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Why Aid Is Bad For Africa



United States (US) President Barack Obama announced that private companies are providing $12 billion to his Power Africa program, while US firms will invest more than $14 billion towards banking, construction and information technology on the continent.

The US-Africa Summit held in Washington in August focused on sustainable development, trade, collaboration, investment, and America’s commitment to Africa’s security, its democratic development, and its people.

Obama assured Africa’s head of states, gathered in the Mandarin Oriental Hotel, that the US wanted to help Africa grow; nothing else. With his charming voice, he dismissed the notion that the US wanted something in return. Those who are not gullible know the US doesn’t do anything for free.

The African Union has 54 member countries. If the US really cares, it should help Africa in its entirety. It came as no surprise that Zimbabwe’s President Robert Mugabe didn’t get an invite. Other black sheep were Isaias Afewerki of Eritrea, Omar al-Bashir of Sudan and Catherine Samba-Panza of the Central African Republic.

Some African nations declined to join the global superpower. Sierra Leone and Liberia focused on domestic issues rather than sucking up to the US, while Ebola kept West African countries busy.

Africa is not a charity case and progress can be made on our own terms. Foreign partnerships are vital, but the US is not the only option. China is currently forging trade agreements with several African countries.

Now more than ever, Africa needs education to exploit its resources. Academics Nkem Khumbah and Melvin Foote see this as a more viable option than pumping aid into the hands of corrupt officials.

“There’s a way to make a lasting and low cost investment in Africa’s next generation: Obama must bring education – science and technology in particular – to the forefront of the debate about African development,” wrote Khumbah and Foote in The New York Times.

Africa is experiencing an economic upswing, but its growth is predominantly based on extracting natural resources rather than increasing industrial productivity. Most African nations are far away from making any significant international breakthrough.

This is not rocket science. Power-obsessed African leaders need to understand and implement measures to help their countries grow.

Dambisa Moyo, a Zambian-born economist and author of Dead Aid: Why Aid Is Not Working And How There Is a Better Way for Africa, says donations to Africa provide many points to debate – millions march for it, governments are judged by it and celebrities promote the need for it. Calls for more aid to Africa are growing louder, with advocates pushing for the roughly $50 billion of international assistance that goes to Africa each year to be doubled.

Some, however, argue that aid has made the continent poorer and economic growth slower. The aid culture has left countries more debt-laden and vulnerable to the vagaries of currency markets. This leads to Africa being an unattractive destination for investment.

According to Moyo, despite the aggressive debt-relief campaigns in the 1990s, African countries still pay nearly $20 billion in debt per annum, a stark reminder that aid is not free. In order to keep systems going, debt is repaid at the expense of education and health care. Calls to write off the debt are hollow when it is met with a fresh infusion of aid. We are trapped in a vicious cycle.

“In 2005, just weeks ahead the G8 conference that had Africa at the top of its agenda, the International Monetary Fund published a report entitled ‘Aid Will Not Lift Growth in Africa’. The report cautioned that governments, donors and campaigners should be more modest in their claims that increased aid will solve Africa’s problems. Despite such comments, no serious efforts have been made to wean Africa off this debilitating drug,” Moyo points out.

Obama might have good intentions but Africa, the sleeping giant of the world, needs to wake up and guard its assets: both human and natural resources. It needs to protect itself from the toxicity of foreign aid.


Cryptocurrency for Africans




George Gordon is on a quest to revolutionize the financial system. The director of Africa Master Blockchain Company talks digital currencies, blind risks and board games.

What is this new African cryptocurrency you are offering?

Where the majority of current digital currencies are based on speculative models, AfriUnion Coin (AUC) and the AfriNational Tokens (ANT)are designed for a transactional purpose allowing international payments, remittances, foreign direct investment as well as day-to-day transactions at local retail stores and other outlets. While the option for speculative trade is available with AUC, the focus is not around that.

Each African country will have a specially-designed ANT which will allow users to pay for goods and services and bills easily through completely digital means without requiring any bank account. AUC and ANT will be fully interchangeable to one another and there will be no fees for the user.

It’s the natural next step for digital finance from mobile banking which most Africans are accustomed to. The ability to freely have the power to send and receive money locally and internationally will allow the freedom of choice and spending power many Africans don’t have currently.

What is your own investment philosophy?

I am a gambler! I believe in taking risks and putting things on the line. That being said, blind risk or whimsical guesses don’t get you very far. Always acquire enough information to understand to a reasonable level what the thing you are planning on investing is or how it works and then trust your instinct and gut feel.

What advice would you give entrepreneurs wanting to invest in blockchain?

First, do some research in terms of what the blockchain technology is being applied for or created in terms of its application to an industry or project. Thereafter, check the white paper for the design of the platform as well as its functionality and applicability to what it is trying to achieve. If it aligns with your personal investment rules, then go for it,however, remember that blockchain is continuously evolving and thus you need to explore outside the usual and standard.

First cash-less, now card-less. What is the future of online banking?

If we are looking into what is currently science fiction, I would say the future is digital contact lenses that will be able to connect you to all your social media accounts, internet, news as well as make payments by just looking at QR codes or specialized barcodes to approve and accept payments.

Now, realistically we are not far off from such innovation and technology, but for the time being, I think the next step is scanning of QR codes at retailers and having the transaction automated from your wallet to the retailers digitally.

What is your most prized investment and why?

My mind. I believe that the work I have put into developing my mind, and continue to do so every day, is the number one investment that I have ever done. It allows me to look at things in a unique perspective as well as provides me with the tools to push boundaries and create new opportunities.

Money, success, fame? Which is most important to you?

I would have to say success… because it is most likely going to bring the other two as well, right? But success in the form of starting something and letting it grow and succeed and knowing that something new exists because of your efforts.

What do you spend your money on mostly?

Board games. I love board games and believe it’s a fantastic way to expand your mind as well as have fun with friends.

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Investment Guide

King Price CEO On Why He Invested On Insurance



King Price Insurance’s CEO Gideon Galloway, who built an insurance company in South Africa worth over $226 million in six years, talks investments, industry trends and how self-driving cars will change the entire car insurance landscape.


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Offering The American Dream



Gar Lippincott and Daniel Ryan of Atlantic American Partners were in South Africa recently looking for high-net-worth individuals wanting to invest in the US.

It’s a warm spring day in September, and Gar Lippincott and Daniel Ryan have just arrived in South Africa. It is Lippincott’s first time in the country, and he is jet-lagged.

A little over two months ago, he was booked to fly here from the United States (US) but was turned back at immigration.

“At Atlanta airport, the lady looked at Daniel’s visa and let him through and she looked at my visa and she said ‘I am afraid you can’t get on the plane because you have to have a blank page on your passport’. I said ‘I have three blank pages’ and she said ‘no, it’s supposed to be the one that says visa on it’. She said it’s the rules in South Africa so I had to sadly go back home… now when I was coming, I was told that’s not an issue anymore so I am happy they have made traveling into the country easier,” says Lippincott.

With a brand-new passport, he’s here with Ryan looking for people who want to invest in the US in exchange for a green card.

Lippincott, the Managing Partner of Atlantic American Partners, says he has always been keen on South Africa for its growth opportunities and prospects.

“From what I understand, the things that are causing short-term decline in the economy in South Africa are set up to provide long-term growth and hopefully people will understand this,” he says. Ryan, the company’s Managing Director of Emerging Markets – Africa, agrees: “I lived in Malawi for 12 years and South Africa is still considered the shining one throughout the continent. Even with all the problems, everyone still wants to come here because of the opportunities.”

According to an AfrAsia Bank report, South Africa comes second to Mauritius in boasting the highest number of high-net-worth individuals.

These are the kind of people Ryan and Lippincott target through their work at Atlantic American Partners. The company has real estate investors and professional private equity fund managers that manage money for banks, insurance companies, and pension funds. In addition, they help people get US green cards and ultimately US citizenship through the US government’s EB-5 Immigrant Investor Visa Program.

“Basically we look for people who want to move to the United States and we help them do so legally by investing and the nice thing is, with our program, they are also able to get a nice return on investment,” he says.

According to Lippincott, for a $500,000 investment that creates 10 jobs for American workers, you could get a green card in about two years and be a US citizen in about six or seven years. “Twenty seven countries have an investor visa program but with most of them, it’s essentially a fee you pay, or you need to be actively engaged in the day-to-day operation of a business. For example, you invest $1.5 million in Australia, but you need to hire employees and generate a certain amount of revenue. One of the biggest advantages with our program is you actually invest the $500,000 into a fund. We act as a trustee of that money and within five to seven years, they get that money back with a bit of return on investment and you are a permanent citizen in the US.”

Atlantic American Partners invests the money in real estate developments like hotels, apartments and student accommodation.

“What’s nice about the program is it doesn’t only cover the investor; it covers the spouse and children under 21. Our biggest family was a Hungarian family with seven children so they got nine green cards for $500,000,” says Lippincott.

The company says it has had positive response in South Africa. “Two months ago, we were here and we had scheduled six presentations for 100 people and we ended up speaking to 450 people. Most were business people, people worried about the economy, people worried about the political future of South Africa and people concerned about the education future of their children,” says Ryan.

According to Lippincott, despite the news of the clampdown on immigration, the US economy is booming and will perish without immigration. In the era of Donald Trump and his anti-immigrant views, that’s heartening news indeed.

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