Africa's debt burden, poverty, and the G 8countries
By KC PRINCE ASAGWARA, Ph.D
Special to USAfricaonline.com,USAfrica The Newspaper, Houston
CLASSmagazine, TheBlack Business Journal
August 10, 2005: Recently, Africa's debt burden, its relief andthe general poverty in Africa tookcenter stage. To all those who have cared to know about Africa,she is a basket case. That accounts for why whatever economic aid orassistance the West extends to Africa becomes news worthy. Hence thedebt cancellation for the world's poorest 18 countries &endash; 14 ofwhich are in Africa has once again put Africa in the sport light ofmostly bad news.
The relief of Africa's debt burden through debt forgiveness by themembers of G 8 is commendable.As my people, the Igbos of Nigeria would say, when you give kudos toa man for the much he has done, he would likely do more. So to the G8 members, I say thank you.
Africa not entirely responsible for its debt burden
But if the truth must be said, Africa's debt burden and povertyare not entirely of the making of African countries. Africa isblessed with mineral resources of all types. But the West fordevelopment of the West harvests most of Africa's mineral resources.The late Walter Rodney, a Black Guyanese scholar wrote his popularand controversial book in 1980, "How Europe Underdeveloped
Africa." In that book, Mr. Rodney analyzed how Europe's appropriationof Africa's human and mineral resources for centuries, led to thecontinent's loss of power and economic impoverishment. Today, the
situation has not changed. If anything, the Westerncountries' appropriation of Africa's mineral resources andunderdevelopment of Africa continues unabated. In fact, some believethat it has gotten worse. Granting Africa debt relief or giving themfinancial aid amounts to giving a needy person meal for the day.Tomorrow, he/she will still be hungry and come back for more. But ifyou teach a hungry person how to provide his or her own food, he/shewill feed self for life. I want to believe that the West is seriousand honest in their proclaimed effort to assist Africa out of thedoldrums of poverty. If they are, they should begin by addressing theunderlying problems that put her in the basket case situation.Otherwise, any amount of aid given to African countries would end asan effort in futility. Please, let me explain.
Even if the total debt burden those African countries owe the Westis written off, and aid to Africa is increased to $50 billion a yearby 2010, and $75 billion a year by 2015 as being advocated in somequarters, Africa's poverty may still not be solved. Seriouscommitment from the West to help Africa become wealthy would demandthe West giving up most of the strategic economic advantages it hashad on Africa since coming into contact with African countries.
The bitter pill prescribed for Africa
We know that for every one dollar that the West gives to Africa asaids it takes back $50.00 in return. For instance, in the 1990s theWest, through the International Monetary Fund and the World Bank,prescribed economic policies for African countries that included thedismantling of import tariffs on Western products, stoppingsubsidization of the local products, and opening their markets forinvestment and trade relations. Most African countries adopted theeconomic reform policies recommended by the IMF and World Bank, andinstituted the Structural Adjustment Program (SAP). But the Westfailed to live up to their own part of the bargain to invest inAfrican countries. African countries are being told that politicalinstability in your countries makes it difficult for the West toseriously consider investing there. But the unstable politicalsituation was there in the first place before the West talked theminto instituting SAP. Juxtapose this demand to the unstable politicalclimate in the former Eastern European countries where the Westcontinues to invest, you will begin to wonder if the West is seriousin assisting Africa fight and rid itself of poverty.
Western farmers heavily subsidized
The West continues to subsidize both their agricultural andindustrial products, which creates an over abundance of products thatmake it difficult for African producers to compete or sell theirproducts at a gainful price. For instance, Mozambique produces thecheapest sugar in the world, between $75 and $100 a ton, to Europe's$395 a ton. On the surface, Mozambique farmers and sugar producersshould reap enormous profits from their labor. But this is not thecase because the European Union through its Common Agriculturalpolicy (CAP) subsidizes its sugar producers to the tune of $675million a year. The net effect is that Mozambique cannot sell itssurplus sugar in any market in Europe, while Europe's surplus isdumped onto African countries' markets, thereby impoverishingMozambique.
Canada subsidizes farmers and agricultural products. According toUrban Renaissance Institute, from 1991 to 2000, the federal andprovincial governments of Canada supplied an average of $3.76 inagricultural subsidies for every $1.00 earned by Canadian farmers.The amount of subsidy varies from province to province. For Ontariofarmers for example, they were subsidized $6.60 for every $1 farmprofit. This did not include the subsidy that farmers receivedthrough property tax concessions that ranged from $70 million toalmost $1.1 billion, depending on the calculation method used in aparticular year. In 2002, Manitoba and Saskatchewan increased the useof Ethanol blended fuel and gasoline. Ethanol is a derivative fromfermented grain, and has been adjudged expensive to produce. Themillions of dollars that it costs oil and gas companies to produceethanol are being subsidized by both provincial governments. Canadianfarmers may argue that they are less subsidized compared to the EUagro-industry or U.S. farmers. The fact remains that subsidy at anylevel hurts African countries and leads to unfair trade practicesbetween the West and Africa.
2006 CALENDAR, FRIDAY May 5, AND SATURDAY MAY 6, 2006: CLASS magazine, USAfrica and USAfricaonline.com (characterized by The New York Times as the largest and most influential African-owned, U.S-based multimedia networks), will hold the USAfrica 14th internationally-acclaimed 2006 BEST OF AFRICA awards dinner in honor of African professionals and our annual Mothers' Day Honors on FRIDAY MAY 5 and on SATURDAY MAY 6, 2006. Nominate some African professionals and community builders. E-mail: Class@Classmagazine.tv. It will be an invitation-only event. The open annual international townhall meeting, USAfrica Forum, will hold on Friday May 5, 2006. USAfrica was founded in May 1992, in Houston, Texas by television broadcaster and multimedia media executive Chido Nwangwu. Contact USAfrica/CLASS event manager Alverna Johnson and Chuck Obazei at 713-270-5500. or 832-45-CHIDO (24436) - E-mail: Class@Classmagazine.tv
In 2002, President Bush signed into law the Farm Bill thatprovided federal payments to farmers to the tune of $83 billion over10 years (2002-2012). Many, including African countries condemnedthis U.S. government action. Business Day, Johannesburg, May 21, 2002reported that South Africa's farmers and agricultural processingindustries were incensed by increased U.S. government support toAmerican farmers. Reuters News Service, at that time reported thatAfrican commentators condemned the new U.S. law that protected theU.S. farm industry because it created a hurdle in the marketing ofAfrican products in U.S. markets. The above are just examples. G8member countries subsidize their agricultural, farm and loggingindustry products, including those harvested from the oceans,contrary to the doctrine of free trade and open markets theyrecommend for African countries. Nothing can be more hypocritical.Equitable bilateral trade relations are what African countries needto solve their economic problems and not aid. For every dollar givenby the West to Africa in the form of aid, ten dollars is taken backfrom African countries by way of unfair trade practices. How then canAfrica not be mired in debt and poverty? The West's subsidy of theirfarm and agricultural products, fishing and logging industry, rigidtrade barriers and tariffs that prevent African countries fromaccessing the Western markets should be removed.
Promote democracy and the rule of law
Apart from unfair trade practices, the West can assist Africasolve its economic problems by promoting democracy and the rule oflaw in Africa as it is practiced in the West. In the West, anyonethat is an accessory to theft or a recipient of stolen goods is asguilty as the one that stole it. Corrupt African leaders steal andloot their treasuries and deposit them in Western banks. Many Westerncountries know this. For instance, the late President of Nigeria,General Sani Abacha stole $-5 billion in five years. In the past fourdecades, Nigeria's rulers stole and deposited most of their$500-billion loot in European and American banks. Since 1999 thatPresident Obasanjo came to power in Nigeria, all his effort torepatriate stolen money deposited in Western banks have been stalledby one legal obstacle or the other imposed by the Western governmentsin whose banks these money are deposited. At some point, PresidentObasanjo lamented openly and wondered how the West can claim to beserious in addressing Africa's poverty and economic problems whenthey are uncooperative in returning stolen money to its rightfulowners.
In mineral rich nation of the Democratic Republic of Congo, thelate dictator, Mobutu Sesse Seko collected $5-billion in foreign debtand looted $4-billion of it for himself which he deposited in Swissbanks. The Democratic Republic of Congo's attempts to retrieve thenation's stolen money from Swiss banks has so far, been unsuccessfulfor the same reason as that of Nigeria. Returning Nigeria stolenmoney would wipe of its foreign debt and still leave more for itseconomic growth. The same applies to the Democratic Republic ofCongo.
Address economic crimes
Economic crimes are as bad as political crimes or war crimes. TheWest would be assisting African countries in their search foreconomic self-sufficiency, if the names of corrupt public officialsthat have stashed sums of money (any amount of money stolen frompublic treasury by a public officer is lots of money) in Westernbanks are released or made public so that Africans would know theeconomic blood suckers they have masquerading as leaders.
The jurisdiction of the International Court of Justice at TheHague should be expanded to include economic crimes. African leadersthat stole or looted their treasury should be charged to this Courtand tried for economic sabotage, and if convicted, should be sent tojail with stiff fines in addition. If this is done, public officialswould likely see the need for good governance in their countries byway of using the people's money to establish educational and healthdevelopment projects, economic empowerment and job creation, roadconstruction and maintenance, agricultural development and adequatefood supply, good drinking water supply and effective drainage systemfor the people. These are needs that are basics in the West, and forwhich Africans are running away from their countries. In the end, theWest will have less number of African economic refugees knocking downthe doors of their embassies for asylum and refugee status. This willalso see a reduction in your social problems as you often blameimmigrants for these flaws in your societies.
The West should not recognize corrupt or illegitimate Africangovernments
The West should refuse to recognize or do business with allcorrupt African leaders or those leaders that came to power throughthe barrel of the gun. The reason why Africa has been inundated withcoups d' etat is the West's willingness to embrace military regimes,often corrupt that emerges in African countries. It is a known factthat no leader of an African country emerges unless he receives awink and a nod from the West, particularly, the USA, Britain andFrance. And often, those are leaders willing to play ball with themor act the scripts written by them. The West should stop determiningand teleguiding Africa's political leaders. This is undemocratic andserves only the interest of the West. The West should stop supplyingarms and ammunitions to warring parties in internal and inter-countryconflicts in African. The West cannot continue to do this and turnaround to blame African countries for their in ability to stop intraor inter-country wars. The above are fundamental problems in theway the West relates to Africa and her economic problems. And unlessthose fundamental problems are addressed and corrected, Africa willcontinue to be a basket case for the West.
Dr. Asagwara isCanada-based contributing editor of USAfricaonline.comand CLASSmagazine and global e-listIgboEvents. He wrote this essay exclusively for theUSAfrica multimedia networks
USAfricaFORUM: Africa,Blair and United Kingdom's commendable push fordevelopment assistance. By Dr. Chinua Akukwe
APPRECIATION "This is our moment to stand up for what's right,'' U2 lead singer Bono told the audience in London. ``We can't fix every problem, but those we can, we must,'' he said, mentioning malaria, AIDS and deaths caused by dirty water. U.K. Prime Minister Tony Blair, host of the G-8 summit, is making African poverty reduction a focus of the meeting. Performers at "Live 8'' -- including Paul McCartney, Cold Play, Madonna and REM -- want to raise popular awareness of the continent's economic deprivation. The concerts will reach a potential global audience of 5.5 billion people through television, Internet and other media, organizer Bob Geldof said. They occur 20 years after the Live Aid concerts that Geldof also arranged to combat African poverty. Africa is the only continent to have become poorer in the last 25 years, according to the United Nations. More than 300 million Africans live on less than $1 a day, and less than half of children on the continent complete primary school. In the last 50 years, there have been 186 coups and 26 wars in Africa, with more than 7 million people killed, the UN says. These views were stated during an interview CNN's anchor Bernard Shaw and senior analyst Jeff Greenfield had with Mr. Nwangwu on Saturday November 18, 2000 during a special edition of 'Inside Politics 2000.'
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Nwangwu, adviser to the Mayor of Houston (the 4th largest city in the U.S., and immigrant home to thousands of Africans) argued further that "the issues of the heritage interests of 35 million African-Americans in Africa, the volume and value of oil business between between the U.S and Nigeria and the horrendous AIDS crisis in Africa do not lend any basis for Governor Bush's ill-advised position which removes Africa from fair consideration" were he to be elected president.
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"This is our moment to stand up for what's right,'' U2 lead singer Bono told the audience in London. ``We can't fix every problem, but those we can, we must,'' he said, mentioning malaria, AIDS and deaths caused by dirty water. U.K. Prime Minister Tony Blair, host of the G-8 summit, is making African poverty reduction a focus of the meeting. Performers at "Live 8'' -- including Paul McCartney, Cold Play, Madonna and REM -- want to raise popular awareness of the continent's economic deprivation.
The concerts will reach a potential global audience of 5.5 billion people through television, Internet and other media, organizer Bob Geldof said. They occur 20 years after the Live Aid concerts that Geldof also arranged to combat African poverty. Africa is the only continent to have become poorer in the last 25 years, according to the United Nations. More than 300 million Africans live on less than $1 a day, and less than half of children on the continent complete primary school. In the last 50 years, there have been 186 coups and 26 wars in Africa, with more than 7 million people killed, the UN says.
These views were stated during an interview CNN's anchor Bernard Shaw and senior analyst Jeff Greenfield had with Mr. Nwangwu on Saturday November 18, 2000 during a special edition of 'Inside Politics 2000.'