Thanks, TAC, for embarrassing South Africa during the World Cup, while US vice president Joseph Biden was in town, under a balloon that said "the world is watching".

Marching upon the heavily fortified US consular compound opposite Sandton City in Johannesburg, the 5 000 protesters were incensed. Whipped up by the Treatment Action Campaign, the most prominent activist organisation on HIV/AIDS and other health-related issues, as well as the Congress of South African Trade Unions and Doctors Without Borders, the crowd had been told the world's biggest aid donor had reneged on its commitments.

"European governments and the USA are betraying their commitments to help fund HIV treatment in the world's poorest countries," quotes a Sapa report. "We will be marching to the US Consulate in Johannesburg to make United States President Barack Obama aware of the deaths that will result from his anti-treatment policies."

One might have thought such illustrious organisations would do a little research before inconveniencing others and making complete fools of themselves.

The fact is that the US President's Emergency Plan for AIDS Relief, or Pepfar, accounts for over 90% of all external funding for HIV treatment, care and prevention in South Africa. The fact is that Barack Obama has requested increases in the programmes budget for the next two years, and the 2011 request is the largest amount ever requested for the programme. The fact is that the number of people treated increased last year from about 1.6 million to nearly 2.5 million, and will continue to grow toward the program’s stated goal of more than 4 million under treatment.

So what are the protesters whining about?

They saw an item on e-TV which reported that the US was forsaking Pepfar in favour of the broader-based Global Health Initiative, and would cut Pepfar funding. The television station issued a retraction a few days later.

One might have thought organisations such as the TAC or Doctors Without Borders would have better information on which to base their campaigns than a single erroneous news report. So much for their credibility on AIDS-related matters.

One also might have thought these organisations would be grateful for the generous aid the United States continues to send to Africa, despite severe economic pressure back home, and act accordingly.

One might even have thought these organisations would look to the lack of leadership in South Africa's own government to find the proximate cause of the crisis proportions which the HIV/AIDS epidemic has assumed.

One probably would not expect that they'd stop to think that foreign aid, no matter its objective, inevitably perpetuates African poverty.

When there is a demand for something – be it food, healthcare, housing or chocolate bars – producers compete to supply this demand. Those that succeed, by delivering the best combination of quality, quantity and price, stand to profit. When foreign aid comes in to deliver these goods, however, it competes private producers out of the market (much like public subsidies do).

As a result, private capital goes elsewhere to look for a return on investment, and domestic capacity to produce the needed goods remains non-existent.

This means there will likely be a shortage again next year, and the year after that. Every year, aid will come in to "fill the gap", or "cover the shortfall", and by doing so, this aid guarantees that the shortfall will continue to exist, instead of being filled by domestic capital.

Take a famous example of a Canadian aid project in Lesotho. The aim was to strengthen domestic agriculture by helping farmers gain access to markets and develop modern farming methods. The farmers already had access to markets, however, and knew that their produce was uncompetitive as a result of Lesotho's poor agricultural conditions. In the end, the project succeeded only in developing roads that brought grain from South Africa into Lesotho and transported migrant labour back out. The few farmers that did exist were driven out of business. So much for developing domestic agriculture.

How much more harmful is the effect of aid in countries where greedy or power-hungry politicians embezzle aid money to fund wars or line their own pockets?

In some African countries, donor funding accounts for half the national budget. These countries have become entirely dependent on aid, and would collapse in a mire of war, disease, famine and death without the ongoing largesse of charitable foreigners. They're no better than children, dependent on the productivity of a parent for the means to live. Except it is worse, since unlike a child, they have no moral claim on donors, and do not eventually grow up and get a job.

Since 1950, the African continent has absorbed some $1 trillion in foreign aid. All of it was designed to alleviate poverty. Has it helped?

A detailed study of the subject by David Dollar, Craig Burnside and Paul Collier (2000), found that "aid has a positive impact on growth in developing countries with good fiscal, monetary, and trade policies but has little effect in the presence of poor policies."

Although not all interpretations agree, this really just says that poverty alleviation is not about aid, but about economic policy.

Five years ago, Nicky Oppenheimer, chairman of De Beers, gave a speech in London, in which he said: "Africa is much more than simply a handy metaphor for poverty and we do my continent a great injustice when we use it as such. Africa is much more than a palliative for those Western consciences pricked by sweeping generalisations of how much Africans need help."

Demanding aid is not only degrading, but it is actively destructive of domestic economies by diverting capital from where it is most needed and replacing it with a non-renewable resource: aid.

No, one does not expect the TAC, Cosatu and other NGOs to think this far. But one does expect basic civility. When, despite the economic reality of aid funding, generous contributions are offered to solve a specific crisis believed to have a particularly corrosive effect on Africa's productivity – namely HIV/AIDS – it is doubly disgraceful to bite the hand that feeds you.

I have a deep-seated belief in the capacity of people to take initiative, be productive, and build a prosperous future for themselves. I have seen this capacity at work all over the world, in both rich and poor countries. Therefore, it is sad to see half-wits at outfits like the TAC and Cosatu perpetuate the stereotype of Africans as helpless and pitiful beggars. First, they abjectly cry for help, and when it is offered, they demand ever more and denounce even the most generous donors on false grounds.

Ungrateful wretches! Have they no self-respect?

Next time, if you want to embarrass South Africa, just publish an advert in the Wall Street Journal:

Dear President Moneybags Obama,

In South Africa, we have TV, but they get the news wrong.

In South Africa, we're too lazy to double-check it.

In South Africa, we're gullible, stupid and we throw childish tantrums.

In South Africa, we cannot care for our own people.

In South Africa, only our self-loathing exceeds our greed.

In South Africa, we demand, we demand, we demand.

In South Africa, we despise our benefactors.

In South Africa, we're entitled to your money, because you're rich and we're not.

In South Africa, we blame everyone but ourselves.

In South Africa, we blame you, you callous murderer.

Ever your most abject and dependent servant,

South Africa

PS. Thanks for the half billion dollars. Send more.