For instance, many of the international donations of food and clothing for victims of Boko Haram’s insurgency in northeastern Nigeria were sourced outside the country. However, Nigeria has indigenous industries that could have met that demand. This charity merely succeeded in putting many local traders out of business. A similar scenario caused economic problems for Rwanda after its civil war and, at other times, damaged businesses in Zaire, Ethiopia, Somalia, and many other nations.
Presently, aid influx is affecting the performance of local businesses across the Sahel region, where famine and drought attract foreign donations. But Africa has the capacity to provide its own products. Foreign aid to sub-Saharan Africa peaked at around $40 billion. However, corruption costs Africa as much as $148 billion every year. Eliminating corruption could more than replace this revenue source.
3. Taxation cannot guarantee progress
The notion that poor countries can increase taxes to generate funds for development programs is absurd. Africa cannot simply tax itself out of poverty for two reasons. First, the average income in Africa is low and, second, economies prosper only when people are allowed to keep most of their earnings.
If more than half of the continent is already living below the poverty level, how much of their earnings can they justly be asked to surrender to the government in the form of higher taxation? And should companies that risk everything to invest in the continent be subjected to exorbitant tax rates because governments, which have a poor record of integrity, say they need more money?
Presently, many countries have a multi-tiered tax systems, which permit the central, provincial, and municipal government agencies to collect taxes from businesses regardless of the firms’ financial condition or size.
This ignores the fact that most business owners already lose money, because they often have to bribe their way through those who administer the numerous laws regulating businesses – and then pay dues to labor unions on top of that. To suggest government increase taxes, considering the financial condition of Africans, will only make things worse.
4. Centralization fuels poverty
Most African governments are too big, too bureaucratic, and too corrupt to function, let alone show any level of transparency. But things were not always like this.