Posts Tagged ‘african development’
FC, a member of the World Bank Group, and the Soros Economic Development Fund have both invested $1.25 million of equity into Esoko, a Ghanaian technology firm.
For decades African governments have largely depended on Western donors to fund everything from community latrines to public universities. Admittedly, some societies could not have survived to this day had it not been for foreign aid.
The African growth model based solely on foreign aid has so far not delivered the promises it was hoped to deliver. Actually, it has done more harm than good.
One will agree with me that foreign aid has served to promote oppressive regimes rather the everyday African people. Politicians in the category of Sani Abacha of Nigeria and Mobutu Sese Seko of Zaire/Congo eventually stacked the money in foreign banks which is then loaned back to Africa. Others do it in mild way by using the money to feed their cronies and families and have enough to send even children of their friends to world-class universities abroad. Opening markets to African goods and services will not solve the entire problem but at least leave some power in the hands of the ordinary people. It is time that Western donors stop handing out billions of dollars in humanitarian and economic to dictators in Africa and then turn death ears and blind eyes to their deeds.
I believe, however, that it is time for us to begin to look at a different growth model for the African economy that depends less on foreign aid. This new model in my opinion should be based on open markets where African goods and services have free access to western markets. Growth in China, and to some extend India, have largely been dependent on the access of goods and services from these geographical regions into the western markets.
When we talk about goods and services, most readers will ask ‘what can Africa deliver? Well, it’s actually a lot. I’m not talking about Kenya or Senegal exporting cell phones and laptops to the US next year. But what about a system that makes it attractive for the US manufacturer to import raw materials from the African farmers, if that is what we bring to the market at this period in time.
Let us consider some figures. In 2001, the US approved about $4 Billion in subsidies to nearly 25,000 cotton growers in the US for cotton crop that was worth only $3 Billion at the world marker price. Other figures I came across pointed out that a single cotton grower in a mid-western US state received $6 million in subsidies, which is larger than the combined annual earnings of 25,000 cotton farmers in Mali. (For your information, the $4 Billion government subsidy is also more than one third what the US spends on the nearly 1 billion people on the African continent).
This policy makes it unattractive for manufactures to import raw materials from Africa and other developing countries
This system is being perpetrated not only by the US but also by the European Union and China, which is destroying the livelihood of countries like Mali, Senegal, Chad, and Benin which are all major cotton producing countries. A recent study by UNCTAD-India pointed out that if the US were to do away with some of these subsidies, farm output will decline by nearly 40%. Although we would pay more at the grocery story in the US, it will spur up more imports from Africa and other developing regions which will generate enough foreign exchange the fund their community development activities.
This is not advocating for a loss-loss situation for the US and Europe. In fact, it’s more than a win-win case. Western countries have more to gain than lose.
The African Growth and Opportunity Act (AGOA) were enacted to do just this. AGOA provides duty-free access to the U.S. market for a wide range of products from eligible African countries, while spurring African governments to make their countries attractive to U.S. investment. I think this is the type of initiative that needs an injection of momentum and expansion.
Currency wars between powerful nations may have a negative effect on fragile economies such as those those in Africa
africa economies, african development, african goods and services, african imports to US, china currency manipulation, currency manipulation, emerging markets, international currency war, open access, US federal reserve, world bank
Ghana’s economy is 75 percent bigger than previously calculated, the country’s Statistical Service said, slashing the relative size of the fiscal deficit and the current-account shortfall
Dr Waweru Mwangi at Jomo Kenyatta University (Kenya), says it is closer than you think.
The African diaspora provides powerful intellectual input to the research achievements of other countries, but returns less benefit to the countries of birth.
Multicellular creatures may have gotten going 2.1 billion years ago
By Kofi Annan
Ahead of today’s G20 Summit in South Korea, two issues stand out for those of us who take an interest in international
First, the concepts of fairness, balance, and the common good have experienced a welcome renaissance as world leaders have had to remind each other of these universal principles to avoid a potentially devastating escalation of their disagreements on currency values and trade imbalances.
Second, while it remains to be seen to what extent it will help to bring countries’ contending economic strategies into line, this rediscovery of basic values comes just as the G20 is beginning to include international development issues in its deliberations. Naturally, it is my profound hope that the principles of fairness, balance and the common good which have become so popular with G20 leaders lately will also inform these discussions — and not only those on issues like undervalued currencies, lopsided trade statistics or skewed consumption patterns however important they may be.
Unfortunately, the signs are decidedly mixed. On the one hand, the global repercussions of the financial and economic crises have clearly nourished an understanding of the true extent and consequences of our interdependence. At least for a moment, there seems to have been a consensus that a world that restricts the benefits of globalization to a few at the expense of many is neither fair nor stable; that one cannot address trade imbalances without addressing the development imbalances that underlie them; and that it is in everyone’s interest to see the developing world graduate out of instability and economic dependence as soon as possible.
However, all these realizations have not yet led to the fundamentally different policies that are so urgently needed. In fact, in many G20 countries the crises, and particularly their effects on the world’s poor, appear already all but forgotten and business and politics have resumed with little regard to the damage caused, the trust destroyed, and the lessons learned. Several G20 members have even used the economic upheavals as an excuse to tighten protectionist policies in direct contrast to their repeated pledges to keep markets open. As so often, developing countries have been among the primary victims.
This is deeply unfortunate as, in my view, the G20 states
, both individually and collectively, are the natural drivers of development. They are, by definition, the countries with the capacity, resources, influence and, thus, the moral obligation and responsibility to help those less fortunate.
Many of them have only recently graduated into major economies and their developmental experiences are still fresh. These countries understand that the key to development is not charity but equitable, job creating, and ideally green economic growth fueled by investment in the productive sectors, agriculture, infrastructure, renewable energy, trade, knowledge and technical skills. They also appreciate that the most important sources of development finance must be domestic revenues and private sector investment and that aid’s main value other than in meeting urgent humanitarian needs, is to increase capacities, reduce dependence upon external support, and to lubricate and leverage investment in the sources of growth and good governance.
It is thus encouraging that the development agenda proposed by the South Korean presidency speaks as much to these realities as to a new sense of partnership and genuine mutual accountability. The document, as far as it is known, covers all the right points, including the unblocking of existing initiatives and the need to complement the efforts of other actors such as the G8, the G77 and, of course, the United Nations. If the leaders assembled in Seoul decide to take it on with the same universal values in mind that they now invoke in the areas of trade and exchange rates, we will have gained much.
Having said all this, the implementation of the valuable ideas entailed in the Korean proposal should not be made dependent on the G20 taking them on as a group. While a renewed commitment to development by the world’s most powerful group would certainly be a major step in the right direction and send an important political signal to developing countries, it is of course not enough on its own to overcome the immense challenges that these countries face. Nor does it necessarily invalidate some of the concerns raised regarding the G20′s legitimacy and capacity.
What really counts is that each member of the group internalizes the concepts of fairness, balance, and the common good and adapts its behaviour accordingly. If the G20 setup can help them do so by playing to its unquestionable strengths of composition, reach and sheer economic prowess, this will be all the better and should not only be welcomed, but encouraged.