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IPFS News Link • Africa: On the Map

Africa Doesn't Need More Government Aid; It Needs Free Markets

• Mises

Analysts are conceding that Africa's outlook is gloomy because the region is on track to miss poverty reduction goals. Successive African administrations have consulted multiple strategies to tackle the scourge of poverty with varying degrees of success; however, the plague of poverty has been persistent.

Combatting poverty in Africa is indeed a daunting task since some countries have yet to overcome geographical and environmental limitations. For example, the ravaging effects of the tsetse fly on the food market amount to an annual loss of $5 billion. Achieving developmental targets becomes even more elusive when corruption is added to the stew of problems. Corruption hampers growth by limiting the efficiency of institutions and discouraging foreign direct investment.

Corrupt states foster incentives for entrepreneurs to use wealth as leverage to manipulate government policy and the legal system to favor their interests. Such arrangements benefit a few people, but the costs are widely diffused throughout society. When political cronies are favored by government policy, the implication is that more innovative companies are marginalized, thereby lowering growth and decreasing consumer utility. The $7 billion that Nigeria loses yearly due to the corruption and inefficiency of its ports is critical to the narrative undergirding, according to a 2022 anticorruption report.


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