Do We Need Aid?

The gap between the rich and the poor in Kenya is expanding at a very high rate despite the improved national outlook on economic growth. Aid tends to expand the political elite as opposed to the business elite. In order to fight poverty, a sector of business class innovators must transform Kenyan problems into business opportunities; but aid makes it difficult for local innovators to respond to the needs of their immediate environment.

Foreign aid ought to be avoided and replaced with sound policies that promote a healthy business environment. For instance, if African governments focused on improving and enforcing the rule of law, it would be easier for international venture capitalists to partner with Africans to make products and generate profits. Another option is to fund initial business start-ups through expanded and competitive stock markets in Africa. African entrepreneurs should to be provided the opportunity to allow private capital investments from all over the world to expand and improve their businesses. A business-oriented population will be more productive, more willing, and more driven by the motive of profits and could thus provide solutions to Kenyan problems ranging from famine and disease to poverty in general. Excessive reliance on aid precludes the development of a self-sufficient agricultural sector, perpetuating an unsustainable short-term approach to food policy.

Conclusion

The future of wealth creation in African nations lies in policymakers recognizing that their countries are but provinces in a larger African continent. Economic policies should focus on cultivating a critical mass of businesspeople that can supply the larger African market and even the rest of the world. A sound economic policy will lead to an expanded tax base, which is far more sustainable than reliance on foreign aid. Rural populations need to be exposed to “business thinking” in order for them to establish long-term plans of engaging in efficient, agricultural practices and engaging in value addition to their products.

Kenya is in a unique position. It is ready to act as an incubation center for business people who can help exploit the rich resources of Africa for the benefit of the entire continent. The resource-rich Africa urgently needs to establish hubs of economic activity in all of its regions to help move the continent’s economy away from an excessive reliance on aid and the export of raw materials.