Wednesday, April 17, 2024

Dambisa Moyo on a “Marshall Plan” for Africa

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BY DAMBISA MOYO

THE PANDEMIC’S scale and virulence means it is destroying economies as much as it is claiming lives.

Poor countries look as if they will suffer the worst, in particular those in Africa, home to the most impoverished.

But the world need not be passive in the face of the calamity.

A modern “Marshall Plan” for Africa, modeled after the big aid package that America provided European countries after the second world war, could prevent a humanitarian tragedy and pay dividends for generations.

A decade ago I gained notoriety as a critic of large-scale foreign-aid programmes that flow from Western countries to developing economies.

I argued that over $1trn of aid provided over the previous 60 years had failed to improve living standards across Africa. I argued that, worse still, it had harmed, not helped, the continent by fuelling corruption, fostering dependence and creating economic malaise.

Yet today it is clear that Africa urgently needs a substantial aid injection or it will be destroyed by the coronavirus. There are three broad reasons to act.
First, morality. If nothing is done, Africa is forecast to have as many as 1.2bn infections and 3.3m deaths by the end of 2020, according to the UN Economic Commission for Africa. Second, migration.

Aid may prevent a surge in disorderly or illegal migration, which is already plaguing Europe. If Africa’s health infrastructure and economic foundations are not stabilised, the pandemic will almost certainly unleash an exodus of refugees.

The third reason is, frankly, influence. At a time when China is the pre-eminent geopolitical force in Africa, a large aid package is an opportunity for the West to re-engage with the continent and gain a new edge in its ideological and commercial clash with China. This mirrors how America was motivated to create the original Marshall Plan to prevent Europe from tilting towards the Soviet Union.

Already China has proven a worthy contender in this great-power rivalry, as a partner with Africa in trade, investment, and aid. China’s exports to Africa topped $90bn in 2018, three times those of America. Meanwhile, China is a leading investor in the African continent. In 2018 Chinese flows of foreign direct investment into Africa reached $5.4bn, whereas flows to the continent from America have remained consistently below $2bn since 2015 and turned negative in 2016 and 2018. Considerable support by the West may prevent Africa from pivoting further towards China.

That is the lesson of the original Marshall Plan. From 1948 to 1952 America provided loans, grants, and technical assistance to 16 European countries. The idea was to reconstruct cities, industries, and infrastructure damaged during the war; to foster trade between Europe and America; and, crucially, to stem the spread of communism. The price tag was roughly $13bn, or around $135bn in today’s money.

This would hardly be enough to combat COVID-19 across the continent. An alternative benchmark is the size of the Marshall Plan relative to the national economy.

The $13bn in 1948 represented around 4.7% of America’s economy. To spend the same proportion today would cost around $1trn.

That is roughly one-third of Africa’s overall gross domestic product, an amount in line with the scale of the problem, albeit ambitious. In contrast, the IMF and the World Bank have pledged $62bn in emergency financing for coronavirus for low-income and emerging economies—a hefty sum, but a fraction of what is probably needed.

America needs to lead. It can act faster than the European Union. And the dollar, as the world’s reserve currency, gives it flexibility in managing the fiscal burden.

But European countries should not be far behind in giving support. After all, they are closer to the problems that disorder in Africa may bring.

In the spirit of the stimulus approach used in Hong Kong and in America (think the $1,200 cheques to its lower-income citizens), donor countries should consider direct cash payments to African households.

The beauty of a direct-transfer approach is that it mitigates the risk of funds being illicitly diverted, as billions in aid have been before, despite all the “conditionalities” that are regularly imposed to prevent this. A payment infrastructure already exists.

According to the World Bank, African citizens received $46bn in remittances in 2018. Moreover, donors can take advantage of technologies to make peer-to-peer transfers, such as via mobile phones.

The logic for the package is compelling. Africa is at the frontier of power politics, with its vast mineral resources and a substantial amount of untilled arable land on the planet.

A Western aid project would be a counterweight to China’s influence and may pay itself back in security and economic terms, thus serving the West’s interests.

Like the original Marshall Plan, it would encourage the development of markets.

American exports to Africa totaled just $28bn in 2018 while the EU exported nearly $170bn to Africa. The initiative would support a global, liberal, economic order of cross-border trade, international capital flows, and market capitalism.

To some, a Marshall Plan for Africa might appear fanciful and even seem a political non-starter, given the huge debts from stimulus packages and the nationalist political forces facing many Western governments.

However, the risks of inaction are great, too: entrenching Africa’s poverty, fanning mass migration, fomenting domestic unrest and possibly terrorism, and pushing the continent closer to China. The economic harm of doing nothing may be costlier than intervening.
Of course, Africa was mired in problems even before the pandemic. The pace of poverty reduction is slowing.

A population explosion is underway, with Africa’s population expected to double to 2.5bn by 2050. A lack of basic infrastructures such as roads, power, and water hobbles economies.

The consequences of climate change are largely overlooked (as they are basically everywhere). Growing debt weighs on national budgets.

A Marshall Plan for Africa can’t fix every problem. But it might remedy the most urgent ones at a time when it is most needed.

To be clear, I am not advocating an open-ended aid programme in perpetuity. More than 60 years after the Bretton Woods agreement and the establishment of a system to provide international economic assistance, valid questions remain about its efficacy—not least because of African governments’ poor record in improving people’s lives and livelihoods at scale and in a sustainable way.

However, I advocate a Marshall Plan for Africa because it, like the original Marshall Plan—or any emergency aid for that matter—is short, sharp, and finite assistance to save lives and rebuild the economy. It will save Africa, a continent that is home to more than one-fifth of humanity. And the West may reap the benefits for decades, too.

The Author is an economist. Her books on global economics include “Dead Aid” (FSG, 2009). She serves on the boards of several companies, including Chevron and 3M.

46 COMMENTS

  1. The money will be stolen. Let them die like flies they always say they don’t need interference from the west.

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    • Africans should just make China pay reparations for this inconvenience and cancel all its debts.

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  2. Why would you give money to a country were a president flies in a gulfdtream and his people live in poverty and a country can’t afford masks? This is this the perfect time to not give them money and let corona virus expose them…. then their people will then sort them out..

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  3. Little girl you think to much instead get up and work for your betterment. As long you will get help from nomatter where,East,West or somewhere you will never improve.

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  4. Disappointing from dambisa. In other words dambisa is a brain washed American or western stooge. This is mercenaric in nature. She is calling for America to use its money to have influence on us. A neo colonialistic approach which assumes Africans can be controlled like kids. She then claims Africa will have 3.2 million deaths by 2020,. That is 7 months only. I wonder where she got those absurd statistics. Any way I am not surprised as she is a diasporan and their thinking are all the same. They are patronizing and think are better than others merely based on their geographical location. Dambisa please leave us out of your nonsense with your imperial masters. She must be on drugs. Kz

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  5. @Kaizar, you are so right man. Uyu gelo Dabisa is just a Diva of Hollywood. These are kind of Africans who forget their language. “I can’t speak Bemba, I have forgotten, you know I left Zambia when I was 35” .

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  6. Nostra I agree. I didn’t expect such from her. I am well and truly disappointed as I held her in high esteem.

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  7. Kikikiki! Notrasdamus!! Nakana ine. Wandepula man!! You remind me of Mutale. After two weeks of staying in the UK. When she came she started pronouncing her name as Muuteo!!! As otherwise Dambisa’s article is a missed call!!! It’s a new normal!!!

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  8. These diasporans believe only their masters’ ways are workable. China and Asia developed because they have less people like Dambisa in leadership. KZ is spot on, to get such amounts from westerners is tantamount to recolonisation. She puts the PF into context though:
    “…A lack of basic infrastructures such as roads, power, and water hobbles economies….” a level this PF GRZ has made great strides in.

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  9. Dabisa is making her case on the much doged issue of poverty in Africa, now worsened by Covind-19 pandemic. Intellectually imanciated guys like KZ don’t get it.

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  10. Dr. Dambiasa Moyo, you made me cry. Out of many academic articles you have written, this was below critical thinking. Re-colonization of Africa is a white mans project. We have nothing to do with COVIS-19. It is a white man’s disease brought to Africa. When Madagascar finds herbal medicine, a white man wants approval from him. Dambisa, come back home to Zambia, the country needs you.

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  11. Wishful thinking by Dambisa. If Europe and America were ever interested in building a strong African economy, why haven’t they done that already? Instead, since “independence” they have resisted and frustrated all African attempts to be like them .

    Africa does not need a Marshall plan. Africa needs fair treatment. Multinational companies should stop robbing Africa of it’s resources by getting raw materials at give away prices, adding value and selling them back to us at high prices.

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  12. Oooh, Dr. Dambisa Moyo, you made me cry. Out of many academic articles you have written, this was below critical thinking. Re-colonization of Africa is a white mans project. We have nothing to do with COVIS-19. It is a white man’s disease brought to Africa. When Madagascar finds herbal medicine, a white man wants approval from him. Dambisa, come back home to Zambia, the country needs you. The country Zambia looks up to you to offer nationalistic ideas not neo-colonial theories.

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  13. @ Nine Chile
    Africa does not need fair treatment…..
    What Africa needs is not to have people like Lungu as presidents…. What did he do in life before he got into politics? NOTHING! From living in a garage to compound then statehouse, let be not even mention being a known thief.

    Thats the real problem of Africa.

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  14. This lady sold out when she joined the very people she criticised….you cant have a Marshall plan when some countries have borrowed reckless like the Lungu govt it’s like trying to treat an alcoholic with liquor.

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  15. @The Engineer African presidents will come and go but Africa will remain. It is easy to point fingers at our leaders but complaining is not a strategy. We need to broaden our scope and look at the bigger picture. We should be looking at opportunities and possibilities of how to progress. That is more significant than lamenting about how/why we fail.

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  16. The leaders that lifted Europe out of the devastation of the second world war cannot be compared in regards to work ethics, civic duty, hardwork and honesty to the self centred, short sighted and selfish leaders Africa has been cursed with should we receive a Marshall plan backup which is only wishful thinking because even rich western countries are faced with gleam economic prospects, but should that happen I can assure you 90 percent of those funds will either be stolen or be spent on infrastructure which will both fail or slowly waste away due to poor or no maintenance. We are just curse onto ourselves until we change our mindsets.

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  17. @ Nine Chale

    This is were you miss the point, the is no country on this earth whhich has a bigger picture with no leadership. What bigger picture has Lungu got? He told you he had no vision. So you and i can dream big as long as the people in control are useless, continue enjoying your time in Germany.

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  18. @ Nine Chale,

    I lived in Germany for so many years…. you think they have or had leaders like Lungu? Go read the history of Germany.

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  19. @Engineer their political system is different, more balanced than ours but you know that they also had a leader who once brought a lot of misery upon them. Nevertheless, history should teach us how to move forward and not backwards. When it come to Africa, it’s unfortunate that we tend to focus too much on our challenges and not on what we are able to achieve.

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  20. Very shallow write up. Let us find ways of doing things for ourselves. Too much begging. We can borrow, but let us not look for free funding. No. Let us learn to be self sufficient. It will be harder, but better because we will not easily squander our sweat.

  21. @Wamulume Kalabo exactly. It’s time for Africans to put their heads together and come up with ideas to move our continent forward. From Germans, I have seen that it is possible for citizens to forget about politics and concentrate 100% of their energies on building the economy. In this situation, it becomes difficult for any leader to sabotage the economy. Now in Africa, people focus 100% on politics and expect government to build the economy. We need a total overhaul of our thinking.

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  22. @TheEngineer: the problem with you point of view is that it’s not objective but subjective. There simply is no rational in your thinking except hatred for Edgar Lungu and blind support for hh. Quite bizzare….

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  23. Nine Chile has nailed it-we just need to control our resources like the Arabs have done. That’s the best option and solution. As long as multinationals use vices like transfer pricing etc and continue to operate under the current contracts signed by Levy and his team, they will ship out all our revenue.

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  24. TheEngineer – You are wasting you time with Nenah Cherry s/he has his/her head in the sand ….the blogger has been blogging for a while I still cant make out the gender as the blogger is fixed on the fence like s/he works in the Zambian embassy.

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  25. “Dambisa Felicia Moyo is a Zambian economist and author who analyzes the macroeconomy and global affairs. She currently serves on the boards of Barclays Bank, the financial services group, Seagate Technology, Chevron Corporation, the global miner Barrick Gold, and the 3M Company.”

    This weave wearing girl Damibisa would have made everything being an author and independent analyst …but when the devils saw she was gaining influence especially in her home continent when she was about to release a book about the western companies they gave her job and leashed her to a pole…just look at the boards she sits on now what can she tell us about dead aid?

  26. Zambian Citizen – those 20 year contracts you refer to expired long ago but guess what? Everytime you see Mopani say they are laying off workers and the ministers rushes to CB and has a closed door meeting what do you think they are discussing? Renewal of the same developmental agreements to keep energy subsidies.

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  27. @Tarino I would take your comments more seriously if I remembered ever meeting you, but I don’t. So how would you possibly know any personal facts about me? I ask you to be objective and engage me on issues pertaining to the lecture at hand, instead of creating false impressions. Be reminded that malicious posting of negative information about the private life of other bloggers is a cyber crime. Things would’nt look pretty on you if I might litigate.

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  28. You can not give any marshal plan with money to leaders like lungu……..he will use the money to bribe voters and oppresse any critics……

    Lungu is the type of leader who needs close supervision by the lenders.

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  29. @ Torino Orange, don’t annoy KZ by enumerating Dambiso’s personal profile, its not Zambian based. KZ on tranquarisers may sue you to ECL court.

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  30. This is Dambisa Moyo ,a lady with proven credentials to talk about economics not Kabwalala Zulu a person with a known CV of enriching himself beyond his means with a short space of time .This PF government is worse than covid -19 to put it mildly .

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  31. This is Dambisa Moyo ,a lady with proven credentials to talk about economics not Kabwalala Zulu a person with a known CV of enriching himself beyond his means within a short space of time . There is simply no way that a country can have 48 houses without owners and that is treated as a normal occurrence . When things like 48 houses without owners happen or are declared ,we Zambians often wonder whether it is the ACC or Zambia Police who should be taken to court for gross incompetence and selective justice . There is absolutely no way that a government can fail to find the owners of the houses .Such things can only happen in Zambia whose government is packed with people like Kwabwalala Zulu .This PF government is worse than covid -19 to put it mildly

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  32. Unless Africa was strongly united it would be futile to ransom the super powers on the basis of their rivalries as it’s very easy now to pick the tatters without any scramble

  33. Your Most highness and Lady of excellence , scholar of scholars , Mighty Miss Dambisa you have done a complete 360 on your dead aid stance . You have to understand that aid to a lot of developing countries , especially like you find in Africa , whether emergency ,short and sharp or longer term will always be dead aid.
    I might refer to Haiti and what has happened after the earthquake. That situation can be applicable to many, if not most, African regimes today.

  34. Iwe Tarino, how do contracts that were signed after 2002 expire long ago?? Walikumanafye bwino?? Keep you cr@p to yourself and your husband. What energy subsidies?? Bushilu???

  35. Zambian citizen, you cannot compare to my very intelligent partner. He is 100 times the man you will ever be. The problem with you is that you refuse to accept simple logical things. Very laughable

  36. Dambi. Has always been much overated. She is a tool for Western corporations that live, breath taking our minerals away for a song! What a dastardly plan….take over from Chinese influence in Africa. That’s a Trojan Horse Aid package. It has an agenda. Sadly, West are never interested in a successful Africa, the only want their mineral stuff.

  37. @Tarino: What logic is there in saying contracts that were signed after 2002 expired after 20 years??? You honestly think Glencore or vedanta or FQM signed contracts that would expire and hand back the mines to Zambians??? Mwanawasa and the MMD let the country down. What the PF are trying to do is commendable and should be supported. They took back Zamtel, KCM. They have set up IDC, ZCCM Gold. Let’s give credit where it’s due.

  38. What should we call such people? I guess they are just trying to play as God. To hell with your doom analysis. We need people that are proud of where they come from. You are the chaps who bring shame to us because of your slave mentality. If we have such people in diaspora, then it explains why we are lagging behind because each step we take forward they undo it. Just come back and hustle to develop your nation instead of begging.

  39. Dambisa is dead wrong. Africa needs to behave like they have been into slaveryfor 400 years and have just come out of it but have
    to fight to avoid another captivity that might even last longer. By focusing on strategies to be self sufficient in agriculture, technology and innovation, Africa can rise within 10 to 15 years.
    Nobody wants will give handouts to make africa great .

  40. I am in the diaspora and I am frankly very disappointed with Dr Dambisa Moyo’s perspective. It seems to me that Dr Moyo’s perspective on Africa’s place in the universe is hinged upon a very narrow fulcrum between the East and the West. The narrative that for Africa to develop, it has to either look to the west or to the east to make meaningful progress. This approach does not consider self efficacy as one of the most effective strategies for Africa to develop. Africa must look within.

  41. I am in the diaspora and I am frankly very disappointed with Dr Dambisa Moyo’s perspective. It seems to me that Dr Moyo’s perspective on Africa’s place in the universe is hinged upon a very narrow fulcrum between the East and the West. The narrative that for Africa to develop, it has to either look to the west or to the east to make meaningful progress. This approach does not consider self efficacy as one of the most effective strategies for Africa to develop. Africa must look within.

  42. I am in the diaspora and I am frankly very disappointed with Dr Dambisa Moyo’s perspective. It seems to me that Dr Moyo’s perspective on Africa’s place in the universe is hinged upon a very narrow fulcrum between the East and the West. The narrative that for Africa to develop, it has to either look to the west or to the east to make meaningful progress. This approach does not consider self efficacy as one of the most effective strategies for Africa to develop. Africa must look within.

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