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Every year, governments and individuals donate huge sums of money to the African continent with the intent to solve poverty. But if all that foreign aid worked, Africa would’ve been the richest continent on Earth, according to Senegalese entrepreneur Magatte Wade.

Wade’s video on PragerU about how foreign aid has kept Africa poor blew my mind. As someone who would donate $20 every week to charities like Against Malaria Foundation or WaterAid, I was thinking that my dollars were contributing to a better future for the struggling people of Africa. Instead, Wade has shown us that our donated dollars were contributing to poverty in that country.

For cities like Dakar, Senegal, you’ll find that the city is filled with foreign residents working for the UN, various NGOs, and embassies. These foreign residents are aid workers living in a parallel economy that many Senegalese people observe from the outside. The luxury life they live is all funded by the aid money provided by governments and individual donors. Wade even published a video about it here.

While libertarians and other people think that bringing a flood of high-income workers to an area is a great thing for those communities, the reality is that it’s not. These NGOs and other organizations have so much money that they cause the price of housing and basic services to soar. All the wealth they bring to these local economies doesn’t get distributed much to the middle and lower classes.

Furthermore, these non-profits aren’t productive. They spend their days making research reports, distributing donated items, and hosting lavish parties. With their big budgets, they also poach their best and brightest talents and have them do paper-pushing bureaucratic jobs. The potential these locally talented people have gets wasted in these organizations. All their skills aren’t being put to building businesses, innovating solutions, or creating any sort of real economic value.

Going back to when I discussed how workers at these NGOs distribute donated items, the work these NGOs do has destroyed local markets and created a dependency cycle among the locals. Many don’t realize that when they donate clothes, buy mosquito nets, or build wells for villages, the local merchants who provide those products and services go bankrupt.

Regarding hunger, all the food donated to Africa takes away an opportunity for local farmers to make a living. As these farmers abandon their farms, the farmland doesn’t get taken care of, and the continent becomes even more dependent on the outside world for food. Some corrupt government officials even take the food aid and sell the food below market prices as a way to make more money, not realizing it hurts farmers who need to sell that same food to make a living.

When we think of all the successful economies in the world, from the US to the UK, to Saudi Arabia, to Singapore, to Japan, and so on, they all developed through trade, not handouts. By removing foreign aid to Africa, we are giving Africa a fair opportunity to compete and grow. The entrepreneurs on the continent will be given a fair opportunity to build a business, and their success will help bring more employment and wealth to their communities.

At the same time, by removing foreign aid, governments around the world are no longer financing governments whose policies have been the principal cause of their countries’ impoverishment. Without foreign aid, many of the countries that have immense trade barriers, price controls, nationalized industries, bad monetary policies, etc., wouldn’t be able to maintain support from the public for those bad policies.

How I plan to be generous going forward

Instead of donating to charities that steal business opportunities from local merchants (i.e. mosquito net providers, food providers), I will focus more on helping out my local community.

One way of helping my local community is to be generous with tipping when dining at a local restaurant. Not only am I giving business to a local restaurant, but the generous tip I give my server can help them get money to pay for their school tuition, diapers or food for their children, or gas for the week.

I wrote more about how tipping beats donating mosquito nets below:

Another way of being generous is to buy products from African companies and either buy them as a way to improve my life or as gifts to others. By buying products from Africa instead of giving wells and mosquito nets, we are helping African entrepreneurs grow their businesses. Their success is what will help Africa become prosperous in the future.

If you’re looking for African products to buy, consider checking out African Imports. There are many great products there like dresses, goat milk soap, and more.

There are also African grocery stores that sell spices, herbs, and other food products imported from African nations. Some of my friends from Nigeria, Burkina Faso, Namibia, and West Senegal buy their groceries from there to make their signature African dishes.

Conclusion

Overall, the generosity I plan to do going forward has to be something that either helps my local community or helps African entrepreneurs thrive. I hope this post has given you insights into the negative effects that our good deeds have had on the people we want to help.

At the same time, I hope that we will see more countries choose to cut foreign aid as a way to help push the continent to adopt free market policies. It’s time to break the dependency cycle and to give entrepreneurs on the continent a fair opportunity to build out their businesses.

In the meantime, I’m admiring the natural wonders that the continent has to offer. Check out these photos below!

The countries where each photo was taken:

1. South Africa

2. Namibia

3. Morocco

4. Mauritius