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In the past fifty years, more than $1 trillion in development-related aid has been transferred from rich countries to Africa. Has this improved the lives of Africans? No. In fact the recipients of this aid are not better off as a result of it, but worse—much worse. This is said by Ms Dambisa Moyo who grew up in Zambia. Her training in economics took her from the World Bank to Harvard and on to Oxford, where she obtained her doctorate. She spent eight successful years at Goldman Sachs as the Head of Economic Research and Strategy for Sub-Saharan Africa.

In her book Dead Aid, Dambisa Moyo describes a sharp contrast between African countries that have rejected the aid route and prospered versus others that have become aid-dependent and seen poverty increase. Moyo shows how overreliance on aid has trapped developing nations in a vicious circle of aid dependency, corruption, market distortion, and further poverty, leaving them with nothing but the “need” for more aid.

Dambiso Moyo visited Rwanda recently, a country with a budget which is at least 70 per cent dependent on foreign aid. She wrote about her trip in Financial Times on February 28. Excerpts:

In the evening at the Novotel (in Rwanda), I address a meeting, hosted by the country’s prime minister, of 200 eminent Rwandans about some of the ideas from my book about how to develop long-term sustainable growth independent of foreign aid. I am told by more than one guest, “You are preaching to the converted”.

It turns out that the president and his government are about to go on a week-long retreat to a town in western Rwanda to discuss the country’s development strategy, and a key item on the agenda will be how to wean the country off aid.

Following (president) Kagame’s lead, Rwanda is already obsessed with turning the “no-aid” development theory into a reality. This is not to say that the country does not use aid, nor that all of the country’s aid programmes have been wholly ineffective (some argue that the country has managed to eradicate malaria using aid programmes). But the fact that Rwanda’s leadership is actively making strides away from aid dependency is a clear acknowledgement that they feel, as I do, that engagement with the markets is the proper way to deliver long-term growth and to reduce poverty.

What, I ask, infuriates the president about aid? As we talk it becomes clear that it is a combination of two things. First, not wanting to be bossed around and told what to do by foreign bureaucrats. Second, that with aid dependency comes a loss of dignity, damage to entrepreneurship, and a decrease in innovation: all factors critical to any society’s long-term economic success.

So what is Dambisa Moyo suggesting as a viable, sustainable and long term solution? Trade not aid; business development and an environment conducive to that. Does that work? Well, compare Tanzania and Kenya versus Singapore and Taiwan over the last 50 years; aid route versus trade route. Does it mean that aid is always wrong? Of course not, but it is overrated as a universal remedy.