Ethiopian PM Abiy Ahmed: “Africa’s Peace and Prosperity Begin at Home”-More is Required

Th AfCFTA is intended to be a new platform for the continent’s economic growth. (courtesy twnafrica.org)

September 14, 2020

Ethiopian Prime Minister, Abiy Ahmed make a strong case for African nations to chart a course to bring prosperity to to the continent. However, much more is needed to plan for the creation of economic growth that Africa requires today and for its future population. Poverty for hundreds of millions of Africans must be eradicated. Over 600 million Africans without access to online electricity must be brought into the “light.” This requires that African leaders, with the African Union and Africa’s true allies should come together and produce a development program. A plan of action for a 5-10-20 year growth policy that must include minimally: electrifying the continent with a thousand gigawatts of electricity; high speed modern trains connecting the major cities and ports; modern all weather highways; creating a healthy manufacturing sector; and a state of the art health infrastructure system. We must think boldly about the the basic requirements needed for all Africans to live meaningful and productive lives.

Excerpt from Prime Minister Abiy

“ADDIS ABABA – Africans must take responsibility for our continent’s affairs. We have all the ingredients we need to succeed, starting with a growing population – including a large and increasingly educated cohort of young people – and a favorable trade and investment environment. And now, determined to usher in an era of African peace and prosperity, we have a mature institutional platform through which to forge, articulate, assert, and defend our common interests under an independent, unified African foreign policy.

“For too long, Africa has been a strategic plaything of world powers. By bolstering its internal cohesion and economic integration, the continent can become a strong geopolitical force with an independent and unified voice on important global issues.

Read Prime Minister Abiy Ahmed’s essay:  Africa’s Peace and Prosperity Begin at Home

Africa Requires Ethiopia Fill Its Dam

Artist drawing of the Grand Ethiopian Renaissance Dam

 

Africa Requires Ethiopia Fill Its Dam

Lawrence Freeman

July 17, 2020

Ethiopia is entering a crucial period for the future of its nation, as we approach the second half of July. Ethiopia must use the forthcoming rainy season (July to September) to begin the partial filling of its Grand Ethiopian Renaissance Dam (GERD) being built on Ethiopia’s Blue Nile River. When fully completed, the GERD, Africa’s largest hydroelectric project is capable of producing over 6,000 megawatts (MW). This is not only a game changer for Ethiopia, but will contribute to transforming the Horn of Africa.

The Blue Nile, which joins the White Nile just north of Khartoum, Sudan, provides 86% of the water that becomes the Nile River. From there, the Nile flows north through the deserts of Sudan and Egypt before emptying into the Mediterranean Sea.  Ethiopia has been involved in intense discussions with Sudan and Egypt, downstream from the dam, about the amount of water to be withdrawn from the Blue Nile to begin filling the GERD’s 76 billion cubic meter storage/reservoir. Egypt continuously attempts to forestall the filling of the dam, alleging that since it is dependent on the Nile, if the volume of the Nile is reduced, its citizens will suffer irreparable harm. For most of the last century Egypt has received the majority of the Nile River’s 84 billion cubic meters (bcm) of water.

Electricity for Development

The GERD, which is 75% finished was entirely funded by the Ethiopian people, is a $5 billion water infrastructure project initiated in 2011. Its purpose is to provide much needed electricity to power Ethiopia’s transition from an agrarian dominated economy to one that encompasses manufacturing and industry. In the years ahead, Ethiopia envisions become a light manufacturing hub for Africa, increasing manufacturing output, and manufacturing jobs by 440%.

The functioning of the GERD is not an option for this emerging nation of 110 million people, but a categorical necessity.

As a physical economist, who has studied Africa for decades, and knows the key drivers of economic growth, I can tell you that nothing is more vital for the survival of Africa, than the production of electricity.  Without abundant and accessible electricity, poverty and disease will not be eliminated. Poverty is the number one enemy of Africa and is the cause of immense suffering for hundreds of millions of Africans.

Approximately 600 million Africans, almost half of the continent’s population, are not connected to a central energy grid. The overwhelming majority of them reside in sub-Saharan Africa (SSA). More than 65 million Ethiopians, 40-45% of the population, do not have access to electricity. While Ethiopia suffers from one of the lowest per capita levels of electrical energy consumption, Egypt’s population of 100 million has 100% access.

When completed, the GERD will increase Ethiopia’s power generation from its current level of 4,500 MW to close to 11,000 MW, which will make it the second largest energy producer in SAA, behind South Africa. Ethiopia has already entered into agreements to export its excess electricity to other nations in East Africa.

“The Ethiopians officials have announced an annual investment of one billion dollars over the next decade in the development of specialized industrial parks.” (Courtesy Medafricatimes.com)

Ethiopia’s commitment to construct the GERD resonates with the same vision that compelled the nation to build the Addis-Ababa to Djibouti rail line; to expand their economy, eliminate poverty, and provide a meaningful future for their expanding young population.

While Ethiopia is blessed with several water systems, the Blue Nile provides between 70% of its surface water. Ethiopia suffers from water shortages, droughts, and food insecurity due to inadequate infrastructure and under development.

It is true that Egypt has one of the lowest water per capita consumption rates in the world at 570 cubic meters per year, well below the global average of 1,000. Ethiopia’s amount is a mere 125 cubic meters per capita, barely more than 20% of Egypt’s level.

However, the Ethiopia government has plainly stated that the intention of the GERD is not to provide water for irrigation or consumption. The motivation and sacrifice of the Ethiopian people in undertaking this mega infrastructure project is to provide electrical power for the purpose of developing their nation. Ethiopia intends on becoming a low-middle income nation. It can no longer allow its people to be without electricity, relegated to burning wood. Improving the lives of their citizens today and future generations is the objective of an operational GERD.

Blue Nile joins White Nile in Khartoum, Sudan

 

Sovereignty Versus Colonialism  

The Blue Nile descends from Lake Tana, deep inside Ethiopia’s mountains, traveling through Ethiopia before entering Sudan. The GERD will capture Blue Nile waters about 40 meters before the Sudanese border. Ethiopia intends to fill the dam’s reservoir with 14.5 bcm of water over the first two years for testing. The withdrawing of this amount from the Blue Nile’s 49 bcm will not adversely affect downstream nations (Sudan, Egypt). In fact, the GERD will benefit these nations by regulating the flow of the Nile, preventing flooding, reducing silt, and decreasing evaporation.

Ethiopia has the wonderful distinction in Africa of having never been colonized. Unlike my beloved American July 4th, celebrating our independence from the British Empire, Ethiopia has no Independence Day. Instead, Ethiopia celebrates Adwa Day, March 1, 1896, when they defeated the Italian army on the battlefield in northern Ethiopia. Yet Ethiopia is fighting the remnants of British colonialism today in its determination to generate energy to free its people from the bondage of poverty.

Contrary to Egyptian claims, the negotiations between Ethiopia, Egypt, and Sudan are not about water sharing or water allocation. There have been two water allocation agreements regarding the Nile waters, that involved only Egypt and Sudan. Ethiopia was not a signatory nor participants to either accord, yet Egypt asserts historical rights over the Nile River, including Ethiopia’s Blue Nile. The most recent such agreement was in 1959, three years after Sudan’s independence from Britain, which recodified the 1929 British Imperialist agreement guaranteeing 55 bcm of Nile waters to Egypt and 18.5 bcm to Sudan. At the time of the 1929 Anglo-Egyptian Treaty, both Egypt and Sudan were colonies of Great Britain as stipulated by the 1899 Anglo-Egyptian Condominium.  This treaty also “granted Egypt veto power over construction projects on the Nile or any of its tributaries in an effort to minimize any interference with the flow of water into the Nile.”

To maintain geo-political domination and control of trade along the eastern spine of Africa, Britain maintained authority over the Nile waters from Cairo down to Khartoum and beyond into southern Sudan.

Ethiopia, an independent nation was not subject to Britain’s edicts and retained sovereignty over the Blue Nile.

Thus, from whence does Egypt’s historical claim to dominance of the Nile originate.

In a statement signed by the Reverend Jesse Jackson, sent to the Honorable Congresswoman Karen Bass, Chair of the Black Caucus, dated May 19, 2020, Rev. Jackson reveals that Egypt’s “historical rights” over the Nile are derived from the British Queen.

He cites a letter dated May 7, 1929, from Mahmoud Pasha, Chairman of the Egyptian Council of Ministers, to the British requesting affirmation of Egypt’s “natural and historical” rights to the waters of the Nile. Lord Lloyd, Britain’s High Commissioner in Cairo, responded on behalf of the Queen:

“I would like to remind your Excellency [Mahmoud Pasha] that her Majesty’s Government in the United Kingdom has already recognized the natural and historical rights of Egypt to the waters of the Nile. I am entrusted with the responsibility of declaring that Her Majesty’s Government in the United Kingdom considers the observance of these rights as a fundamental principle of the policy of Great Britain.” 

Rev. Jackson stresses in his letter, that Ethiopia should not be pressured “into signing a neo-colonial agreement will make Egypt a hegemon over the Nile River.”

U.S. Gets Involved

In September, Egyptian President Al-Sisi requested U.S. assistance in negotiating the operation of the GERD. President Trump asked Treasury Department to host a series of meetings in Washington DC, beginning in November 2019. Sudan, Ethiopia, and Egypt attended along with a representative of the World Bank, with Treasury Secretary Mnuchin, to act as an impartial observer, not a mediator. Ethiopia compromised by indicating they would extend the filling beyond 3 years, to 5-7 years and increased the amount of water to be released from 35 bcm to 40 bcm in seasons of healthy rain. With the negotiations failing to lead to a resolution, Ethiopia requested to postpone the February 27-28 meeting. The meeting proceeded without Ethiopia. Sudan and Egypt attending, but Egypt alone initialed an agreement prepared without Ethiopia’s input, which the Ethiopia Foreign Ministry characterized as “unacceptable and highly partisan.”

On February 28, 2020, an official statement from the US Treasury Department praised Egypt’s “readiness to sign the agreement,” and instructed Ethiopia that “final testing and filling should not take place without an agreement.” The next day, Ambassador Shinn (ret), former ambassador to Ethiopia, whose has spent decades in the State Department, questioned whether the U.S. was “putting its thumb on the scale in favor of Egypt.”

In a June 22, 2020 bipartisan letter addressed to Ambassador David Hale, Undersecretary of State for Political Affairs, seven former Assistant Secretaries of State for African Affairs, asked the U.S. to embrace neutrality regarding the GERD talks. They wrote:

“The U.S. position at this sensitive juncture will also have long term implications. It will either strengthen or seriously weaken our future relations with Ethiopia. While there is no question that resolution of the Nile issue will require flexibility and compromise on all sides, it is not politically viable for Prime Minister Abiy (or any Ethiopian politician) to indefinitely delay filling the GERD. However, the perception—rightly or wrongly—that the United States has sided with Egypt in the negotiations will limit our ability to support efforts aimed at reaching a settlement.”

President Cyril Ramaphosa, Chair of the African Union convening the teleconference on the GERD

 Discussions Move to Africa

Egypt, not satisfied with the negotiating process, attempted to involve the United Nations in forcing an agreement on Ethiopia that violated its sovereignty over the GERD. On June 29, 2020, Egypt with the support of the U.S. brought the matter to the United Nations Security Council (UNSC). The UNSC is not the normal forum to settle such matters, but Egyptians were hoping to mobilize international pressure against Ethiopia. The UNSC has instead preferred to have the African Union (AU) resolve the issue of Ethiopia’s right to operate the GERD. On the previous Friday, June 26, the Extraordinary African Union Bureau of the Assembly of Heads of State and Government conducted a video-teleconference meeting on the Grand Ethiopian Renaissance Dam (GERD). Chairperson of the African Union Commission, Moussa Faki Mahamat noted that more than 90% of the issues between Egypt, Ethiopia, and Sudan had been resolved.

South African President, Cyril Ramaphosa, in his capacity as the Chairperson of the AU is committed to have “an African led process in the spirit of African solutions to African problems.”

In a June 23rd statement, the U.S. Congressional Caucus emphasized the pivotal role of the AU in these tripartite negotiations. They went on to discuss the importance of the GERD for Africa.

The GERD project will have a positive impact on all countries involved and help combat food security and lack of electricity and power, supply more fresh water to more people, and stabilize and grow the economies of the region.”

The Conference of Black Mayors, in a June 29th statement, expressed their support for the filling of the GERD

“Today, on behalf of global leaders throughout the African diaspora that hold the office of mayor, the Conference of Black Mayors released the following statement in support of the Grand Ethiopian Renaissance Dam (GERD) and the impact GERD would have on Conference of Black Mayors member cities…

“It is known that Ethiopia generates 86% of the Nile waters but has been unable to use this considerable natural resource effectively in the past. Now, following more than a decade of impressive economic growth, Ethiopia desires to utilize its naturally endowed resource for its nation’s critical growth and development. Countries throughout Africa are in dire need of electric power to enable and sustain their respective nations rise out of poverty. The creation of a sustainable energy source will create a national infrastructure that directly contributes to the wellbeing of citizens our mayors represents through our global mayors’ association…

“We strongly support a timely fill of the dam without further delays to avoid the economic impact on Ethiopia and neighboring countries.”

 Ethiopia is desirous to cooperate with downstream nations, but it will not have its sovereignty violated by having the operation of the GERD jointly managed or contingent on the requirements of water for Egypt’s downstream High Aswan Dam.

Ethiopia should and will begin filling the GERD. It would be irresponsible not to use this year’s rainy season to begin filling the reservoir, with the dam already 75% constructed. Ethiopia’s leadership will not disappoint the aspirations of the Ethiopian people, who view the GERD as emblematic of their national identity, and a critical vehicle to raise their standard of living and secure a more prosperous future for their posterity.

Ethiopia’s use of the word Renaissance in describing its new dam is not metaphorical. When fully functional, the GERD will lead to a rejuvenation of Ethiopia’s economy and that of its neighboring nations.

Lawrence Freeman is a Political-Economic Analyst for Africa, who has been involved in the economic development policy of Africa for 30 years. He is the creator of the blog: lawrencefreemanafricaandtheworld.com

 

Russia Bringing Nuclear Power to Rwanda and Other African Nations. Resolving Libya Crisis Requires New Thinking

Russian President Vladimir Putin stands amid African heads of state
In a sign of the continent’s increasing importance for Russia, its president, Vladimir Putin, held the first Russia-Africa summit in October 2019

Ignoring the geo-political overtones from Deutsche Welle (see link below), the article does discuss Russia’s role in helping Africa to build nuclear energy plants, which are vital for the continent. Over 600 million Africans lack access to electricity. Over 1,000 gigawatts of additional power is urgently required. Nuclear power is the most efficient energy to preform work and power an industrialized economy, as well as an optimal energy source to desalinize water. Without abundant accessible electricity, Africa will not develop, and poverty and food shortages will continue. Production of energy and the elimination of poverty are essential for fighting COVID-19 and reducing all diseases in Africa, including cholera.

Excerpts below:

“Rwanda’s parliament has just approved a plan for Russia’s state-owned Rosatom nuclear conglomerate to build it a nuclear research center and reactor in the capital, Kigali.

“The Center of Nuclear Science and Technologies, planned for completion by 2024, will include nuclear research labs as well as a small research reactor with up to 10 MW capacity.

“Ethiopia, Nigeria and Zambia have signed similar deals with Rosatom, while countries such as Ghana, Uganda, Sudan and DRC have less expansive cooperation agreements…

“Rwanda’s planned research reactor will also be used to manufacture radioisotopes, according to Rosatom. Radioisotopes have many applications from irradiating food to increase its shelf life to helping diagnose tumors or heart disease.

“Such research reactors have “definite advantages” in fields such as nuclear medicine, nuclear scientist Michael Gatari, a professor at the University of Nairobi, told DW.

“In addition, on a continent where where more than half of the population lack access to electricity, there is “immense potential” for nuclear to provide a clean source of energy to meet Africa’s large energy deficit, the Center for Global Development study, Atoms for Africa, found.

“In the long term, a nuclear reactor generates electricity cheaper than we are paying now. It is also stable and produces no carbon emissions,” Gatari said in a phone interview from Nairobi.”

Read: Russia Building Nuclear Power In Africa

In my interview with PressTV, Watch: Ending Conflict in Libya Requires New Thinking, I discussed the necessity for a new approach to end the war in Libya. The West turned Libya into a failed state in 2011. Armies on the ground competing for territorial control will not be able to restore Libya’s sovereignty.

Lawrence Freeman is a Political-Economic Analyst for Africa, who has been involved in the economic development policy of Africa for 30 years. He is the creator of the blog: lawrencefreemanafricaandtheworld.com

Creativity Is The True Source of Economic Wealth

Libro — The Creative Wealth of Nations - Andres Valenciano - Medium
Cambridge University Press, 2018.  Hardback, Softback 330 pages, and Kindle

June 26, 2020

Creativity Is the True Source of Economic Wealth

Lawrence Freeman

(I promised Patrick Kabanda over a year ago I would write a review of his book, “The Creative Wealth of Nations: Can the Arts Advance Development?” and I always keep my word.) 

With his book, Patrick Kabanda makes a significant contribution to examining the subject of economics with a new and refreshing approach. Rather than being stuck in a maze measuring monetary values, he looks beyond the financial structure of prices and export-import figures, to the relationship of the human mind to economics. While I do not agree with everything in this book, its principal value to me is that it elevates the discussion of the importance of creativity in economics. The title of Mr. Kabanda’s book caught my eye, because it provocatively alters the title of Adam Smith’s well known, wicked book, “The Wealth of Nations.” Contrary to what is commonly accepted by the majority of my fellow citizens, and what is taught in our institutions of learning, the United States was not founded on the tenets of Adam Smith. In fact, no economy ever was, or ever could be successful by following Smith’s canons.  President George Washington and his brilliant Secretary of the Treasury, Alexander Hamilton, rejected Smith’s doctrines, as did every follower of the American System of Political Economy, including many American Presidents and foreign leaders. (Read Alexander Hamilton’s Credit System Is Necessary for Africa’s Development)

 While it is useful that Kabanda calls attention to the function of culture (art, music, drama) in contributing to economic progress, he errs in properly pinpointing the relationship. It is not culture per se that contributes to economic progress, but rather only a culture that fosters and nourishes human creativity. More precisely, it is those compositions of art, music, and drama, which stimulate creative thinking, an aptitude uniquely bequeathed to the human species, that we should revere. It is this potential for creative thought that makes us truly human, which society’s culture should cherish and nourish.

 Creativity in Economics

Machinists set up and operate a variety of computer-controlled and mechanically-controlled machine tools to produce precision metal parts, instruments, and tools.

Before proceeding with my review, it is necessary to discuss the genuine role of creativity in the science of economics. Improving the conditions of life for an expanding population is not based on money. To understand real economic growth, it is important to comprehend that it is physical (not monetary) inputs injected into an economy that yield improvements in the productive powers of society, which causes an increase in aggregate of wealth.  It should be evident that the augmented capacity of a nation to ensure a prosperous future for those living and their posterity is not the result of the silly creeds of Adam Smith’s “invisible hand.”

Putting aside cult like beliefs in monetarism, let us focus on crucial aspect of physical economy. In the broadest yet most accurate terms, economics is humankind’s relationship to the physical universe. Humans act creatively to transform nature lawfully for the perpetuation of our noble species.  Natural resources are not the ultimate source of value. It is true that human labor adds value to resources in the production process.  Thoughtful economists recognize that the productivity of farmers and workers depends on the quality and quantity of infrastructure available to society. However, the crucial concept for our purpose here is the following. Discovery and utilization of resources, productivity of human labor power, and the level of infrastructure for any given economy, are all delimited by the level of existing scientific and technological culture accessible by the population. Improved productivity emanates from the invention of new designs for machines that enable work to be performed more efficiently.  The application of advanced technologies is derived from discoveries of new scientific principles by the noetic process of the human mind.

Let us examine energy from a higher conceptual standpoint. On the simplest level, oil has existed for millions of years. However, it only became a valuable resource to humans when a technology was invented to utilize oil for energy, which became the dominant fuel to power the twentieth century. The attainment of electricity was made possible by a human scientific discovery of electromagnetism. It was the scientist, William Gilbert, whose publication of the “de Magnete” in 1600 that began the process of understanding the correlation of electromagnetism and earth’s magnetic field.

All energy is not equal. Energy is measured by energy-flux density, that is the ability of that energy source to achieve higher concentrations of heat available to perform work.  With that criteria in mind, we can assert with scientific certainty that nuclear fission is the most powerful form of energy we have today. Africa would be well served, if there were hundreds of 1,000 megawatt or modulars of two to four 200 megawatt nuclear power plants dotting its landscape. To achieve nuclear fusion, whose energy flux-density would far exceed fission, requires additional scientific breakthroughs to fuse hydrogen isotopes at temperatures hotter than the Sun. In tragic comparison, large parts of Africa still rely on burning wood and biomass. Not only is this practice primitive, environmentally unsound, but it utilizes energy at the lowest flux density.

Nuclear fission, which has the greatest energy flux density, making it the most powerful energy source, until nuclear fusion energy is developed.

All machines and integrated infrastructure platforms incorporate in their design, principles of scientific   knowledge of the universe relative to that historical period. The greater the density of machine-infrastructure capital in an economy engenders a more productive and educated labor force. The effects of manufacturing, and railroads on the productivity, and level of knowledge in society are brilliantly discussed by Alexander Hamilton in his “Report on Manufacturers” (1791), and Friedrich List in his “The National System of Political Economy” (1841).  Both authors, who identify humankind’s mental powers as a source of economic wealth, should be studied by every competent economists and statesman.

Without going beyond the scope of this article, the history of civilization’s progress can be measured by the increase of total energy throughput and energy flux-density, which is made possible by technologies that encompass new scientific principles. It is the profound ability of the human mind to continuously discover higher principles embedded in the physical universe, which lifts humankind from one plateau of economic activity to the next superior one. Civilizational progress emanates from the human mind, not nature per se.  Even from the few paragraphs above, it is discernible that the source of economic wealth is the metaphysical, non-material creative imagination, not some corporeal “thing” that you can see, smell or touch.  These apparently intangible ideas that spring from the brow of our “mind-soul” have greater force than bodily-physical objects. This conception has profound epistemological implications in economic theory. More can be said about physical economics and how societies develop, but that will have to wait for another time.

Culture and Imagination

Returning to our review, Mr. Kabanda’s book highlights the role of the contribution of culture and creativity to economic development, and contains many useful insights. In his opening chapter entitled, “Overture,” he discusses “the arts ability to emancipate and foster human imagination.” (p. 3) In chapter two, “Arts in Education,” he writes: “…since the arts embody creativity and innovation, they have a major role to play in fostering knowledge for development.” (p. 44) Quoting Theodore Schultz, “advances in knowledge are a decisive factor in economic progress. The increases in the quality of both physical and human capital originate primarily out of the advances in knowledge.” (p. 48) Kabanda quotes cellist Yo-Yo Ma, who advocates changing the curriculum of science, technology engineering and math-STEM to STEAM by adding the arts. (p. 53) Renaissance-man, Leonardo De Vinci is also mentioned for his search “to know what we don’t know” originally espoused by Socrates 2,000 years earlier. (p. 26)

Cellist Yo-Yo Ma said he’s often asked how he keeps his repertoire fresh, even after playing a piece hundreds of times. “I play as if it were the last time I will play that piece,” he said. Photo by Eric Bronson, Michigan Photography.

He includes the creative hypotheses by the towering scientist-astronomer, Johannes Kepler, who unknown to the majority of our society, hypothesized that the ordering of the solar system was derived from musical harmonies. (p. 53) Kepler’s great astronomical discovery of gravity and the spacing of the orbits of the planets is presented in his book, “The Harmony of the World” (1619).

In the book’s final chapter “Imagination and Choice,” Kabanda underscores an essential conception to understanding economic progress.

“Now when the people began to search for the wisdom behind progress, in the end it was not whether development came first and then the arts followed. Or some sort of miraculous statistical formula. Much of it was imagination in thought and deed. Imagination was the future, and the future was imagination. It was [and is] the cradle of civilization…this finale is a call to imagine the future we need.” (p. 221 emphasis added)

 Kabanda points to the personality of Albert Einstein to demonstrate the unity of science and imagination. Einstein was known to resort to taking up his violin to kindle his imagination to explore scientific hypothesis. He quotes Einstein: “Logic will get you from A to B. Imagination will take you everywhere.” (p. 223).

All great art and scientific discoveries first emerge in the creative imagination. A true leader, a statesman, also relies on his or her creative-imagination. When he or she implements policies in the present they ought to be derived from a vision of what the future should look like seen through the mind’s eye.

Axiomatic Flaws

Despite many useful and challenging ideas presented in “The Creative Wealth of Nations” there are flaws in sections of Kabanda’s thesis. However, to be fair, these shortcomings are unfortunately endemic to our corroded culture.

Not all cultures i.e. music and art are good for society. Applying the criteria, which we developed above, we should rightly ask; does a particular culture nurture the creative powers of the mind? For example, the rock-drug counterculture ushered into the West in the 1960s was destructive, and its damaging effects still linger in today’s baby-boomer generation. Music is not good because it is music, or art because it is art. Todays’ music is in large part debasing and degrading to the human mind. Profits made from the music industry do not add value to the economy if their music assaults our soul-mind and undermines our creative capacity.

On a deeper level, Kabanda errs in Chapter 3, “The Arts and Environmental Stewardship,” when he writes: “The arts have long had a sense of stewardship towards protecting the environment and mitigating climatic change.” (p. 72) Contrary to present day popular culture, mankind’s relationship to the physical universe is much more than being a steward or custodian. Human beings lawfully transform the physical environment. Consider the injunction given to mankind in Genesis 27: “Be fruitful and multiply, and fill the earth and subdue it; and have dominion the fish of the sea and over the birds of the air and over every living thing that moveth upon the earth.”

Humankind is not meant to be a just a caretaker, but has dominion and the power to subdue. The universe is organized to respond to willful human cognition, transforming the biosphere into the nooespshere, according to Russian scientist, Vladimir Vernadsky. Humankind with the unique power of creative mentation, was not put on this planet to act as a glorified groundskeeper. When we exercise our creative potential, we humans are the most powerful living force in the universe.

Scientist Albert Einstein with his violin

Accepting the axioms of Adams Smith’s notions about economy and society leads us down the wrong path. Kabanda alludes to Smith’s “Theory of Moral Sentiments favorably as he does with his Wealth of Nations” (p. 49) It is in the “Theory of Moral Sentiments” that Smith presents his most hedonistic description of human nature, reducing humankind to being governed by animalistic instincts, rather than human creativity. Quoting Smith:

“The administration of the great system of the universe … the care of the universal happiness of rational and sensible beings, is the business of God and not of man. To man is allotted a much humbler department, but one much more suitable to the weakness of his powers, and to the narrowness of his comprehension, they are of his own happiness, of that of his family, his friends, his country…. Nature has directed us to the greater part of these by original and immediate instincts. Hunger, thirst, the passion which unites the sexes, the love of pleasure, and the dread of pain, prompt us to apply those means for their own sakes, and without any considerations of their tendency to those beneficent ends which the great Director of nature intended to produce by them.”

Smith’s economic assumptions flow from his degraded, amoral conception of human beings as mere creatures of pleasure and pain. For that reason alone, we know his dogma could never be a successful prescription for how an economy develops. At its core, Smith’s doctrine is antithetical to the lawful relationship between humankind and the physical universe.

Let the Discussion Begin

Kabanda deserves a great deal of praise and credit for focusing our attention on the relationship of culture, and creativity to economics. His endeavor is far more relevant to our economic well-being than the trillions of dollars gambled on the gyrations of the stock market. For civilizations to continue to exist, society’s culture must unceasingly produce creative individuals. If we want a more prosperous and stable world for our children and their children, then we need citizens from all nations to engage in a robust debate of the role of culture in our society. If this book helps spark such a discussion, then Kabanda’s contribution has served an invaluable function.

Lawrence Freeman is a Political-Economic Analyst for Africa, who has been involved in the economic development policy of Africa for 30 years. He is the creator of the blog: lawrencefreemanafricaandtheworld.com

 

New Economic Order Required to Combat COVID-19 in Africa

COVID-19 will spread in Africa (courtesy theconversation.com)

New Economic Order Required to Combat COVID-19 in Africa

Lawrence Freeman

March 30, 2020

As of March 30, 2020, the Africa CDC reports the total number of COVID-19 cases-4,760, deaths-146, and recoveries-355. The totals for individual nations vary from higher levels:  Algeria 511 cases and 31 deaths; Egypt 609 and 40; Morocco 479 and 26, South Africa 1280 and 1; Nigeria 111 and 1 (cases and deaths respectively); to dozens of nations reporting 10 or less cases and 0 deaths. Africa CDC COVID-19

While these figures for Africa are significantly lower than nations in Europe, Asia, and North America, in some cases orders of magnitude lower, there is reason for great concern for the spread of the Coronavirus throughout the African continent. Many African nations are unable to adequately test their citizens, and one should assume the number of cases is vastly unreported. Also, there unique features of African society that present an impediment to isolation of those infected with COVID-19, and social distancing. African society are centered around crowded mass markets, and culturally Africans are prone to show their friendliness towards others by holding hands.

Factoring in a weak healthcare system, poor nutrition, inadequate housing, lack of electricity and clean water, and already prevalent existing diseases (HIV AIDS, Malaria, TB) in the population, COVID-19 could propagate very rapidly, overwhelming an insufficient number of beds, hospitals and doctors. For Africans, the consequences of the proliferation of COVID-19 could be catastrophic, resulting in higher levels of mortality and morbidity than we have presently experienced.

Debt Restructuring Necessary for Africa’s Health

In response to the COVID-19 pandemic, for the first time in many years, African leaders are demanding a restructuring of the onerous debt, whose payment has diverted nations’ revenues away from investing in vital categories of infrastructure, including healthcare. Payment of debt, mere loans, cannot be, to quote from William Shakespeare’s Merchant of Venice, “the pound of flesh” used to kill people. Tragically, since African nations liberated themselves from European colonialism, debt has been used as a weapon to repress the development of emerging nations.

On March 24, the office of the Ethiopian Prime Minister, Dr Abiy Ahmed, released an incisive three point proposal to the G20 nations outlining necessary actions to be taken to safeguard African nations during this pandemic. He began by dramatically stating the truth, “COVID-19 poses an existential threat to the economies of African countries. Our economies, fragile and vulnerable even in the best of times will face serious shocks.” He than discussed a crucial underlying constraint imposed on African nations, “the heavy debt burden, the servicing of which alone costs many of them [nations] significantly more than their annual health budgets.”

Prime Minister Abiy requested from the G20:

  • $150 billion “Africa Global COVID-19 Emergency Financing Package”
  • “Global Africa Health Emergency Package”
  • “Debt resolution and Restructuring Package.”

Elaborating on debt restructuring, Prime Minister Abiy wrote, “Ethiopia proposes all interest payments to government loans should be written off. We suggest the remaining debt be converted into long term low interest loans with 10 years grace period before payments. All debt payments will be limited to 10% of the value of exports.”

The theme of restructuring Africa’s debt to deal with the present crisis, was also discussed in a virtual conference of African finance ministers on March 19, according to the United Nations Economic Commission for Africa (UNECA).  To battle COVID-19, the ministers said, “Africa needs an immediate emergency economic stimulus to the tune of $100 billion” The UNCEA reports that they are asking that $44 billion, almost fifty percent of the funds requested, would come from halting payments of debt service, and in the most fragile nations to the loan principal as well.  African Finance Ministers Discuss Debt

In an insightful column, published in the March 25th edition of the Financial Times, Prime Minister Abiy again raises the necessity of debt alleviation: “Building on what has been announced by international financial institutions, the G20 must launch a global fund to prevent the collapse of health systems in Africa. The institutions need to establish a facility to provide budgetary support to African countries. The issue of resolving Africa’s debt burden also needs to be put back on the table as a matter of urgency.” (emphasis added)  PM Abiy “If Covid-19 is not beaten in Africa it will return to haunt us all”

 

Crowded Nigerian Market (courtesy buzznigeria.com)

 

Emergency Actions Taken

Nigeria—March 18, with 8 confirmed cases, imposed a travel ban on 13 high-risk COVID-19 infested countries; mandated a ban open worship and other public gatherings; mandated compulsory laboratory tests on all staff and members of the national assembly; mandated that public institutions should be equipped with temperature gauge.  All airports in Nigeria are closed to international commercial flights until 23 April.

Rwanda—March 21, with 17 confirmed cases of COVID-19, suspended all arriving and departing commercial flights for 30 days; shutdown of schools, universities, and places of worship for two weeks; the office of the Prime Minister released a list of nine preventive measures.

Ethiopia—March 23, with 11 confirmed COVID-19 cases, enforced a 14 day mandatory quarantine for all travelers entering the country; closed all schools, and banned all gatherings and sports events for 15 days. March 25, Ethiopian President Sahle-Work Zewde ordered that more than 4,000 prisoners be pardoned.

Senegal–March 23, declared a state of emergency.

Ivory Coast–March 23, declared a state of emergency, imposed a curfew from 9:00 pm to 5:00 am, and shut the country’s borders

South Africa—March 26, with over 900 confirmed cases, began a three-week nationwide lockdown; the lockdown is considered one of the strictest, banning alcohol sales, dog-walking, and jogging in public.

In response to the COVID-19 crisis, China has sent to the African Union, 2,000 test kits to be dispersed across the continent, and is expected to send another 10,000, along with medical supplies. China has also launched a new Health Silk Road. On Sunday, March 22, African Union received 1.1 million test kits, 6 million masks, 60,000 medical protective suits and face shields, donated by Chinese billionaire Jack Ma.

Lessons We Must Learn

We can and should learn the following lessons from this contagious and lethal virus. Decisions made by nations for securing their future can now be informed from the very painful consequences of the global spread of COVID-19. If society, had learned the principles of the science of physical economy, instead of being seduced by the “smell of money,” we might very well have been able to avoid the worst of the tragic effects of COVID-19, which continue to plague our planet.  An unprepared and underfunded national economy gives society little chance to deal with any serious crisis, much less a pandemic.

*Globalization has always been a trojan horse, an Achilles heel for the security of any nation. The idea that a nation should gamble its security on the premise of buying necessary commodities from anywhere in the world at the cheapest price was always insane.  Witness today’s disruption of multi-thousand mile long supply chains as proof.

For example, properly understood, feeding one’s population is a matter of national security. African nations have undermined their security and sovereignty by failing to be food self-sufficient. Procuring food from other continents or at great distances across Africa is not only foolish, but totally unnecessary given the fecundity of African soil.  By conservative estimates, African nations spend $35 billion on imported food. A colossal and senseless waste of foreign exchange, which contributes to a nation’s poverty.  And a poor-hungry population is fertile ground for orchestrated destabilizations. Nations are ordered by institutions like the World Trade Organization to buy their food at the cheapest price regardless of domestic consequences.

The alternative to globalization is obvious; each nation has the sovereign obligation to foster productive agriculture and manufacturing sectors. The current pandemic of the coronavirus has brought to the fore the perilous effects of nations dependent upon importing lifesaving products from other nations.

Africa’s huge infrastructure deficit has always been a killer for Africa; literally!  Many of my friends and critics alike have objected to my insistence that the most critical prerequisite for Africa’s development is infrastructure. The most essential human right, is the right to live, and to live as a dignified human being. That is impossible with pathetically low, in some cases, non-existent levels of infrastructure.

Hospital in South Africa (courtesy borgenproject.com)

*Healthcare infrastructure is a necessity to sustain longevity of life—the essence of a human right. It embodies all components of infrastructure, manufacturing, and agricultural industries.

Examine what is necessary to maintain a hospital. Abundant electricity for lights and machines, access to clean water, roads and rail lines to transport patients, advanced medical equipment, a manufacturing sector to produce all the products consumed by hospital staff, food production to feed patients and staff, colleges, medical schools to train nurses and physicians, clothing for patients and staff, protective gear, and the list goes on. Now ask oneself, how many hospitals are there per 100,000 population in Africa?  How many basic hospital beds exist? How advanced intensive care units? If you look at the chart in the link below, which admittedly is several years old, you can see the huge discrepancy in hospital beds per 1,000 people in Africa compared other parts of the world. Hospital Bed per 1,000 in Africa

In the years 2012-2013, the US had 2.9 beds per 1,000 people, Italy 3.9 and Spain 3. All these nations are now experiencing a shortage of beds and all are considered hot spots in this COVID-19 pandemic. Shockingly, in that same time frame, over 25 African nations were recorded to have 1 bed or less per 1,000.

In 1975 the U.S. had 1.5 million hospital beds, and today has 925,000-over half a million fewer. Today the US has an average of 2.5 beds per 1,000 people, and California, Oregon, and Washington have 2 beds or less per 1,000. By contrast, before the outbreak of COVID-19, Wuhan, China had 4.3 beds per 1000, and they have added 10,000 hospital beds since the outbreak began by building several new hospitals.

Think for a moment would kind of investment in infrastructure, production, and labor that would be required for African nations to even reach the insufficient US level of hospitals and beds. How many hundreds of thousands of megawatts of electricity would have to be generated to supply these new hospitals? How many million gallons of water would be required? Africa has never built up a minimum healthcare infrastructure and is woefully unprepared should the pandemic surge on the continent in the weeks and months ahead.

 As we are witnessing today, the West is suffering greatly from the deliberate slashing its own healthcare infrastructure over recent decades. This has been accomplished through austerity, shortsightedness, and an indecent obeisance to a desire to make fast-money by gambling on Wall Street.

*State government intervention has risen to the fore during this scourge of COVID-19, despite decades maligning the role of the state. It is now clear that contrary to the false claims that the state has no role in the world of neo-liberalism, laissez-faire, and unregulated free-trade, government supervision and government credit-debt to sustain people and the economy have proofed invaluable and lifesaving. Putting aside the multi-trillion dollar bailout to the global gambling casino known as the financial system, governments have issued emergency funds necessary to maintain society. Much more government intervention will be required to save lives in the weeks and months ahead.

Globalization (courtesy thegeopolitics.com)

 A New Just Economic Order       

Prime Minister Abiy’s column in the Financial Times beseeches the need for a coordinated global response to COVID-19:

 “There is a major flaw in the strategy to deal with the coronavirus pandemic. Advanced economies are unveiling unprecedented economic stimulus packages. African countries, by contrast, lack the wherewithal to make similarly meaningful interventions. Yet if the virus is not defeated in Africa, it will only bounce back to the rest of the world. 

That is why the current strategy of uncoordinated country-specific measures, while understandable, is myopic, unsustainable and potentially counter-productive. A virus that ignores borders cannot be tackled successfully like this.

We can defeat this invisible and vicious adversary — but only with global leadership. Without that, Africa may suffer the worst, yet it will not be the last. We are all in this together, and we must work together to the end.”

His comments implore the urgent necessity for an entirely different global approach to be taken by nations. We must absorb the horrible reality of today’s deadly crisis to motivate our passions to create a better future for civilization.

For humanity to survive, we can no longer tolerate living in a world governed a geo-political doctrine that views other countries crudely as either friend or foe, with winners on top and losers underneath.  We can no longer live in a system that values mere money above human life. Look at Sudan, whose people are suffering, while Western institutions led by the International Monetary Fund use Sudan’s $53 billion in (unpayable) debt as weapon to dictate their “reforms.”

Months before COVID-19, the United Nations asked for $135 million to fight the unprecedented Desert Locust threatening the food supply in Kenya, Somalia, and Ethiopia. The fund is still $100 million short of that goal. The UN has called the locust swarm in East Africa “extremely alarming.” Tthe current pandemic is affecting the ability for African nations to obtain the minimal equipment and pesticides required.

We must bring into creation a new model for governing. A new paradigm that values human life above all else. One that acknowledges the universal moral resemblance of all human beings.

The call for a New Just World Economic Order was first articulated in the 1970s and has been echoed for decades by world leaders. All foreign, domestic, economic policy should be formulated upon the recognizable principle that all people share a common aim and destiny. We, the human race, are unified by our endowed unique quality; the power of reason-creative imagination.  To resolve the multiple crises facing humanity, including a meltdown of the global financial system, it is urgent that an international conference be convened to establish a new template for economic and political relations among sovereign nations. The foremost underlying principle for such deliberations is acknowledging that the aspiration of all nations should be the elevation of human creative life. For all peoples.

Lawrence Freeman is a Political-Economic Analyst for Africa, who has been involved in the economic development policy of Africa for 30 years. He is the creator of the blog: lawrencefreemanafricaandtheworld.com

 

Is the Trump Administration Violating Ethiopia’s Sovereignty?

(Courtesy Ethiopian Foreign Ministry FACEBOOK)

Is the Trump Administration Violating Ethiopia’s Sovereignty?

Lawrence Freeman

March 10, 2020

In the first week of March, representatives of President Trump’s administration presented conflicting responses on Ethiopia’s right to operate the Ethiopian Grand Renaissance Dam (GERD) for the production of electrical power for the nations of East Africa. The construction of the GERD is over 70% complete and is expected to commence operation in 2021, with a capacity to generate 6,200 megawatts of electricity.  The GERD built near the border of Sudan, will be filled by water from the Blue Nile, that flows from Lake Tana, located in the mountainous region of Ethiopia. Ethiopia cannot be deprecated for exercising its sovereign right to exploit its most important resource, water, for the benefit of its people, and neighboring African nations.

Ethiopia and the two downstream nations, Sudan and Egypt, have been involved in discussions that now primarily focus on the “fill rate”-how much water is withdrawn each year from the Blue Nile to fill the GERD’s 79 billion cubic meter reservoir. Egypt is justifiably concerned about how the reduced flow of the Blue Nile resulting from filling the reservoir will affect the level of water reaching Egypt’s High Aswan Dam.  The Blue Nile contributes 85% of the Nile’s volume of water when it joins the White Nile just north of Khartoum.

Without harming downstream nations, the GERD requires a minimal fill rate to permit the generation of electricity. Egypt, claiming that filling the GERD reservoir with water from the Blue Nile will cause hardship for its people, has made excessive demands on Ethiopia to guarantee an unreasonable allocation of the Nile’s water. This is principally an issue to be resolved by the engineers in the technical committees of the three nations.

Since December, the Trump administration has hosted, several meetings of the three nations in Washington, under the auspices of the US Treasury Secretary, Steve Mnuchin. Secretary Mnuchin’s involvement was to be as a neutral observer, not a mediator. However, recent written and oral statements from Mnuchin, and the Treasury Department, has called into question the impartiality of the US. Retired Ambassador David Shinn’s blog of February 29, he questioned whether, the United States seems to be “putting its thumb on the scale in favor of Egypt.”

Mnuchin Not Impartial

Following the decision by the Ethiopian delegation not to participate in the February 27-28 meeting with Sudan and Egypt, Mnuchin publicly tipped his hand in favor of Egypt. In a February 28th letter, the U.S. Department of the Treasury wrote that Egypt initialed an agreement on the GERD, and instructed Ethiopia that “final testing and filling should not take place without any agreement.”  Feb 28 letter by Secretary of the Treasury on the Grand Ethiopian Renaissance Dam.  The truth is, there is no existing document to be initialed or signed, because such an agreement can only come about as the fruitful result of the participation by the representatives of all three nations.  Mnuchin, has no legal or political authority to instruct Ethiopia about the functioning of the GERD.

The next day, on February 29, Ethiopia’s Ministry of Foreign Affairs rebuffed Mnuchin’s letter: “The ‘text’ reportedly initialed by the Arab Republic of Egypt in Washington D.C. is not the outcome of the negotiation or the technical and legal discussion of the three countries.” The Foreign Ministry wrote: Ethiopia as the owner of the GERD will commence first filling of the GERD in parallel with the construction of the Dam in accordance with the principles of equitable and reasonable utilization and the causing of no significant harm as provided for under the Agreement on the Declaration of Principles (DoP).”

On March 3, testifying before the House Ways and Means committee, Mnuchin was even more blatant in his disregard for Ethiopia’s sovereignty over the GERD. Congressman Steven Horsford (D-Nev) asked Mnuchin to correct the narrative that the US is not trying to impose its will on Ethiopia and requested a balanced approach towards all the core nations involved. Mnuchin brazenly responded, “Ethiopia should not fill the dam until there is an agreement signed.” Presently, Egypt, Sudan, and Ethiopia have not formulated any agreement to be signed. Clearly, Mnuchin has without any mandate, expanded his role as a neutral moderator to an advocate for Egypt’s position.

(Courtesy of Yale Environment 360)

State Department Doesn’t Agree

On the very same day that Mnuchin was infringing on Ethiopia’s sovereignty, another branch of the Trump administration, the U.S. State Department, had a different response to the GERD negotiations. On March 3, the Woodrow Wilson Africa Program sponsored a forum, The Trump Administration and U.S. Africa Policy: What has been accomplished and what lies ahead? The speaker was Tibor P. Nagy, Jr., Assistant Secretary, Bureau of African affairs, an experienced ambassador to Africa. I was able to question him about the US position towards Ethiopia. Specifically, I asked, since President extols national sovereignty for the U.S. and repeatedly exalts “America First,” wasn’t it a double standard to deny Ethiopia the same sovereign rights regarding the GERD? Nagy then flatly contradicted Mnuchin, when he answered, “What I can say is that the U.S. has consistently said we are neutral in that whole business.” Nagy’s boss, Secretary of State Mike Pompeo, in Addis Ababa on February 18, said “A great deal of work remains, but I’m optimistic that over the coming months we can resolve this.” Clearly Nagy and Pompeo are not operating on the timetable of President Trump and Mnuchin who wanted the deal resolved by the end of February.

Sudan Differs With Egypt and Arab League

Mnuchin’s letter of February 28, implies that Sudan supported the so called agreement written without Ethiopia’s participation. Sudan in fact refused to add its initials to those of Egypt on the agreement. This indicates that it was only Egypt, just one of the three nations involved, who with Mnuchin, took this stance.

According to an article from Middle East News Agency (MENA), Sudan rejected a resolution from the Arab League supporting Egypt’s position regarding the GERD on March 5. MENA reports that Sudan, “asked not to include their name in the decision [resolution], and added that decision is not in Sudan’s interest…”   (emphasis added.) At the Arab League Summit, Sudan formally withdrew its name from the resolution criticizing Ethiopia.

Ethiopia’s Ministry of Foreign Affairs responded to the Arab League resolution in a strongly worded statement on March 6. They wrote, “Ethiopia expresses its profound appreciation to Sudan’s principled position that helps advance win-win solutions for all parties involved through a commitment to open dialogue. Ethiopia reiterated that it “has the right to use its Nile water resource to meet the needs of the present and future generations.” March 6 Statement on Arab League

Africa Needs Energy

Once the GERD is completed, it will have the capacity to produce 6,200 megawatts of electrical power. This will benefit not only the people of Ethiopia, but also those nations of the Horn of Africa and beyond. Sub-Saharan Africa needs energy, and lots of it-minimally 1 million additional megawatts. It is a matter of survival. Without abundant and accessible electricity, African nations will not develop, and thus be subjected to various forms of destabilization due to rising unemployment of its youth and persisting poverty. Ethiopia has taken a bold step in constructing the largest hydro-electric dam in Africa intended to develop the Nile River Basin. All existing difficulties can and must be resolved in a dialogue among the three principal nations, who share this majestic historic waterway, the birthplace of ancient civilizations.

There is no intrinsic conflict between Ethiopia and the down stream nations of Egypt and Sudan, as Sudan has already implicitly recognized.

It is appropriate here to repeat what I wrote last October: “How many years will it take to fill the GERD’s reservoir, and what will be the flow rate of the Nile at the Aswan Dam, are yet to be resolved. These are technical matters that scientists and engineers must continue to examine in an atmosphere of good will and good faith. Such cooperation is essential to promote the common interests of all nations for a prosperous Nile Basin.” Grand Renaissance Dam Essential for Africa’s Economic Growth

Lawrence Freeman is a Political-Economic Analyst for Africa, who has been involved in the economic development policy of Africa for 30 years. He is the creator of the blog: lawrencefreemanafricaandtheworld.com

 

Ethiopia Launches New Economic Reform Agenda

November 21, 2019

Ethiopia Launches New Initiatives To Expand Its Economy

Lawrence Freeman

In the last decade, Ethiopia, the second most populated nation in Africa with over 100 million people, has become a leader in economic growth. This is the result of the leadership’s commitment to the continuation of the previous government’s developmental state model, which directed public credit to finance vital infrastructure projects. Now, under new leadership, innovative initiatives are being launched to sustain and expand Ethiopia’s progress.

On September 9, 2019, Prime Minister Abiy Ahmed unveiled his nation’s “Homegrown Economic Reform Agenda” (Homegrown Reform) at the United Nations Conference Center in Addis Ababa. Its primary goal is to expand the nation’s economic capabilities, and create employment opportunities for millions of unemployed youth. Addressing the audience, Prime Minister Abiy said: “The Reform Agenda is our pro-job, pro-growth, and pro-inclusivity pathway to prosperity.” To achieve these objectives, this new initiative proposes to entice private investment in the following sectors; agriculture, manufacturing, mining, tourism,  and Information and Communication Technology- (ICT). Key goals of the agenda’s macroeconomic reforms are, curbing inflation that is averaging over 15% in the last four years, increasing foreign currency, improving access to finance, and debt sustainability.

Home Grown Initiative

The Homegrown Reform Agenda is not meant to be a replacement for Ethiopia’s Growth Transformation Plans II (GTP II), which covers the period from 2014-2019.

Ethiopia, aims over the next three years, to attract $6 billion in new soft loans and $4 billion in debt reduction from multilateral and bilateral institutions to alleviate the country’s financial constraints. According Fitsum Arega, Ethiopia’s ambassador to the United States, “many industries are operating below capacity for lack of foreign currency to pay for imports.”

For Ethiopia to advance to the next stage of development certain imbalances and bottlenecks in the economy have to be corrected, which the Homegrown Agenda intends to accomplish through macro and fiscal reforms.  The number one constraint to growth cited by manufacturing firms, is the shortage of foreign exchange. Access to financing, inefficiency in government, and insufficient infrastructure are also leading constraints to doing business in Ethiopia.  In an effort to address these limitations, the Homegrown Reform intends to shift from relying exclusively on public sector investment, which has led to a rise in Ethiopia’s debt, to promoting private sector financing.

Another area of concern for the government is relying on inefficient state-owned firms. A case in point is the military-run industrial conglomerate METEC, which is being investigated for corruption and suspicion of misappropriating public funds.

To complement the new reforms, it is recommended that the government make additional efforts to; discipline public expenditures, attract remittances through legal channels, and end contraband.

Ethiopia On The Road of Progress

The following indicators of economic growth are reported in    A Homegrown Reform Agenda: Pathway to Prosperity power-point. From 2004 to 2015, Ethiopia succeeded in reducing the percentage of people living in poverty-$1.90 per day or less- from 39% to 24%. From 2004 to 2018 per capita income grew from $200 per day to over $800. During that same time frame, child mortality (under age 5) decreased from 123 to 55 per 1000 live births, and life expectancy increased from 56 years to 66.  And from 2005 to 2016 the percentage of the population with access to electricity rose from 14% to 43%–a 300% increase.

Ethiopia aspires to reach the status of a “lower middle income” nation by 2025. This is an ambitious goal that will require; raising yearly per capita income from its levels of $856 to $2,219, reducing poverty from 27.3 % of the population to 13.8%, and increasing access to electricity to 86% of its citizens. For Ethiopia to achieve its objective in the next five years, it needs to mechanize its agriculture sector to be more productive and less labor intensive, and increase manufactured exports five-fold.

Ethiopia’s Job Offensive

Simultaneously, Ethiopia’s leadership is tackling the critical issue of unemployment, especially for the growing number of college educated youth, who are seeking jobs and upward mobility. Ethiopia’s Jobs Creation Commission-(JCC) announced on October 30, a bold plan to create 14 million jobs by 2025, and a total of 20 million new jobs by 2030. This will provide employment opportunities for millions of new entrants into their labor force. The government intends to create 3 million jobs in the budget year that began this July.

In partnership with the JCC, Mastercard Foundation presented its Young Africa Works Initiative–committing $300 million to assist in this job creation program.  Their focus will be generating new employment opportunities in the ICT and Small Medium Enterprises-(SME) sectors. According to the JCC website: “The Young Africa Works in Ethiopia is an initiative that will enable 10 million young people to access dignified and fulfilling work by 2030…It was designed in partnership with the government, the private sector, academic institutions, and young people and; is currently aligned with the Ethiopian government’s plan to create new jobs to spur economic growth.”

Economics and the Nation State

Ethiopia’s economy has been growing at a faster rate than other sub-Saharan nations. However, its prolific university system is graduating more young people than Ethiopia’s economy can employ. Simply put: despite the progress that Ethiopia has accomplished in reducing poverty and building physical infrastructure; the economy is not growing at a level fast enough to accommodate its large and expanding population.

Frustration over the slower than desired rate of development is being expressed by various elements of society. Economic well-being is a substantial motivation that underlies the anger by ethnic movements at those in power. Ethnic groups believe it is necessary to have “their leaders” in charge, in order to ensure a bigger slice of the “economic pie.” People, who judge that they are being economically neglected or marginalized can become desperate, and thus susceptible to being manipulated and aroused to take action against their own government.

To avoid such instigated conflicts, the only real and lasting solution is to create a “bigger economic pie” that equally satisfies the needs of all people regardless of geographical region or ethnicity. It is the unique responsibility, nay obligation, of the nation state to provide for the “general welfare” of its people and their posterity, as beautifully articulated in the preamble to the US Constitution. The nation state transcends (not negates) regionalism, ethnicity, and religion. Its primary concern is the continued existence of a single sovereign Ethiopian nation with one integrated and unified people.

The government is responsible for ensuring that every Ethiopian has the  necessities of food and shelter, and the opportunity for a meaningful life for oneself and one’s progeny. Deliberating on the best pathway to achieve these goals is the responsibility of every citizen. It is in the self interest of all Ethiopians to collaborate in securing a prosperous future for their nation.

Lawrence Freeman is a Political-Economic Analyst for Africa with thirty years of experience in Africa promoting infrastructure development policies.

 

Ethiopia to Djibouti Railroad Successfully Growing Ethiopia’s Economy

Ethiopia to Djibouti Railroad Successfully Growing Ethiopia’s Economy

The Chinese-African built railroad from Addis-Ababa to Djibouti has been a success, as I knew it would. Inaugurated in October 2016, it has  allowed Ethiopia to effectively overcome being a landlocked nation. Railroads increase productivity, create growth, build cities, and establish new manufacturing-agricultural centers. Africa will be transformed-industrialized when it is able to generate hundreds of thousands of megawatts of electricity and build tens of thousands of kilometers of rail lines connecting major capitals, cities, and ports across the continent. Ethiopia has been a leader in economic growth by investing in vitally needed infrastructure, such as the Grand Ethiopian Renaissance Dam-GERD, to begin operation in late 2020.

Railroads across Ethiopia will increase its import and export capability.

Roundup: Ethiopia-Djibouti railway adds impetus to Ethiopia’s agricultural economy

ADDIS ABABA, Oct. 18 (Xinhua) — The Chinese-built Ethiopia-Djibouti railway has won acclaim for facilitating landlocked Ethiopia’s import-export necessities.

For the past more than one year, it has transported much-needed agricultural inputs to Ethiopia’s agriculture-dominated economy.

Tilahun Sarka, Director-General of Ethiopia-Djibouti Standard Gauge Railway Share Company (EDR), said in a recent interview with Xinhua that the 752 km-long Africa’s first transnational electrified railway is leveraging the smooth transportation of Ethiopia’s major import and export commodities, mainly fertilizer and wheat.

“The railway is showing major progress in terms of facilitating Ethiopia’s basic import-export activities as it significantly reduced both the travel cost and time from landlocked Ethiopia to ports in its neighboring Djibouti,” Sarka told Xinhua.

The Ethiopia-Djibouti railway commenced its commercial operations for both passenger and freight services in January last year, eventually connecting landlocked Ethiopia to ports in the Red Sea nation of Djibouti.

The EDR director underscored the railway’s achievements over the past one and a half years, with particular emphasis on easing the pressure in transporting the much-needed imported agricultural and food security inputs, mainly fertilizer and wheat, from ports in Djibouti all the way to the Lebu Railway Station on the outskirts of the Ethiopian capital Addis Ababa.

Figures from ERD show that the Ethiopia-Djibouti railway has been able to carry more than 70,000 tons of fertilizer from the Djibouti port to Ethiopia over the past few months, as the East African country embarked with its main harvesting season since May.

“Fertilizer is a very important commodity to Ethiopia’s socio-economic well-being,” Sarka said, adding “It is by far considered as a major imported priority item by the Ethiopian government.”

Ethiopia – Africa’s second populous nation with about 109 million total population, according to the World Bank’s latest report – is an agrarian economy.

The UN Food and Agriculture Organization (FAO), which described Ethiopia as “one of the top-performing economies in Sub-Saharan Africa with an average growth rate of 11 percent over the last seven years,” dubbed the agriculture sector as “the mainstay of the Ethiopian economy, and exports almost entirely relies on agricultural commodities.”

Sarka, who dubbed fertilizer as a “political cargo,” also said that “a failure to import the much-needed fertilizer would adversely affect Ethiopia’s overall security, as far as igniting public uproar against the Ethiopian government.

Sarka also emphasized the joint Ethiopian government and EDR’s future plan that envisaged “to significantly boost the railway’s share in the transportation of fertilizer to the country.”

“Both the Ethiopian government and EDR give particular emphasis to the smooth transportation of fertilizers from the Djibouti port to Ethiopia, as well as the export of other export-bound agricultural commodities from Addis Ababa and other parts of Ethiopia to the port,” Sarka said.

Ethiopia imported a total of about 1.3 million tons of fertilizer during the just-concluded Ethiopian 2018-2019 fiscal year, according to figures from the Ethiopian government.

Built by two Chinese companies, the first 320-km of the project from Sebeta to Mieso was carried out by the China Railway Group Limited (CREC), while the remaining 423-km from Mieso to Djibouti port section was built by the China Civil Engineering Construction Corporation (CCECC).

The Ethiopia-Djibouti railway is presently managed by a consortium of Chinese companies – CREC and CCECC – for a period of six years undertaking railway operation and maintenance management activities.

According to Sarka, the six-year contract was given to the two Chinese firms mainly due to the shortage of electrified railway operation and management experience in the two involved countries.

Ethiopia-Djibouti Railway

United Nations Conference: The Lake Chad Basin Should not be ‘Managed’; it Should be ‘Transformed.’

August 19, 2019

United Nations Headquarters, August 5-6, 2019

On August 5-6, I had the opportunity to participate in the “Third International Conference on the Lake Chad Basin Region: SDG Implementation-UN System and Non-State Actors Exploring New ways of Cooperation.” The two-day conference at the United Nations Headquarters was hosted by the Permanent Mission of Nigeria to the United Nations, under the guidance of Dr. Ibrahim Umar. The assemblage was first addressed by ambassadors from three of the nations of the Lake Chad Basin; Permanent Representatives from the UN Missions of Chad, Niger and Nigeria.

Lawrence Freeman with Dr. Ibrahim Umar, Nigerian Mission to the United Nations

The convening of this UN session is in response to the worsening living conditions for approximately 30 million Africans living in the Lake Chad Basin, whose livelihood is centered around the shrinking Lake Chad. Today the estimated area of Lake Chad varies from 1200-1300 square kilometers to upwards of 2,000; a 90% contraction from its 1963 level of 25,000 square kilometers.  During the afternoon panel of the first day, the conditions of Lake Chad were addressed by Charles Ichoku, Professor of Earth and Environmental Sciences at Howard University, and this author, who is Vice Chairman of the Scientific Advisory Committee of the Lake Chad Basin Commission.

Transforming is Superior to Managing 

Dominating the conference were speakers representing NGOs and international organizations, who accurately depicted the extent of the horrific humanitarian, refugee, and food crises prevailing in the region in detail. Regrettably, there were those who accepted the diminutive size of Lake Chad as unalterable. Some of the participants offered short term solutions and others believed that the recharging of the lake is not an easy or viable option. However, they miss the point; that to comprehensively address the issue of the Lake Chad Basin will require nothing less than the full recharging of Lake Chad. It is only in this way that the humanitarian issues, poverty and underdevelopment can be tackled in the long run. In my presentation I challenged some of the pessimistic thinking in the conference by stating unequivocally: “None of the solutions that have been discussed will work, unless the lake is recharged.” It should be noted that United Nations Secretary-General, Antonio Guterres, has pledged to collaborate with President Buhari of Nigeria, to raise the $50 billion necessary for the recharging of the lake.

Lawrence Freeman addressing the United Nations Conference on the Lake Chad Basin on the first day

My slide presentation demonstrated how the lake can be recharged to its previous level through Transaqua, an inter-basin water transfer project. Transaqua, designed in 1980 by Dr. Vichi of the Italian engineering firm, Bonifica, proposed to build a 2,400-kilometer canal created from 5-8% of the water in the Congo River Basin. The navigable gravity-driven canal would connect to the Chari River, in the Central Africa Republic, which releases its flow into Lake Chad. This bold innovative project is a “win-win” for the twelve nations of the Lake Chad and Congo River Basins, and for all of Africa. Responding to the necessity of recharging the shrinking Lake Chad, the project provides a unique opportunity to create a super economic “development zone” amongst the nations of the two basins. Trade, and commerce would increase by orders of magnitudes, hydroelectric power would be produced, millions of additional hectares would be irrigated, new roads created, new fisheries and manufacturing centers would be built. This author also presented to the audience the conclusions from the three-day International Conference to Save Lake Chad, held in Abuja Nigeria-February 26-28, 2018, at which the Heads of State from the nations of the Lake Chad Basin, endorsed Transaqua as the preferred method to expand the lake.

Both before and after my presentation numerous presenters spoke out against “big projects” and “diverting water” as if the Africans suffering in the region want the lake to remain at 10% of its previous level. International intervention and technology to alleviate the conditions in the basin were also eschewed in favor of local projects and listening to the so called “voice of the people.” Manage! Manage the existing deplorable conditions; don’t even dare think of changing-improving was echoed repeatedly.

On the second day, this author was compelled to speak out against the condescending attitude that assumes Africans do not want to enjoy the same standard of living as all the speakers from the US and Europe. I asked, if they thought that those people struggling for daily survival within the Lake Chad Basin wouldn’t desire clean running water, and having access to 1,500 watts of electricity 24 hours a day all year?

 

A slide presented by Mr. Freeman at the UN conference displaying the Transaqua inter-basin water transfer project

Underlying Cultural Beliefs About Mankind

Approximately five to six thousand years ago Lake Chad was a mega lake comprising 1,000,000 square kilometers. There are reports that several hundred years ago, Lake Chad almost disappeared. The lake sits on top of three aquifers and are adjacent to the gigantic Nubian Sandstone Aquifer.  Clearly the growth and shrinkage of the lake over millennia predates so called anthropomorphic caused climate change. Lake Chad is fed by river systems from Nigeria and Cameroon, the most significant contributor being the Chari River from the Central African Republic. With the southern movement of the Tropical Conversion Zone there is less rainfall thus reducing the flow of water into the lake. The closest source of water to refill and maintain Lake Chad is the super moist Congo River Basin, hundreds of kilometers south. A feasibility study should confirm the Transaqua hypothesis for the potential of a continuous flow of water into Lake Chad, resulting in transforming the entire region.

The failure to test and analyze the Transaqua proposal for almost four decades, even though many people were concerned about the worsening conditions resulting from the shrinking lake, leads us to examine a deeper cultural problem.

Over the last half century, Western societies have become victims of cultural pessimism. Our cultural paradigm has shifted away from one of optimism and confidence in human’s ability to discover new scientific principles that lead to technological revolutions for the betterment of humanity. In the years following the historic 1969 landing of humans on the Moon, inspired by the leadership of President John Kennedy, our culture has been dramatically altered for the worse. The previously discredited Malthusian dogma reasserted itself, with false assertions that if population growth was not stopped the planet would run out of resources. This was accompanied with hysterical calls for population reduction. Over time, as our culture became more decadent, the very progress of our society was assailed with attacks on science, technology, and industrialization.  In this new perverted ideology humankind, (made in the image of the Creator) became the devil-the source of evil itself in the world.

Ambassador Tijjani Muhammad Bande speaking at a reception hosted by the UN Nigerian Mission for the Lake Chad Basin conference

Contrary to declarations  that humans are destroying the environment, there is no such adversarial relationship. The physical universe is organized on the principle of continuous development and is predisposed to respond positively to the intervention of human creativity. Humankind is not just a caretaker or a steward. Humanity was created to interact with the universe for unending growth. Reflect on the biblical injunction in Genesis 1:28: “Be fruitful and multiply and fill the earth and subdue it and have dominion over the fish of the sea and over the birds of the heavens and over every living thing that moves on the earth.”

Yes, we can and must transform the Lake Chad Basin. We can end suffering, hunger, and poverty in that region, and across the African continent. That is what humankind was created to accomplish. Let us not reject our fundamental human essence: to willfully transform our planet (the universe) for the perpetuation of our uniquely creative species.

 

Distributed at the UN conference reported on above: UN Statement on Transaqua for Lake Chad

Distributed at the Abuja, Nigeria conference 2/26-28/2018:  Now Is the Time to Think Big and In the Future 

China is NOT Exploiting Africa, But Investing in its Future: The Case of Nigeria

The article below, “Nigeria’s balanced and diverse relationship with China is key to sustainability,” provides a useful examination of the healthy bilateral relationship that China has developed with Nigeria, especially during the administration of President Buhari.  It is also important to note that Nigeria has officially joined China’s Belt and Road Initiative in January of this year. (excerpts below followed by a link to complete article)

1)    Infrastructure

Nigeria has one of the largest infrastructure deficits in the world; two thirds of the population still does not have access to safe water and over half of the population has no access to reliable electricity. Logistics costs are also extremely high; it costs more to transport a good from Lagos in Nigeria’s South to Kano in the North (1000km), than it does to ship a good from Shanghai to Lagos (over 12,000 km).

Nigeria’s government is investing in infrastructure, but external funding is needed. As cited in the National Integrated Infrastructure Master-plan (NIIMP) developed by Nigeria’s Ministry for Planning in 2015, it is estimated that the country requires $3 trillion over the next 30 years, with $500 billion required in the first 10 years. This estimate, which has wide sectoral scope, is reached by comparing Nigeria’s core infrastructure stock of around 20-25% GDP to international benchmarks of around 70%. Yet, even as the government increased its budget allocation for capital expenditure to 30% in 2017, this remains at least 80% short of the annual amount prescribed by NIIMP.

Alongside self-funding new infrastructure, Nigeria has also looked to the World Bank, European Commission and African Development Bank as sources of infrastructure capital. Yet while they might have the risk tolerance and investment horizons, their capital remains diluted over a number of countries. In its 60 years of operation in Nigeria, the World Bank has invested on average $100 million on infrastructure a year – significant but still a drop in the ocean versus Nigeria’s needs…

3)    Manufacturing    

While Nigeria is the richest economy in Africa, with the largest population and one of the better educated work forces, 4 in every 10 people still remain unemployed. Nigeria needs more inclusive industrialization that creates jobs for all, as opposed to focusing solely on sectors such as oil. Opportunities lie in the manufacturing sector, which creates more jobs through stronger forward and backwards economic linkages than any other sector.

Nigeria is again leveraging its relationship with China here. Some Chinese manufacturers have started relocating production to Nigeria, partly in response to rising wages in China and to take full advantage of the size of Nigeria’s domestic market. Sun Ceramics is one such example; they produce ceramics the size of 10 football fields every day, employ over 1,000 locals and also source all their raw materials from Nigeria. If it weren’t for Nigeria’s difficult business environment, Chinese firms claim they would commit greater amounts of investment.

Stronger ties to stand the test of time.

Nigeria, however, has managed to…build a balanced and more diverse relationship with China. Nigeria’s relationship with China extends beyond resources and infrastructure to security, financial planning and sharing of best-practice in manufacturing, to name a few areas of cooperation. Particularly in the realms of security cooperation; the Chinese have found an area that helps win them local support on the ground in Nigeria given a near-universal desire to eliminate insurgent forces. Nigeria also recognizes that the size of its domestic market offers the largest opportunity in Africa for Chinese companies; and that has helped to improve the balance in the relationship.

It is this combination of balance and diversification that is key to a sustainable relationship with China.

 

Read: Nigeria’s Balanced and Diverse Relationship with China