Ghana and the rest of Africa have been told categorically to refrain from aid if they are to develop their respective countries and improve the livelihood of the people.
“Africa’s dependence on foreign aid however comes with costs. Aid resources have not matched Africa’s vast development needs, particularly relating to building physical and human capital”, Dr. John Kwabena Kwakye, a senior economist at the Institute of Economic Affairs (IEA) disclosed at a round-table discussion organized by the IEA.
Ghana has consistently depended on foreign aids which come with conditions attached to it. In 2010, the nation received over $1 billion credit support from the International Monetary Fund and the World Bank alone as credit to maintain fiscal stability in the economy.
Dr. Kwakye said it was time Ghana and Africa broke away from this addiction, saying their long dependence on foreign aid had created moral hazard by breeding complacency and apathy in seeking alternative sources of mobilizing development resources.
He added that all that financial engineering was about was that the nation needed to tap alternative resources.
The forum, which was attended by some economists, think tanks, members of some political parties and policy makers, discussed ways of improving trade among the sub region among others to boost revenue rather than dependence on aid.
Dr. Kwakye noted that bureaucracy and volatility in aid delivery had often curtailed or frustrated African development budgets.
He enumerated several mechanisms that could help boost government’s revenue base.
They included the budget for which he suggested ways to broaden the tax net by roping in more informal operators and the self-employed on the revenue side, while he called for prioritization of spending on certain projects on the expenditure side.
Secondly, he called for the development of the domestic capital market which he said could provide long-term funding for the budget and other developmental activities in key sectors of the economy such as health and transportation.
Dr. Kwakye also called for more measures to tap in remittances fully for development.
Other suggestions include the introduction of Diaspora Bonds which he said could be used to tap resources from Africa’s population and the reversal of capital flight.
Dr. Joseph Annan, Deputy Minister of Trade and Industry, who chaired the forum, called for the need to recognize the addiction to foreign aid which can help the country to overcome the persistent borrowing.
He said that “Let envisage Africa without aid but rather trade.”
Source: Charles Nixon Yeboah
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