What is wrong with aid, you say? So many things ....
Undermined Accountability
One of the central issues with foreign aid is that it diminishes the incentive for governments to develop robust domestic tax systems. When African governments receive substantial funds from external donors—largely from Western sources—they become less responsive to their citizens. Research on Uganda and other sub-Saharan countries suggests that reliance on foreign aid can act as a substitute for domestic revenue collection, effectively weakening democratic accountability .
Unsustainable Projects
Aid agencies often favor launching new initiatives over sustaining existing ones. Operated on short-term cycles of five to ten years, these programs prioritize fresh starts to meet donor expectations rather than long-term impact. This “build-and-destroy” model means successful projects frequently fail to reach sustainable maturity. While detailed empirical studies on this cycle are limited, the recurring pattern in development discourse underscores the inefficiencies created by shifting mandates .
Talent Drain
Another problem is the brain drain that occurs when aid agencies offer salaries far exceeding those in the local public or private sectors. By attracting the best local talent, these agencies inadvertently weaken domestic institutions. Over time, skilled professionals find themselves caught in a cycle of short-term, mission-driven work that rarely contributes to lasting local development. This phenomenon is well documented in analyses of international aid practices .
Paradoxical Funding
The funding criteria for projects or startups supported by aid agencies are often contradictory. Donors expect ventures to demonstrate both need and a track record of success—a paradox that starts a cat and mouse game with startups to portray an image of limping along just enough to qualify for "applicable" grants. This bureaucratic catch-22 diverts focus from the very objectives that such support is meant to advance .
Hindered Local Production
A particularly striking example of aid’s unintended consequences is its impact on local pharmaceutical production. Although countries like South Africa have the capacity to produce HIV medications, U.S. policies—enforcing strict intellectual property rights—have constrained their ability to do so. Instead, efforts are made to “help” nations like Kenya develop pharmaceutical manufacturing, despite significant infrastructural limitations. These policies have not only bolstered American pharmaceutical interests but also inhibited self-sufficiency in critical health sectors for far too long .
Dependency & Governance
Ultimately, the cumulative effect of these issues is a dependency on aid that undermines local governance. When governments rely on external funds rather than on building their own revenue streams and institutional capacities, the result is weakened self-governance and a lack of long-term development. Studies have shown that this dependency, combined with the cyclical nature of aid projects, can erode the incentives for domestic reform and accountability.
While foreign aid can play a critical role in addressing emergencies and crises, its long-term effects are far more complex—and often counterproductive—than its immediate benefits suggest.
Trust me - I have lived on this continent for three decades now. I can count the number of successful aid funded long term initiatives on one hand, typically by making my index finger touch the tip of my thumb.