trump born June 14, 1946 is the 45th and current President of the United States.

In foreign policy, Trump has pursued an America First agenda, withdrawing the Americans from the Trans-Pacific Partnership trade negotiations and undoubtedly he frequents States that US will unequivocally protect America first in future trade regimes.

This tactic can also be embraced by African leaders in their various forms of economic and trading blocs to protect what is better for Africa.

Data cited in the media indicate that the SADC Region market alone has a pooled estimated market of 370 million individuals and an estimated GDP of 607 billion US dollars.

Africa is not any donor nation’s trade competitor; especially when it comes to claims of unfair practices that are costing American jobs, an issue that continues to fuel trade war between USA and China on trade tariff etc.

Fair commercial engagement and trade negotiation through arrangement such as the African Growth and Opportunity Act (AGOA) will not water down jobs elsewhere, instead will create more jobs.

Statistics quoted in the media point out that through for example AGOA, around 120,000 jobs have been created in the USA and 350,000 direct and over 1 million indirect jobs created in Africa.

In his acceptance speech which he gave when he assumed the southern African Development Community Chairmanship, President Magufuli reiterated the need for SADC member States to work together and strengthen intra-trade among members.

If President Magufuli’s expectation and vision to lead the bloc in the struggle for economic liberation happen, then in long-run, this could reduce dependence of outside support.

As a region, records quoted in the media indicate Africa accounts for example around 20 per cent of US aid, with Egypt, Kenya, and South Sudan being the biggest recipients.

At any level, relying on external aid on such scale is not good for the future of such nations. Although criticisers may claim that lowered public international support in any form will adversely affect development projects, in my opinion, such reduction should also be seen as an opportunity for the African continent to rise and for the relationship between development supporters be it USA, UK, Japan, China etc and Africa to evolve.

Africa isn’t poor and what is required is to change mind-set and to search and work on economic opportunities existing within Africa.

AFRICA witnessed a big shame few days ...

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Author: Dr Hilderbrand Shayo

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