Friday, Oct 19, 2018
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Squandered aid


The collapse of the Southern Africa Enterprise Development Fund, taking down with it at least $80 million in U.S. aid, has broad implications for American involvement overseas.

The fund was supposed to provide seed money for enterprises in 11 countries of southern Africa in fields that included communications, finance, manufacturing, and tourism. Half of its money was to go to South Africa.

Fund projects fell victim to insider dealings, bad management, and an apparent lack of oversight by the U.S. Agency for International Development (USAID). The fund’s original $80 million had dropped to $48 million by 2009. Its value is now estimated at less than $18 million, which could lead to its demise.

Congress has never been enthusiastic about funding USAID’s work, and is even less so now with the budget sequester. Yet aid to needy countries remains important to overall U.S. foreign policy. This scandal calls into question USAID’s ability to manage anything.

It would probably have been hard to clean up the Africa fund, given its antecedents and its well-connected inside players. But the failure of the Clinton, Bush, and Obama administrations to do so over two decades risks the future of the entire U.S. foreign aid program.

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