Is Africa Really Taking Off?

I am a keen student of economic development and transformation and therefore tries to figure out time and again where the growth of regions and nations will come from. Four years ago, it became clear that the world economy could not run entirely on US and European strength as the economic crisis devastated large firms. This also led to unemployment that has hardly been wound down in the US and a majority of European countries. This episode led analysts to look elsewhere and the rise of the BRICs became even more salient. Apart from that, it is clear that the new economic story is that sub-Saharan African nations have been leading in growth with six nations being among the top 10 fastest growing economies in the world in the last decade.

The business and economics press has understandably been stating that a continent once considered completely hopeless seems to have found its feet with impressive GDP growth rates ranging from 5-10% annually for most of these countries in Africa. Writing in Slate Magazine here, Francis Njubi Nesbitt  reiterates the story of emerging Africa and isolates a select number of countries that have done dine very well over the period being reviewed. It is no doubt that everyone is glad to applaud the progress made and to consider that Africa seems to be confounding the pundits. To my mind, it is at such moments that scholars and analysts should be cautious and circumspect.I state four main reasons below.

First, it is clear that the nations of the continent have benefited substantially from the commodities export boom that coincided with this period. It is clear that this is not the exclusive factor alone that has not driven the growth but it is worth stating that the momentum from higher commodity prices has been helpful. For that reason, there is need to be cautious because commodity booms do not last and increased expansion of prospecting for natural resources or expanded acreage in agriculture will reduce returns over the medium term. Except for the countries with a broad economic base (few in Africa have attained this), this growth momentum is still at risk.

Secondly, looking at the historical record, many African nations have had spurts of growth of this nature before. The main problem is that only Mauritius and Botswana have managed medium growth rates for more than one decade. As the report by the Commission on Growth and Development confirms, attaining high rates of growth on its own is difficult though momentarily possible but keeping high growth rates for a long period is historically rare throughout the world. It is not clear to me that the growth for many of these countries has a sufficiently diverse base to ensure that transformation will continue to occur. Credit to the economic managers of sub-Saharan Africa for getting growth up but I see no fundamental reasons that it will endures for throughout the entire set of individual nations.

The third factor straddles the nature of governments and how these will affect the required reforms in African nations. Bearing in mind that many sub-Saharan countries are not fully developed as democracies, there remains a big risk that their full development will continue. This is a critical factor because Ghana and South Africa are exceptions as structured democracies while most of Africa remains in a that half-way place between democracy and autocratic regimes. tThe nature of government remains a big political risk for most of these nations and the stability of regimes is not a given yet.

Finally, my assessment is that the growth that has taken place in sub-Saharan Africa proves that economic reforms undertaken in the mid-1990s and early part of this century were needed. A second phase of deregulation and economic reform to generate efficiency is required to keep the growth momentum going. tThis means that the benefits generated by reforms of one decade ago will be exhausted and will need to be buttressed by a set of reforms including trade liberalization, reduction of tariffs, competition policy enforcement,  increased transparency and public sector reforms. Given the nature of politicians that rule the continent today and the fact that growth has happened, it probably will take another crisis for the second gear of reforms to be engaged. For a continent led by populist leaders, making these bold and politically risky refroms will cause significant discomfort.

Looking at these four reasons, one urges a more incisive diagnosis of sub-Saharan Africa. It is too early to make the claim that the nations of this continent have emerged as future powers. oOf concern to me is the hubris of the leadership, disdain for different views and the talking up of the whole continent by both international and local press. The continent is not out of the woods yet and is certainly not at the same level as Asia. There's more work for its people to do. pPerhaps the savvy leaders should start with some reading of the Growth Commission's Report.    

Recommended Reading for Some African Leaders

A number of nations on the African continent have been independent for half a century now. In that time, very few of these nations have had an unbroken series of hand over of political authority. Also instructive is that a good number of the individuals with economic clout have an existing or past connection with the governments. Daron Acemoglu and James Robinson have a book that explains by trawling through history how and why societies have generated economic prosperity and political stability. In their view, societies are either extractive or inclusive. Extractive societies are those in which political institutions channel power and wealth from the majority towards the minority while inclusive institutions exist where there is pluralism that allows for participation in public affairs and reduces monopoly in both markets or political power.

"However, in most cases of sub-Saharan Africa and many in Asia, the post-independence governments simply took a page out of Robert Michel's book and repeated and intensified the abuses of their predecessors, often severely narrowing the distribution of political power, dismantling constraints, and undermining the already meager incentives that economic institutions provided for investment and economic progress."  In, Why Nations Fail, Pages 112-113.

  

Africa's Tweet Data Means Nothing

It is a well-known that due to the availability of digital technology, there is a surfeit of data that represent human behaviour than ever. And yet the availability of vast amounts of data does not mean that it is necessarily more accessible or comprehensible. For instance, Portland, a firm that tracks technology uses has presented the results of its research in a chart appearing in image on this post and appearing on this datablog by Simon Rogers of the Guardian. The chart presents data on the the volume of Twitter messages sent within African countries. As is possible the image looks neat but I am certain that the chart tells the casual observer virtually nothing except that it was prepared by a person who does not understand the data that was collected.

To start with, there is a diversity of countries in Africa and so presentation of the absolute numbers is useful. However, there are number of school boy errors that emerge from that presentation. First, the placement of the data side by side invites comparisons among countries and creates the ranking system that the developers of the charts displays. This ranking is not possible because of the differences in population among these countries. Second, given the failure to account for the populations differences that are truly vast, the data cannot provide information that the heading of the chart purports. This second error may not be the fault of the data collectors but I suspect that the Guardian's data editors would spot this. The volume of messages are definitely provided by a different number of people in each country.  

Contrasting Income Growth for Africa and Asia

Keen observers of the growth trajectories of countries cannot help noticing that apart from the larger economies in Asia, sub-saharan africa has registered unprecedented growth levels in the last decade. The argument is relevant because one of the major problems that the latter region has had is the inability to hold on to an upward growth momentum for meaningful periods of time. Instead, Africa's example has been fluctuations of growth rates that coincide with commodity price changes. The summary of this experience from the mid-1970s is that dependence of petroleum and agriculture-based commodities is not a reliable path to growth and improvement of welfare. 

And that's why the contention is that it is yet not possible to state with confidence that sub-saharan Africa has overcome the mix of economic and political problems that it faces. That brings me to this fascinating article in the East African which makes the credible and well-based claim that the countries in the eastern region of africa will be leaders in overall growth in the coming two decades. It is an article worthy of reading because it is based on a complicated but sensible method for assessment of the complexity of an economy and concludes that the countries of the region under reference have economies that are more complex and diverse in production than is warranted by the incomes today. 

The author of the article concentrates on a list of manufacturing firms to illustrate the claim derived from the index of complexity. it is less clear to me that all these firms confer a comparative advantage to the region because it is unlikely that all are able to compete internationally. My view is that given the fact that manufacturing industry is a smaller proportion of the overall GDP of these countries, there is scope for growth but not necessarily for all existing firms. A final point that is worthy of note is that in spite of the prediction that the region will lead in GDP growth, it will still fall behind India and China in respect of per capita income growth. I think the reason is that this region has a large and youthful population and is expected to maintain strong moderately population growth for a few more decades.  

Fall of the Dictators

Apologies to my very few readers but today's post is among the most political that you will read here. While I make no claims to having been particularly inspired, I think that I should state some thoughts about the ouster of Hosni Mubarak of Egypt late last week. In addition, its far safer to speak about the events that occurred in Egypt last week because outcomes are pretty clear now. 

In my view, the rise of such an unexpected event with the tensions and uncertainties made a mockery of pundits generally and the intelligence institutions because not only were they unable to predict the start of these events but seemed unprepared to deal with it once it started. As if one required a reminder, no despot can ever be completely immune to a rebellion and ouster. Indeed this is proof that most dictatorships are facades for very weak structures and leave no option for structured exits. As Hosni Mubarak just found out,  a 30 year dictatorship would collapse in 18 days.  As an absolute believer in human liberty, I applaud the youth and aged of most populous nation in the Arab world for saying enough and remaining steadfast before a frowning dictator. 

As I debate with myself what all this means, I am compelled to recognize that some lives were lost and therefore the price has been very high. A reluctant hero such as Wael Ghoneim has been identified and celebrated for his use of social media to keep information going and diverse people motivated to do their bit. On the other hand, I think that critical as it has been, the place of social media is probably being overstated in the outcomes. The existence of structural strains made it indubitable that some kind of release would be sought and the thinking being will deploy social media, among other tools to get positive change going.  

This story is not complete unless one takes into account the very measured response from the Egyptian military which effectively asked their commander in chief to take a break. Their role will yet unfold but the outcome would have been far more painful with more lives lost had the military chosen to stand with the despot. One would hesitate to state what would result from the unstoppable force of public demand against stubborn despots with lots of arms. My plea is that they remember that the Egyptian people have tasted freedom and would like to expand it.  Its always a good thing to see a despot fall and with two having fallen in the space of a month is bliss.    

Trade Diversification for Africa

The countries of sub-Saharan Africa have shows comparatively higher growth in GDP in the last few years in spite of the effects of the financial crisis. Understandably, this has created a lot of confidence in the overall managers and governments of the countries in the continent. As it is, the view is that growth of 5% annually shows that the countries are doing something well and have managed to overcome the effects of the financial crisis which has crystallized into a general economic crisis in Europe and the US. 

Due to the state of affairs in Africa, nobody would envy the continent of this new growth momentum but still be cautious about its prospects in the medium term. African countries in the early 1960s experienced growth rates akin to what is seen today and failed to maintain that for the medium term. Writing in The Root, Njaramba Gikunju addresses the background issues while covering the later realization by sub-Saharan African governments that they would suffer secondary effects of the crisis. What is less convincing and demonstrably false in that article is that trade with China as replacement for European export markets would be Africa's main avenue for maintaining growth and escape from poverty. 

To my mind, the continent of Africa gets lots of inappropriate advise but it is inconceivable that Chinese investments and trade opportunities alone would lift the continent's people out of poverty. Africa's main problem in trade is that it has a small portfolio of products to ship out and that these are primarily commodities. Trading the same with China, Brazil or India does not in guarantee faster growth in itself. trade diversification goes both in terms of new destinations for imports and exports in addition to diversification of products. It is not one or the other.  

Disease to Intelligence to Poverty?

A study that has been discussed by the Economist Magazine here established that the prevalence of infectious disease correlates highly with intelligence and a society's development. As expected the study by scholars from the University of New Mexico confirmed that tropical countries and Africa in particular has a high burden of infectious disease and that this is related to the level of intelligence measured by Intelligence Quotient (IQ).

The exact findings of the study is that a huge disease burden affects the intelligence of people within that geographical area and in turn undermines economic development. Taken ahead, this view suggests that geography has substantial implications for economic development. As explained, this inverse relationship between the disease burden and the average IQ. infectious pathogens that cause malaria for instance, affects cognitive development of children.

The place of IQ in economic development has separately been explored by Garett Jones and W Joel Schneider in the paper with the title: Intelligence, Human Capital and Economic Growth. In it Garett and Joel find that a 1% increase in average IQ increases a nation's GDP per capita by 0.11%. That led me to think that its all about education and yet this paper introduces public health questions in it. Two papers worthy of sending to Minister of health, education and finance for holiday reading.

President Fires Soccer Team

Needless to say, only deep disappointment has met many people who banked heavily on outstanding performance from African teams during the World Cup 2010. Putting aside the fact that Ghana qualified for the quarter finals by beating team USA, the rest of Africa is disappointed that the teams performed too poorly. To my mind, it appears that the expectation was far too high given the basic organizational and structural issues that produce consistently good performance on soccer pitches. In truth, virtually all African teams are lacking in that.

The disappointment in the performance of the Nigerian team was too much for its politicians to take. As a result, the delightfully named president Jonathan Goodluck of Nigeria unilaterally suspended the national team by announcing that soccer activity at the international level will remain in abeyance for two years. While that is laughable in the main and is bound to lead to conflict with FIFA as stated here, I see a positive side to all this.

To begin with, my libertarian view is that the Nigerian people would have much more to gain from a diversion of taxes away from funding private activity as soccer and into more public goods and services. Bearing in mind that Nigeria is a country of more than 100 million people, it is not useful to spend public money on financing sports played by rich professionals employed by clubs in Europe and Asia. So the president should not have suspended the Nigerian Football Federation's activities but merely withheld state subvention for all time. in this way, soccer organization in Nigeria would remain a matter for private organization.

Update: President J. Goodluck rescinded the decision after two days. He has no libertarian instincts after all.

Clip Art: http://www.cksinfo.com/sports/soccer/index.html

Where's the Data on African Firms?

Coverage of success in entrepreneurship has been enabled by the Internet to a very great extent. And yet very few businesses based in Africa have much prominence outside the continent. This may be because a disproportionate number of Africans are engaged in subsistence farming and the main exports from the continent are agricultural and extractive commodities. While there is demand for coffee, tea and other African exports, the main marketing firms are not based in the continent. The ostensible reason is that the commodities are backed with services that add value for which Africans have no developed a sufficient degree of competence and networks for retail distribution.

An article in the Economist magazine shows the rare African firm that has made inroads into the British supermarket chains in order to distribute a coffee brand that is entirely grown and distributed by a Ugandan entrepreneur. As expected of every entrepreneurial tale, Good Africa's penetration into the supermarket chains in Britain required deft manoeuvres. What these small number of entrepreneurs lack is the business linkages that would ease the information extraction process and improve their ability to supply a reasonable quality product. In other words, trust in business is one of the areas that hampers African exporters. I wonder whether a business mechanism for extracting that information is possible. There must be some way.

Confronting African Involvement in The Slave Trade

Many people who read dispassionate accounts of slavery are invariably appalled and shocked by the cruelty that accompanied the commoditization and sale of human beings by others. The phenomenon of slavery is one that makes me take a step back to ask where ethics and markets intersect. And any knowledgeable person also knows that the US paid a huge price in the Civil War before the issue was resolved in part. Many people in the US accept the moral error that led to the enslavement of Africans shipped onto the continent and were owned by a number of families and individuals.  An enduring though impractical argument has been that some reparations are due to the descendants of the slaves on account of this moral crime.

In this article, Henry Louis Gates Jr. has confronted the less acknowledged side to the story of the huge market of slavery before abolition in Europe and the American continents. That truth is that a large number of African kingdoms willingly conducted raids and built fortunes through running huge slave markets. As the article reiterates, most of the slave merchants simply appeared on the ports and few ever entered into the interior in large numbers. Understandably, this complicates the demand for reparations because all of Africa has cast itself as a victim of the great injustice based entirely on racial prejudice. Still, I find that while Henry Louis Gates Jr. has exposed the ability of Africans to stand eyeball to eyeball with the contradiction with the main powers from Europe bearing most of the shame. The missing story is that of Arab collaboration in the slavery movement especially in the North and eastern coasts of Africa. To my mind, too often the equally brutal role of the Arabs in Africa is easily forgotten or subsumed in the story about the transatlantic slavery. Unlike the professor, I am less confident that President Obama's involvement will end the blame game and so I only wager that the history be taught with high fidelity to facts.

A Study on African Land Deals

A while ago, I wrote to blog posts here and here on the trend for corporations to approach governments in Africa to allow investments in agriculture through long-term leases. As I called, it then, this land rush was a new area and one in which the investment model was particularly susceptible to local politics and related political risks. I may not have stressed sufficiently but it was clear that this was one area of international public affairs that had not been more incisively examined.

I have just encountered a most professional attempt to by the IIED here to create an understanding of the phenomenon of huge investments in farming through land leases in Africa. The study confirms my thinking that the political risks are real and will ultimately determine the returns to the investments in addition to the fact that the credibility of the governments is questionable because the contracts are highly secretive. This lack of transparency undermines the good faith that citizens of these nations may have for a new investor.

Less convincing is the suggestion that governments should ask hard questions of investors in addition to determining whether land acquisition is meant for speculative purposes. My view is that most governments will have an incentive to record any new investment and that added to the lack of disclosure on the agreements raises the likelihood that the agreements will be skewed and the lease terms will be very low. Overall, the dearth of information on the subject makes the report immensely informative even if its prescriptions are not wholly palatable to me.

Political Risk and Investment in African Land

Reading this story in the Guardian, I am reminded of the fact that Africa has enormous resources in land and yet it is the continent that most advertises its problems with feeding its people. Recently, a number of corporations have sought to enter into long-term leases with African governments to bring land into more intense farming and thereby increase food production for local consumption with the possibility of exports. In the story referred to above, a number of farms are concluding leases of up to a couple of generations with the Ethiopian government in order to plant cereals for domestic and regional markets. It is clear to me that given the fairly intense farming methods that will be introduced in those areas, the farms will be very productive and the investing firms will be able to bring a lot of produce to markets thereby making enormous profits.

An earlier blog post here addressed a similar investment in the western part of Kenya and confirms the view expressed by the author of the story that many such deals are being pursued on the continent. A number of the land leases have raised concerns especially because they were meant entirely to generate food for export to the Asian countries. To my mind, the quest to expand agricultural productivity in Africa has been longstanding and the principle of investment based on factor abundance is altogether sound and worthy of support.

The one point of concern and which betrays serious naivette on the part of the managers and owners of the overwhelmingly foreign firms is the political risks that appertain to these long term leases involving land. First, it is worthy of taking into account that most of Africa is not governed by particularly transparent and democratic governments. So the leases will be seen as concluded with foreigners entirely at the behest of government and to the disadvantage of the local people. Secondly, these long-term leases involve a critical issue of land ownership which in most of these countries is a very highly politicized matter. A long-term lease of up to 80 years is almost certain to be interpreted by opportunistic politicians as an outright sale. Finally, in the quest to attract these investments, these governments that have bad reputations for corruption have negotiated lease agreements on absurdly cheap rates. Since most of these rates are nominally fixed, it is clear that because of the inflation endemic in these countries, they will in turn be ridiculously small while the profit of these firms will be rising.

The confluence of these factors suggests that most of these firms will increasingly rely on government protection or repression to ensure that the citizens of these countries do not violate their rights to the leased property. Indeed, whether there is improved public consultation or not, the population pressure and absence of other opportunities will lead to intense and nationalistic demands for surrender of the land. One would think that these firms should tread cautiously because whereas they are entitled to negotiate the best terms for themselves, that does not mean that those leases will be perpetually respected as representing fair deals.

Some Effects of the Land Rush

One of the consequences of the commodities boom is the renewed interest in intensifying farming activity throughout the world. This means that the value of agricultural land has gone up considerably with Africa and other developing countries seeing a rush in investment from large agricultural businesses. On the whole, renewed investment in Africa is not only an urgent need but also one of the main ways for fighting the poverty for the people. While written with some bias, this article in the Business week captures some of the difficulties that emerge from the investments related to the purchase or lease of land in parts of Africa. In spite of that, the piece reveals that there are a valid reasons why these investments need to be carefully calibrated due to underlying political and economic issues.

The merits and demerits aside of such deals aside, many people in Kenya and other parts of Africa are very uncomfortable with them since these investment deals are often negotiated between governments on the one side and investment firms that are taking possession of land on the other. So Dominion Farm's investments are definitely required but its managers are wrong to think that having a lease approved by government is sufficient because they find out that they are viewed with suspicion and even resentment. That is not good for investor relations and it shows very poor analysis on political risks and how it affects the longer-term viability of their investments.

I also think that to ensure success, these agreements ought to be as transparent as possible because land is still a political issue in most of Africa. There is still the tension between private ownership and communal ownership but on the whole, the western Kenya belt where Dominion Farms is based is completely adjudicated and therefore its people are largely comfortable with private ownership. This means that Dominion ought to have sought to negotiate directly with individual farms owners and should publish whatever the undertakings from either side are. I find it suspicious that Mr. Burgess claims to have negotiated with tribal chiefs when nobody bears such powers to negotiate over another’s land. So the piece is either incorrect on this or someone has made this up.

As stated in the piece and reiterated by the its response here, some of the targets that were established for Dominion Farms are altogether unrealistic. My thinking is that transition from homestead agriculture is necessary for significant welfare enhancement because there are too many people farming non-viable pieces of land in Africa. So it must be expected that enhanced farming techniques would lead to fewer farmers producing more to enable productivity gains to occur. So the leases should not come with promises for a target number of jobs and so Dominion Farms was at fault for accepting such a compromise. It should insist that it is purely an investment and not a welfare scheme and that's the reason I am unimpressed with claims that it intends to build hospitals and all that.

My assessment of the land lease phenomenon is that many investors in Africa and developing countries have failed to realize that the ability of governments to coerce citizens is surely fading. This means that investment deals cannot be based on the 1960s templates involving sweeteners to local officials, undertakings to establish infrastructure and then all would be fine. While I agree that land is an economic good too, these investors ought to be clear that their missionary zeal and sermons alone will neither ensure that they are admired nor that they get good returns. Contest for land ownership in Kenya, as in most of Africa, is particularly intense and any foreigner who enters that contest banking on government support alone is unlikely to be successful. Proper political risk analysis and how it affects investment viability is required for most of the land rushing corporations. I see that many of these projects will be difficult and possibly end in grief for investors.

Broadband Arrives in Africa

It is unimaginable to many people outside Africa that the eastern coast of the world's second largest continent was the sole area with no undersea communications cable. Thankfully, this distinctive measure of underdevelopment is now coming to and end through the development of a number of undersea links to the eastern coast of Africa. Bearing names such as The East African Marine System (TEAMs), the East African Submarine System (EASSY), Seacom and others, the world is finally fully connected.

Cat Contiguglia of NYT covers the amazing series of infrastructure development for Africa and traces some of the expected effects on business and other measures of human developments. Clearly, the west African coast was long connected by cable but this has not had as much effect as the is now expected.

That African citizens have relied on slow satellite communication for so long when the better alternative was available is a story about the national monopolies that did little but bar competition and better service. It is essential to note that the diverse set of investments imply that there will be a degree of competition which will lead to a reduction in prices for communications generally. In spite of the enthusiasm for the new dispensation, I wonder where the extra capacity in large bandwidth will be applied.

It is clear that there may be scope for developing call centers but the worldwide competition in this service is already high and the premium has been largely harvested by India and other English-speaking Asian countries. I fear that in this business, Africa generally may have come to the table too late as usual. My cynicism notwithstanding, the mere drop in costs of telecommunications will lead to innovations and costs savings all around. My own bet is that it will not necessarily be in the call centres. As the main story states, there are businesses that will probably rue the arrival of the Undersea cable. let's see creative destruction at work too. I will be watching as new businesses develop but also as others are rendered obsolete.

How Large Should African Farms Be?

If one thing is common in most of sub-Saharan African countries, it is the sight of families laboring in small plots of land with primitive farm implements and very little use of fertilizers and pest control chemicals. And this leads to the argument in Africa whether there's a way out of poverty for most of these farmers. Part of the argument made by Jeffrey Sachs in this book is that it is possible to tackle poverty in Africa and South Asia by a set of mutually-reinforcing initiatives. These involve interventions for the reduction of diseases, supporting farmers through inputs, reducing hunger and better education for their children.

One of the amazing assumptions that I encounter is the belief that agriculture is still the way out of poverty for most citizens of sub-Saharan Africa. Taking forward this argument, it is understood that peasant agriculture is affected by very low productivity and that it is indeed possible to substantially raise productivity through investments in the development and deployment of agricultural inputs as seeds, implements and fertilizers. Given the very low productivity of peasant agriculture, one cannot argue much with this belief.

To my mind though, the defining feature in African farming lies in the observation that agricultural land has been divided into very small and almost uneconomical units. This suggests that there will be rapidly diminishing returns to any investment aimed at raising the productivity of these farms even with the rise of Africa's expected green revolution. Anne Perkins considers the issue in this piece in the Guardian. Judging from the series of responses contained in that piece, it is still an unsettled matter. What appears to be approaching certainty is that a green revolution on its own or the consolidation of farms may not suffice.

My addition to the argument would be that there would be immense value in consolidating farms in order to benefit from scale, improving seed variety and other forms of biotechnological interventions. Peasant farming in the continent provides poor value but without any alternatives, many keep their land to farm again in the next season for lack of other employment. Surprisingly, a study by the World Bank of South African firms suggests that in spite of a public policy bias towards larger firms, smaller firms were more efficient in an overall sense. This World Bank study records the counter intuitive finding that there an robust inverse relationship between efficiency and land size in South Africa farms. I interpret this to mean that peasant farming is certainly not efficient but consolidation should be guided by the realization that there's a point at which it would not be helpful. This calls for very thoughtful policy.

Part of the solution appears to be about trying to get Africa's agricultural markets to work better. This quest towards enhancing the operation of markets would push the farms towards the ideal size depending on crop or place. As it is now, it is a clear indictment of the continent because a vast majority of its people are farmers and yet they are starved. But whatever happens, bigger farms in some area is surely part of the overall solution. The scale-efficient size for African farms will most definitely vary by geographical area.

Africa Finds that Looking East is not Enough

In the area of international trade and cooperation, the language in Africa is heavily accented with the phrase, "Looking East" meaning that many African nations consider that China is a better trade partner in comparison to high incomer countries of the West. Apart from the slogans, a proper investigation of Chinese involvement in Africa revealed that this was majorly concentrated in nations with huge natural resource endowments. Seeing in this a strategy, it is clear that China's quest was to ensure that its rapid growth rates are not slowed down or halted by the huge demand for petroleum and other commodities that selected African countries have had in abundance.

Thus it appears that African countries and China had found a perfect diplomatic and commercial fir for their relations as China eschewed demands for democratic reforms and high standards of public sector management. In the last decade, the total volume of growth between China and countries in Africa grew phenomenally. In general terms, the structure of this trade represented commodity imports for China with development assistance to facilitate infrastructure construction coming with ,manufactured exports flowing into Africa.

This issue was addressed in this blog post in response to the assumption that China was emerging as Africa's new colonial power. That post is now vindicated as it is clear from this article in the NYT that Guinea, the Democratic Republic of Congo and other resource rich countries from Africa are facing a pull-back from China due to the instability of these countries and the collapse of the commodity prices worldwide. More than ever, it is evident that China's engagement was not a special bond but was driven by pragmatic concerns to construct infrastructure that allows for the extraction of petroleum, bauxite or Iron ore. To its chagrin, Africa will realize that it is not special at all and must conduct its international affairs more rationally than to try and play China against the Us and Europe. For as the referenced blog post states, China definitely needs the US and Europe more than it needs Africa.

Proposal for African Person of the Year

Following up from the last blog post here, I was reminded of the dire situation and the discomfort of many African governments in confronting the question of slavery in Africa by failing to stand against social or religious convention. I heard the news story on BBC radio a couple of days ago in which Hadijatou Mani recounted her experiences after he sale as a chattel to a cruel polygamist and her determination to resist after I was "sold like a goat".

Her determination and quest to maintain her dignity makes me propose her as this blog's African person of the year.

African Slaves Fighting Back in Courts

If there is a single factor that most animates many African intellectuals and other citizens, then it is the issue of transatlantic slave trade. There is no doubt that slavery was completely inhuman even if it was altogether a great contributor to large fortunes for many traders on the African and other continents. Indeed, as confirmed in this compelling biography by Mende Nazer, slavery based on religion, race or status is still widespread in Sudan and other parts of the African continent.

However, what I find most depressing is the fact that the continent whose intellectuals and people protest most loudly about racism is still home to the most egregious forms of slavery. A story in the Guardian confirms the hypocrisy of the people in Africa regarding debates and open discussion about slavery. This brave women from Niger sued the state for failure to protect her from servitude and seems to have received deserved justice. what is most ironic about it is the fact that the state of Niger abolished slavery a mere 5 years ago. the only redeeming thing about the sad case is the acceptance of the judgment and the undertaking to comply with the courts orders.

Why Bata Sells Shoes in Africa

In many forums discussing the continent of Africa, I have heard the sensible claim that this is still a continent where a number of adult people die well before they have ever worn their first pair of new or any shoes. and yet for the large number of African children who attend primary school, the one name that is synonymous with and most recognizable brand is Bata. There's no doubt that this is one of the most ubiquitous companies in the main cities of the African continent.

Ian Austen reports on the passing on of Thomas Bata, the founder's son who was the Chief Executive has passed on. The story states that the corporation that makes nearly 300 million pairs of shoes annually was indeed run by this "shoemaker for the world". As most firms find out in Africa, the continent is a difficult terrain for business but Thomas Bata's statement declaring that the expansion into Africa was motivated by the desired to sell shoes is clearer than many state. All I am certain of is that he found reasonable returns for his efforts selling shoes to a continent with an uncomfortably large number of the world's unshod.

Paradox of Famine and Food Exports

"I have discussed elsewhere the remarkable fact that, in the terrible
history of famines in the world, no substantial famine has ever occurred in any independent and democratic country with a relatively free press". Amartya Sen

As the world's second largest continent and for which the primary occupation of citizens is farming, it is a wonder that a number of African nations find it hard to consistently feed their populations. In the last three years, the costs of food has increased markedly throughout the world and this means that food aid is also increasingly expensive. the upside of this situation is that the world's peasants would take advantage of this agricultural commodity prices to expand acreage and increase income and overall welfare.

Jeffrey Gettleman's IHT story analyzes how Sudan is coping with high food prices and an armed conflict. Since the political crisis in Darfur is ongoing and the affected populations are being fed by food aid, the government of Sudan is instead taking advantage of high food prices to increase exports to Jordan and Saudi Arabia. the clear irony is that a government that has failed to ensure the peace and infrastructure that would enable its poor farmers to continue to produce their own food is unabashedly exporting grain and hiring farms while other countries ensure that some food is available to feed its malnourished and starving population.

While I am reluctant to fully accept the view that any form of foreign assistance is harmful, I readily concede that the story illustrates clearly that Africa's problems regarding stability and food sufficiency are entirely self inflicted. Indeed, in the Sudanese case it appears to be part of a political strategy to permanently impoverish a section of its population. Dictatorships and unfree societies are breeding grounds for famines and starvation. Sudan is a case study that Amartya Sen's pithy aphorism extracted from this well-read piece is true.