1. Why Foreign Aid is Hurting Africa Samantha Brian Adam Alan

2. Kibera, Kenya 1 million people crammed together in 1 square mile Live in filth and absolute poverty So………

3. Where is the money? United Nations agency a short distance from Kibera? Africa receives $50 billion in aid per year Past 60 years---over $1 trillion in aid So why isn’t Kibera and Africa prospering?

4. Where is the money? Debt repayments about $20 billion per year Where do they get this $20 billion from? –Take it out of expense accounts for education and healthcare Some debt is cancelled, but they only received more aid

5. Result IMF cautioned donors to be careful in the amount of aid they give African countries Report “Aid Will not Lift Growth in Africa”

6. Where is the money? So where is all the aid going to? –Corruption –Supporting bureaucratic governments and organizations African Union estimates corruption costs Africa $150 billion per year

7. Zaire: –Creditors can’t get money back –Yet, IMF gave Zaire a massive loan –Past President stole over $5 billion Malawi: –President embezzled $12 million Zambia: –President stole from health, education, and infrastructure and pocketed it himself.

8. Bad for Economy “Free” money means inefficiency and keeps government in power Taxes? No way to raising finances yourself FDI? A lot of red tape and lag time Puts African citizens out of jobs –Example Mosquito nets

9. Bad for Economy Food aid vs. African farmers What they should do? –Aid money  African farmer  Feed people Money into a country  increases home prices  good expensive to export What they should do? –Issue bonds

10. A first…. Ghana Pro-market movement Increased use of mobile phone More opportunities for citizens

11. Conclusion Issue bonds to raise cash, rather then depend on free money Raise capital in other markets Creative attractive “FDI environment” Increase trade