A group of 8 wealthiest nations will be meeting this week to discuss issues that impede their wealth creation strategies. Top on the agenda will be climate change, subsidies and international trade and African poverty. In order to increase awareness on misperceived African poverty, Rock Star ‘economists’ are at it again 20 years after raising money on famine in Africa. Once more African musicians were given token recognition by the Live-8 organizers, a pure indication of the rich nation’s mindset about Africa. The international commotion in the name of the poor has left analysts questioning the sincerity behind the whole show. Just what is the African problem?
Africa suffers from artificial poverty caused by negative publicity in the developed countries that scare away potential investors to the continent. Africa’s poverty is also due to bad policies that restrict people in the continent from exchanging commodities amongst themselves. Many countries in Africa use agricultural boards to regulate agricultural activity which in the long run discourage farming outputs. Wealthy nations protect their farming populations through agricultural subsidies which in turn rob the continent an estimated $ 2 billion annually.
With a colonial mindset that restricted African entrepreneurship, African governments have criminalized local entrepreneurship that is locked up in small businesses and what is popularly known as hawking thereby sustaining Africans in the informal sector. The African business climate is unpredictable, contracts are difficult to enforce due to inefficient judiciary and high levels of insecurity.
High level corruption in Africa is fuelled by aid money from wealthy nations. To cover up for this fact, developed country media address the corruption issue by implying that African leadership is genetically corrupt! Corruption in Africa is not an individual issue; it is a process, a systematic issue that can only be addressed by discouraging the incentive behind it.
Part of the incentive is in the developed nations’ willingness to bank all the stolen loot from Africa. The begging bowl approach by the African leadership fuels this vice because they approach the gl! obal bargaining table from the point of weakness and not strength. Does Africa need rock stars and the G-8 to fix these problems? Absolutely not!
First of all Africa must recognize that she is not a poor continent. Africa is rich in subsurface wealth that range from oil, uranium, and diamonds among others. Democratic Republic of Congo alone can feed the whole continent and export the surplus to rich countries.
Africa has a huge market of 800 million people struggling in poverty s! imply because their governments’ allegiance to their former colonial masters makes it difficult to enact a uniform business oriented legislation that will make it easy for entrepreneurs to spring up and address the demands of this market. The African potential of the women and youth is yet to be tapped. The continent offers a huge potential to problem solvers but as Norman Boularg a Nobel Laureate in Economics once pointed out, ‘One can not eat potential.’
So what is the G-8 and Rock Stars’ erroneous belief that Africa is the ‘Scar of the World’ likely to achieve in remedying the situation? Very little. They have good intentions to help, but all they will achieve will be to perpetuate the notion that Africa is poor, self destructive and has leaders that are despotic. The summiteers will then proceed to write off the debts of this ‘African despots’ and double the amount of aid to them.
Each country will be treated individually reversing the gains that Africa was already making in trying to create one huge continental market through outfits such as Africa Union, New Partnership for Africa’s Development, East African Community, Economic Community of West African States, Common Market for Eastern and Southern Africa, and Southern African Development Community. The wealthy nations on the other hand will achieve the objective of appearing to care for the poor, create jobs for their consultants (that take close to 60% of aid money), get allies against war on terror and perhaps satisfy the craving for dominance.
The integrity of the G-8 members is at stake. The World is watching to see how they proceed to reinforce the rule of law by making it difficult for any person who loots African wealth from keeping the same in the wealth nations’ backyard. The World welcomes the debt relief gesture but would wish to receive an audit report to determine exactly who owed who money!
Let the world know that debt relief is the euphemism of accepting the failure of World Bank, and International Monetary Fund policies in poor countries. It will cost Africans very little to institutionalize rule of law, property rights system and a sound business environment. Africans do not need aid to stop them from being corrupt. The rich nations on their part must give Africa a fair hearing by not swamping her people with only negative portraits of the continent.
Africans can make poverty history by owning the African problem. What the African people ought to recognize is the fact that economies do not grow by one addressing only the demands of his village. African investors must look beyond the horizon. The African leadership should facilitate the local investors’ ability to expand by opening up their borders to enable Africans travel freely and invest in the continent. More emphasis must be placed on the business climate in the continent, and efforts made to increase security for the African people.
Developed nations that opt for aid as a form of assistance should be welcomed to trade in the subsurface wealth instead of using wars to achieve the same goal. By trading its wealth, Africans will be able to take care of the health of their citizens, improve their infrastructure and provide clean water to its citizens.
*Shikwati is the director of Inter Region Economic Network based in Nairobi, Kenya.