A Muslim woman walks past an ancient door on the Indian Ocean Island of Zanzibar in Tanzania. (Reuters/Thomas Mukoya.)
This is the third of several blog posts written from Dar es Salaam and Morogoro, Tanzania. I’m visiting Tanzania thanks to CARE USA, which has paid for my trip with the help of a grant from the Bill and Melinda Gates Foundation. Its purpose, for me at least, is to explore one country’s need for humanitarian aid and development assistance and to examine America’s political will and commitment to deliver on its promises.
Today’s lesson from Tanzania is about bang for the buck.
Here’s a good way to think about the minuscule cost of US and other foreign aid, humanitarian and otherwise, to the developing countries. The cost of keeping just thirty-three American soldiers in Afghanistan, at $1 million each for a year, is $33 million. Compare that to the total assets of more than 170,000 separate and distinct Village Savings and Loan Associations (VSLAs) and other microfinance groups in Africa, spread among forty countries and serving nearly 3.8 million people, mostly women: $33,494,000.
Nor is that $33 million “foreign aid,” in any sense. Thanks to the work of groups such as CARE, Catholic Relief Services, Oxfam, Pact, Plan International, World Vision and a handful of others, who’ve worked since 1991 to help set up VSLA-style groups across Africa, literally millions of people, mostly women, have been able to pool their meager resources, a few dollars at a time, to create what amount to mini-banks in village after village, including many in remote and underserved areas where no bank can reach. Usually, each VSLA serves a couple of dozen women who can borrow small amounts of cash for food, to help start a home-based business, to pay for children’s schooling, and other needs. And, as shown by a report from CARE, “Closing the Gap 2011: Microfinance in Africa,” there are non-financial benefits to a VSLA, too:
Members frequently turn to the [VSLA] as a solidarity group, a place where they can come for counsel in stressful times. It is a place where women, especially, can develop leadership skills and realize the amorphous concept of empowerment. The group might also become an advocate for social change and community development. Altogether the [VSLA] provides a social safety net form which members and non-members alike can benefit.
If you’re interested in learning how VSLAs work, and getting some data on their effects, you can read CARE’s whole report.
But the point here is that these mini-banks, serving just a handful of women who start them up and manage them, do a vast amount of good, for very little. The NGOs that start them up, train women (and some men) to create and manage them, and help them stay up and running until they become self-sustaining can do it all for just $26 per person who gets involved. Maybe the math doesn’t quite work, but that means that 4 million people who suddenly have access to life-saving loans can be set up and maintained for about $100 million. That’s the cost of keeping 100 soldiers in Afghanistan for one year. You do the math: President Obama is bringing home 33,000 troops by 2014, which is roughly $33 billion worth. That much money could do a lot of good in Tanzania and elsewhere. Why not spend it?
Even a few days in Tanzania shows why it’s needed. No doubt few Americans have given a moment’s thought to this sprawling East African nation, home to more than 40 million people, at least not since 1998, when Al Qaeda bombed the US embassies in Nairobi and Dar es Salaam. But its needs are vast, and I’ve pointed out in this weeks series of letters from Tanzania, the private sector is not going to fix it.