Right now I am up in Tamale working with the ADVANCE office here.  I am meeting with maize farmers to help them think about how to invest in yellow maize production.  There is a financial institution that is providing credit to farmers in an effort to spur investment in yellow maize and soya beans.  They are offering a loan facility at 18% annual interest, which is much lower than the typical 30% that financial institutions offer for agriculture loans.  Being up here, I have had the chance to see the destructive power of non-government organizations, otherwise known as NGOs.

I have only been here for a few days, but I have colleagues that have been here for months and have been able to talk to them at length about the challenge of using a market facilitation approach in a city that has been described to me as the “NGO capital of the world.”  In a post on the subject, a friend and colleague working with Engineers Without Borders describes it well:

Tamale is the NGO capital of Ghana, with a disgusting and disproportionate number of signposts, land cruisers, air conditioned offices with generators, and hotels with conference centers. I think that pretty much every possible permutation of the words sustainable, community, rural, development has been used to create an NGO acronym.

At a practical level, there is a serious crowding of NGOs who are doing agriculture work, and even more specifically those taking a Value Chains or Market Facilitation approach. I’ve had a chance to participate in 3-4 different forums/workshops that involve different projects with similar philosophies, and even sat around the table during a discussion on collaboration between 3 projects and 1 “private” sector aggregator. I use quotations because there is a growing number of businesses which have been targeted by projects like ADVANCE, whose core business is slipping from profit through sales, to money through grants, trainings, per-diems and the like.

In fact, I was supposed to meet with a maize nucleus farmer (someone who has a large farm and buys from smallholder farms, provides them with financing to pay for seeds and inputs, and sells the produce to a buyer), but he is unable to meet on Saturday (my birthday) because he is attending a course on “NGO Management.”  There is so much free money in the system that the market is completely distorted.

When NGOs work with companies in the sector here, giving away things for free – mechanization, fertilizer, seeds, technical assistance – there is no incentive for the private sector to become involved because they will automatically be priced out of the market.  I caught a ride home from the office today on the back of a motorbike driven by a guy who manages the Youth Employment Services division of the local government.  He pointed out a particularly nice house on the road, and said that the owner is a guy from San Jose, California.  He works for the US government and is in charge of planning for the district government in Tamale.  Someone from the US is in charge of planning for the local government in Tamale.  The NGO culture and involvement in the private sector agriculture industry here is so pervasive that it makes it practically impossible to get anything done.

Tamale is the kind of place Dambisa Moyo and Bill Easterly are talking about when they say “See what I mean?”  It is a place of good intentions gone awry.  And until the level of NGO involvement is ratcheted down, it will be difficult to make real systemic change occur.  My personal opinion is that the level of NGO involvement here is at best keeping the northern region in a state of atrophy in terms of market competitiveness.  There are some good people doing good work here.  But, on balance, the distorting forces created by a culture where everything is given away for free means makes people dependent on the system that has been created.  It is a self-fulfilling prophecy that keeps the hotel industry and land cruiser dealers in business.

I think real systemic change will occur when NGOs are no longer necessary.  And, unfortunately, when it does happen, it won’t be due to the good work of the NGOs.


Josh

"Josh Weinstein is a visionary. I read his blog every day." - Bono

2 thoughts on “The Scourge of NGOs”

Ed Center · April 4, 2011 at 12:49 pm

This insight then begs the question; why are you working for an NGO in Ghana?

I have a friend in Cambodia who went to an excellent school that provides education and job skills to street kids. The thing is, he isn’t a street kid. He lied so that he could get a better education than is offered in the sad public school system. There are some excellent NGOs in Cambodia, particularly in education and heath, but does this cluttered network take the onus off the government and private sector to teach and care for the people? Do foreign NGOs crowd the space that local public and private sectors should occupy? Or without these NGOs, would my friend have gotten a crappy education? Without NGOs, do more babies die and more people go ignorant?

And what is the strategy when the answer to all these questions seems to be yes?

Joshua Weinstein · April 4, 2011 at 4:16 pm

Hey Ed – thanks as always for your great insight. You are absolutely right. What I should have specified and didn’t is that NGOs engaged in economic development specifically often cause more harm than good. This is the whole argument behind microfinance. When you give money away for free, with no repercussions for mishandling/misusing the money, then nobody feels the impetus to repay. That is why government-backed microfinance almost always fails – because the expectation is that the money tree will always grow back. In agriculture, you see this effect compounded because it is NGOs getting directly involved in a sector that employs 90% of the population of a region of a country. So the prevalence of free money in the system makes it very difficult for a private sector to flourish, and keeps the system in a state of dependency.

That said, with education, healthcare, and food security (when people are going hungry, which should never happen, since there is actually more than enough food in the world to feed everyone), NGOs can do fantastic work. They provide a need where there is a deficiency in providing services. Here, NGOs aren’t the problem. I would say the problem is governance. 50% of cambodia’s budget comes from foreign aid. So, for these kind of societal systemic problems, I think the problem is corruption in government.

I think the NGOs like the one you mentioned are providing something invaluable, critical, and so necessary. As for the question of why I work for an NGO – to be fair, I’m working on a project that does not give money and tries to strengthen the private sector by helping business-minded firms. But, to be honest, you hit the nail on the head. I am working for an NGO. So it does beg the question…

Always appreciate your thoughts – keep em coming.

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