The Healthy Turn From Aid to Investment: Can Investment Act as Plan B for Aid?
Ehizuelen Michael Mitchell Omoruyi1* Lepholisa Ntsane Reginald2 Munyao Esther Mutindi3 Zhou Lingxi4 Toumaniba Traore5
1.Institute of African Studies, Zhejiang Normal University, China 2.International MBA, College of Economics and Management, Zhejiang Normal University 3.Human Resource Management MBA, College of Economics and Management, Zhejiang Normal University 4.Sociology College of Law and Political Science, Zhejiang Normal University 5.Foreign Linguistics and Applied Linguistics, College of Foreign Languages, Zhejiang Normal University
Introduction
Africa received $42 billion in development assistance in 2013, well behind foreign direct investment: $57 billion. For decades now, Development assistance has been ineffective to all its recipients hence calling for or proposing investment as plan B. Official Development Assistance (ODA) plays an essential role as a complement to other sources of financing for development, especially in those countries with the least capacity to attract private direct investment. We recognize that a substantial increase in ODA and other resources will be required if developing countries are to achieve the internationally agreed development goals and objectives, including those contained in the Millennium Declaration” (UNDESA 2002).
On taking a U-turn from Aid to investment, the major goal is to propose bespoke strategies of converting current development assistance into an investment which can help the poorest countries escape the dependency trap of aid. We argue that investment will help reduce poverty and increase economic growth in the developing countries as evidenced by Ethiopia and Kenya growth patterns (The Economist 2016).
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