Best gift to Africa? Letting it help itself

JUST over 20 years ago, American Express had an idea that changed the world. Every time someone used its credit card, it donated one cent to charity, thus linking its product to a good cause. The result was an explosion of profit.

Its link with the Statue of Liberty restoration appeal sent its credit card usage soaring by 28%, ensuring AmEx recouped far more than it gave away. This act of commercial genius was given a name: cause-related marketing.

Give a little to charity, get a lot of kudos - it's a seductive win-win equation which has been adopted world over. And we can see this theory at work today when politicians, needing a reputation lift, head so quickly to Africa.

The secret of cause-related marketing is proportion. The act of fundraising creates a profile far greater than the good actually being done; but the target audience is often more interested in the idea of helping a good cause than doing any sums.

Tesco, for example, is now in the 14th year of its computers-for-schools scheme, where shoppers are issued one voucher for every 10 spent. This is given to children, who give it to teachers, whose schools redeem the vouchers for computer equipment.

What they don't tell you at the checkout is that each voucher is worth just under 3p and that it would take the average shopper 93 years of loyalty to Tesco (that is, 210,000 of spending) to collect enough tokens for just one school notebook computer.

Parents implored to join the scheme would benefit the school more by posting a fiver to the headmaster, and shopping where they like. But instead, vouchers are collected with hardly any idea of their real worth: the attraction lies in the spirit of giving.

The genius of the Tesco scheme is the feelgood factor. When asked "are you collecting vouchers" by the cashier, shoppers can feel civic pride by saying that they are. Aunties put them aside for their nieces, who have fun collecting them. Every little helps.

This brings us to Africa, where the echoes of cause-related marketing can be heard while Gordon Brown noisily rattles the African charity box around the world. Subliminally, we may associate him with good causes just as we do the lottery.

This is not to say that the Chancellor lacks a genuine desire to help Africa. Like the Tesco vouchers, it is a scheme which - to achieve the maximum effect - must be carried out in ignorance of the true economics at play.

This is the aid versus trade debate. Trading with Africa has no role for politicians - other than for them to get out of the way. It is the most effective way to help, and has allowed India and China to make more progress on poverty than at any time in history.

Aid, by contrast, gives politicians a starring role. It can lend a moral dimension to governments, which is often sorely lacking (especially after an illegal war). And if it is done with enough pizzazz, it can divert attention away from their own failings at home.

Jack McConnell, for example, has come back from Malawi - where he found the money he is entrusted with can go far further. Back home, his record spending has meant record homelessness - and soaring hospital waiting lists.

The First Minister was out of the country when it emerged that the average hospital wait in Scotland is now a record 15 weeks - up a staggering 11 days this year so far. No matter how much money he's given, he just can't seem to crack it.

Little wonder he's calling for Scotland to "raise our heads" to Africa - so the nation's attention comes off his dismal failure to look after the most vulnerable in his own country. Here stands a man in sore need of a public relations boost.

Unlike McConnell, Tony Blair and Brown are both paid to look after Africa - though both clever enough to realise that their agenda has more than a touch of the Tesco about it.

First, the Chancellor is promising to give 0.7% of the national wealth in donations. This was a pledge which the Heath government committed Britain to in 1970 - and Brown says he won't even hit this generation-old target until 2013.

A maximum of noise is being made with the minimum amount of cost: cause-related marketing at its best. Next, we can ask how much money will go to Africa. The Chancellor wants a scheme to give more aid now, and less later - raising 30bn.

However, Africa's main problem is not poverty, but dictators - whose grip is often strengthened by debt cancellation or large cash donations. The real problem is that countries cannot generate wealth for themselves, and this will not be solved by handouts from the West.

The economic vandalism of Robert Mugabe in Zimbabwe has already destroyed more wealth in five years than Britain had given to the whole of Africa since 1945. Against such odds, it is far from clear what a new era of handouts can achieve.

There is a positive story in Africa - but, tragically for cause-related marketing, it's one that involves no politicians or charities. Earlier this month, the Africa Economic Outlook projected economic growth of 5% - twice the speed of Britain's.

Foreign investment, which now dwarfs aid in developing countries, is paying off. Trade is entrenching stability and wealth - without any help from politicians. It is a formula which, with a little help, could allow Africa to find the answer itself.

Oxfam calculates that if Africa could increase its share of world trade by 1%, it would be worth 45bn a year - more than Brown hopes to raise by his convoluted International Finance Facility scheme. So this is the real prize.

To achieve it requires tearing up the Common Agricultural Policy (CAP), a scandalous European Union scheme which keeps Africa on its knees by denying it free access to Western markets while protecting Western farmers.

The Institute for International Economics estimates 200 million people can be lifted out of poverty in developing countries if only politicians allowed the West to trade freely - and buy from African farmers the kind of produce they are ready and able to sell cheaply.

The United Nations estimates that the abolition of tariffs would increase trade by 400m a year - that is, 14 times today's aid. But it means upsetting the carefully balanced protectionist system. For Europe's politicians, this is beyond the pale.

So at the G8 summit, the message to Africa will be "sorry, we're not going to trade freely with you, it would upset the political authorities in Brussels too much. But here's a cheque to buy a water well, and a few nutrition biscuits".

Not that we will hear this message at Gleneagles. It will be drowned out by a jamboree of pop stars and protesters wearing special wristbands. In this way, the Africa agenda is a great example of cause-related marketing for the UK government.

But all this is a woeful substitute for what Africa truly requires. Africa is growing, and desperate to trade fairly with us. To abolish the CAP would be a true step towards making poverty history. Anything else will be little more than conscience money.