Dutch Journal of Finance and Management

Dutch Journal of Finance and Management, 2025 - Volume 8 Issue 1, Article No: 35105
https://doi.org/10.55267/djfm/16364

Published Online: 13 May 2025

Views: 46 | Downloads: 32

The tendency of even wealthier African nations to over-rely on foreign aid, even if it exceeds the acceptable debt-to-GDP ratio of 40%, is the same tendency that has affected the effective utilisation of Africa’s natural wealth to attain economic independence. It is the same tendency that frustrates the creation of an environment that inspires private sector businesses to meaningfully contribute to the improvement of Africa’s economic self-sufficiency. To respond to such dynamics, this study uses integrative review as a qualitative research method to offer a critical analysis of Africa’s economic independence challenges and debates as instigated in recent days by Donald Trump’s closure of USAID (United States Agency for International Development) and termination of American aid and financial support to several developing countries. Through such analysis, the study aims to discern the strategies that can be adopted for reducing Africa’s over-reliance on foreign aid whilst also bolstering its economic independence. While striving to attain economic independence, results from integrative review revealed Africa to face conflicting situations and paradoxes of having to balance decolonisation quests with over- reliance on foreign aid for economic development. Africa also experiences paradoxes of undertaking meaningful economic investment vis-à-vis quests of keeping away self-serving interests and temptations like corruption. It further faces difficulties of serving selfish political interests instigating instabilities vis-à-vis quests of enhancing economic sustainability and independence. Combined with poor governance, controls and conflicts of politicizing state support to private sector businesses vis-à-vis quests of seeking to grow a vibrant private sector, these create a paradox that African leaders must deal with if they are to seamlessly sail to economic freedom. Given these findings, the paper proposes that while mitigating the politicization of state support to private sector businesses, African governments must prioritize the provision of unfettered private sector support. African governments should also harness revenues generated from their vast natural resources’ exploitation to diversify into economic sectors and industries that they have weaknesses. This would create economic linkages that boost intra-Africa economic activities, productivity and growth to spur Africa to the desired state of economic independence.

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