China Global Television Network, or CGTN published my article on the African Union’s creation of the Africa Continental Freed Trade Area-AfCFTA
Six decades after African nations began liberating their people from the yoke of European colonialists, the African Union has launched the “operational phase” of the Africa Continental Free Trade Area (AfCFTA), taking a giant step toward uniting the 54 African nations and fostering economic progress.
The landmark move was made at the 12th Extraordinary African Union Summit in Niamey, the capital of Niger, on July 7. Moussa Faki Mahamat, chairperson of the African Union Commission, referred to it as a “historic moment.”
Many prominent African leaders view this new free trade agreement as a “game changer” with the potential to catapult the continent into a foremost position in global trade and development, especially with Africa’s population projected to double in the next 30 years to 2.4 billion.
The article below written by a friend of mine is a useful over view of the African Union’s plan to build High Speed Rail-lines in Africa. High-Speed Rail together with the production of abundant supplies of energy are indispensable for the continent’s development and the industrialization of African economies. The link to the entire article that is worth reading follows the excerpts.
“The vital plan for an African Integrated High-Speed Railway Network (AIHSRN), approved by the African Union (AU) in 2014, appears to be going forward energetically. But in fact, Africa is getting only half a loaf at best. Standard gauge rails are being built, but to “save money,” they are not being built to standards permitting the high speeds that the African Union had specified. These “higher”-speed lines are not “high-speed” by any accepted standard. Or, worse, existing lines of the old colonial gauge are being rehabilitated—again because “there is not enough money.”
“Yet having “enough money” is not the problem it seems to be: The principle of Hamiltonian credit—credit extended by government, on the strength of nothing but the skills of the population, and earmarked for projects sure to produce leaps in productivity—has been known in theory and practice for 200 years, even if suppressed by the business schools.” Read my post from earlier this year on Alexander Hamilton: Nations Must Study Alexander Hamilton’s Principles of Political Economy
“AIHSRN is not a master plan for all rail transport in Africa. It is, rather, a plan for rapid rail transport across long distances. And Africa has long distances. To go from Cairo to the Cape of Good Hope by road or rail is more than 10,000 kilometers (6,200 miles)—the equivalent of going from New York to San Francisco and back again.
“Yet with the AIHSRN, an express train could depart from Cairo at 6:30 a.m. on Monday morning, travel at an average of only 220 km/h (137 mph), make only five half-hour stops—at Khartoum, Nairobi, Dodoma (Tanzania), Harare, and Johannesburg—and arrive in Cape Town in time for an early breakfast on Wednesday. The east-west trip from Addis Ababa in Ethiopia to Dakar, Senegal—“only” 8,100 km—will be quicker. The implications of such speed for the African economy—and for African integration in all respects—are enormous.
“The continental plan is for six west-east routes from the Atlantic to the Indian Ocean/Red Sea, and four routes that run from north to south—a 6×4 grid (see map).
“Because of their high speeds, the trains must run on dedicated, standard gauge lines that will not usually accept traffic from other, slower lines of the sometimes denser, surrounding rail network.
“The plan includes the construction of railway manufacturing industries, parts suppliers, maintenance facilities, and the building up of railway training academies.
“The AIHSRN is part of the African Union’s Agenda 2063, a fifty-year plan for the economic, social and cultural development of the entire continent, born in 2013”
You will read below the continued cooperation of Russia and China with Africa in promoting economic growth on the continent. In this respect, the US is largely absent in Africa. President Trump would be wise to correct this flawed US policy, and join Russia and China in engaging in the development of African nations.
Minister for Business Development, Dr Ibrahim Mohammed Awal, has appealed to China not to be a mere trading partner but to also support Ghana’s efforts to become a manufacturing hub in West Africa.
He said while Ghana appreciated and looked forward to growth in the trade relations between the two countries, it was critical for China to prioritize manufacturing in Ghana as well.
Opening the third China Trade Week in Accra yesterday, Dr Awal said his appeal was premised on the government’s industrialization drive as one of the major pillars to Ghana’s accelerated, all-inclusive and sustainable development.
The three-day event was organised by MIE Events, a global event organizer, as a business to business trade show featuring over 100 Chinese manufacturers looking to develop direct trading partnerships and links with local businesses.
It was also a platform for the local business community to explore business opportunities in China to enhance trade cooperation between the two countries.
It is a platform for both Ghanaian and Chinese businesses and brands to increase their visibility, find vendor partners and distributors in each other’s country.
Organizing for First-Ever Russia-Africa Summit in October Underway
The Kremlin announced officially on May 28 that the first-ever Russia-Africa Summit will be held on Oct. 24, 2019, in Sochi. It will be co-chaired by President Vladimir Putin and current chair of the African Union, Egyptian President Abdel Fattah el-Sisi. All the heads of state of Africa are invited to attend, as well as leaders of major sub-regional associations and organizations. An economic forum will be held for Russian and African officials and businessmen the day before (Oct. 23), which some 3,000 African businessmen are expected to attend.
President Putin first proposed the idea of such a summit at the 2018 BRICS summit in South Africa, and his aide, Yury Ushakov, is now chairing the summit Organizing Committee. Russian organizers describe the summit as “of unprecedented scale” for Russia, whose intent is to provide “a strategically important step towards creating the most favorable conditions to develop trade and economic relations and diversity the forms and areas of Russian-African cooperation.”
Preparatory meetings are already being held, including a Russia-Africa Business Dialogue organized as part of the St. Petersburg Forum; a Russia-Africa Economic Forum being held in Moscow yesterday and today, along with the 26th annual shareholders meeting of the African Export-Import Bank, which is being held in Moscow for the first time; and a Russia-Africa Parliamentary Conference on July 1-3. Work started in April on drafting a document to be titled “Russia-Africa: Shared Vision 2030,” involving people from the African continent and Russians.
Editor’s note: William Jones is the Washington Bureau Chief for Executive Intelligence Review and a non-resident fellow of the Chongyang Institute for Financial Studies, Renmin University of China. The article reflects the author’s opinion, and not necessarily the views of CGTN.
With the upcoming visit of Chinese President Xi Jinping to Italy, there will no doubt be some discussion of cooperation between the two nations on the African continent. For Italy, helping to resolve the dire economic situation in Africa is both a humanitarian and an economic concern. The devastated economy in many African countries is bringing more and more refugees to Italy’s shore, and the burden is taking its toll on the Italian economy. For China, Africa has always been a particular concern having shared in the condition of underdevelopment for so many years. Even when both were clearly developing countries, China offered its assistance to its African brothers.
One of the most significant projects in that regard is the Transaqua project. This project would take some of the water from the Congo River, a river with the greatest flow of water in the world, and through a series of canals to the Chari River which flows into Lake Chad, a lake whose surface has been dramatically reduced from 25,000 km2 in 1960 to 1,500 km2 today.
The water transfer project would help revive the lake, and with the construction of dams and power plants along the canal, would help to bring development to the region, directly affecting the Democratic Republic of Congo, Central Africa and Nigeria, through which it would pass. In addition, it would also bring economic benefits to Niger, Cameron, Chad and Congo Brazzaville as well.
The Italian engineering company, Bonifica SpA has been instrumental in working out the plans for this project and is fully committed to it. In 2017 Bonifica and Powerchina entered an agreement for the joint development of the project. China, with its own extensive south-to-north water diversion project, possesses a good deal of expertise in dealing with such a project. Such collaboration also fits in nicely with the Belt and Road Initiative (BRI), which has received strong support from the Italian government. The Transaqua project developed by Bonifica has in part been developed by PowerChina.
Representatives from both Bonifica and PowerChina were invited in 2018 as speakers at the International Conference on Lake Chad, in Abuja, sponsored by the Government of Nigeria. The final declaration of the conference stated that Lake Chad needs to be saved and that its current situation demands immediate action. The Italian government at the time pledged 1.5 million Euros (1.7 million U.S. dollars) to start the Transaqua feasibility study.
The expansion of the BRI to Africa has kindled new hope in a continent that had virtually been abandoned by the West in terms of large development projects. The Mombasa-Nairobi railway, the Nigerian coastal railway, the Chad-Sudan railway, the Port Sudan-Khartoum railway have already provided the template for industrializing the entire African continent.
While China has been ground-breaking in returning to the long-awaited – and much-delayed – project of African industrialization, the enormity of the project is of such a magnitude, that China alone cannot do it. But the BRI opens the possibility of working together with other Western nations in realizing this goal. And the cooperation with Italy on the Lake Chad project can serve as a paradigm for how the BRI must work.
While some Western nations are trying to depict the BRI as a geopolitical “ploy” by China, anyone looking at the effect of the project on the recipient countries will see the falsehood of these claims. As Abraham Lincoln famously said, “You can’t fool all the people all the time.” And to the extent that countries overcome their fears and begin to work with the BRI and contribute their strength to developing other countries, they will better understand the importance of the project and its more profound implications for global development.
China has made great gains in reversing the effects of desertification by means of their water diversion projects, their reforestation efforts and their irrigation projects. If some of this know-how were to be applied in Africa, it would help turn the devastated Sahel region into a veritable garden, which it once was. And the lessons learned can be used on a broader scale to change the nature of life on this planet – for all its people.
*Lawrence Freeman has been an advocate of the Transaqua inter-basin water transfer project for over two decades. I am the Vice Chairman of the International Scientific Advisory Committee to the Lake Chad Basin Commission
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)
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…
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.
A recent forum sponsored by Brookings Institute in Washington DC entitled: “Top priorities for Africa in 2019” produced a healthy discussion that alluded to important fundamental conceptions of economics. Although the deeper principles of what should be called economic science were not elucidated, issues raised in the dialogue serve as a useful starting point for further elaboration of that subject.
The event was organized to present FORESIGHT AFRICA, a new publication by the Africa Growth Initiative. Representative from the International Monetary Fund-(IMF), and Mo Ibrahim Foundation, joined Ambassador Linda-Thomas Greenfield, and Brahima Coulibaly, director of the African Growth Initiative, for a wide-ranging discussion on the future of Africa to a packed audience.
Members of the audience challenged the prevailing assumptions of the International Monetary Fund. One participant raised the inadequacy of the IMF’s rigid macro-analytic approach, when what is needed, she said, is a fine-tuned micro-economic intervention to deal with the scope of the challenges facing African nations. Another suggested the need for a state-funded public sector job program to put the millions of unemployed youth to work—a proposal which the IMF representative categorically rejected. The IMF’s hostility to state sector involvement belies the several hundred-year historical record of the modern economy, which is replete with successful and indispensable interventions by the state to foster economic growth.
Measuring Real Economic Growth
While the Brookings report, FORESIGHT AFRICA, provides some relevant statistics, its analysis rests on erroneous axioms of what comprises economic growth
The commonly accepted notion that African nations today are experiencing “jobless economic growth” reveals the fundamental antagonism between the analysis of the IMF and its co-thinkers, and proponents of real i.e. physical-economic growth. Jobless growth is a moronic oxymoron. Real*economic growth augments the productive power of society to increase its surplus of tangible wealth in order to sustain an expanding population at a higher standard of living. The IMF pretends to measure growth by adding up monetary values such as the price of extracted resources and real estate, stock market gains, etc. The aggregation of prices is not a measure of the economy’s growth. The only true calculation for economic growth is the result: an improvement in the living conditions of the population.
Creating Real Economic Growth
An excellent example of this defective thinking is highlighted in the article from the Brookings report entitled “How Industries without smokestacks can address Africa’s youth unemployment crisis.” Author John Page reports that Africa has not only failed to industrialize, but shockingly, its share of global manufacturing today is smaller than it was in 1980! He forecast that Africa’s working age population (15-64 years of age) will grow by 450 million between 2015 and 2035, and that “20 percent of new employment for wages will be in the service sector, and only 4 to 5 percent will be in a wage paying job in industry.” His conclusions for the future of youth employment in Africa are ill-founded and deadly when he states that since: “industry has declined as a share of output and employment…over the past four decades…Africa may not be able to rely on industry to lead structural change…”
Page then proceeds to dangerously postulate the equivalence of employment in manufacturing with tourists and service jobs. He writes: “The same forces that limit Africa’s opportunities in industry, however, are also creating a growing number of tradeable services—such as tourism and remote office services…”
“Growth in tourism is outpacing manufacturing in many African countries… It has the potential to create some of the millions of formal sector jobs Africa needs each year to employ youth entering the labor force…”
This is not an academic question for the people of Africa. We should all be level-headed about the implications of this prognostication: without industrialization Africans will die. African are dying every day due to lack of infrastructure, a diminutive manufacturing sector, and an inefficient food-producing industry. The industrialization of Africa with a massive expansion of its manufacturing base is not an option, but a life-or-death necessity!
Nor is this conjecture on my part. From the standpoint of economic science of physical economy there is no equivalence. Manufacturing, by transforming nature and producing needed goods, contributes real value to society; tourism and services do not. A variety of services are required for a functioning society, but this sector should not perform role of a primary employer for new entrants into the labor force. Tourism serves no vital task except to promote the natural beauty of a county. No new wealth is created by tourism; it is essentially collecting other people’s earned income.
Service-related jobs, whether useful or not, will never lead to real economic growth for one elementary reason. They do not contribute to the creation of new wealth. A properly organized economy would only have a relatively small percentage of its employed labor in the service sector. To do otherwise, as some African nations unfortunately are, is not sustainable, and will lead to calamity. To equate non-goods producing employment with manufacturing jobs is a grave fundamental error that should be rejected by serious economists and leaders.
Africa’s Youth Bulge Is Not A Curse
FORESIGHT AFRICA estimates that today 60% of Africa’s 1.25 billion people are under 25 years of age. That amounts to 750 million youth, a majority of which are unemployed or mis-employed in the pathological informal economy. It is projected that in sub-Saharan Africa alone, the youth population will expand by 522 million, and comprise one-third of the world’s youth by 2050. Thus, making Africa the continent with the youngest population, and potentially the largest workforce on the planet.
While these figures are striking, they do not justify enforced population reduction measures, as extremists advocate. Human life is intrinsically sacred because it is endowed with the divine spark of creativity. Contrary to popular misguided opinion, human creativity is the underlying source of all wealth; not money or even natural resources. Paleoanthropology shows us that millions of years ago before the emergence of homo sapiens-sapiens (wise-wise man), proto-humans, homo hablis, (handy man) designed tools first in the mind’s eye before shaping rocks into useful implements that were used to transform the environment for the benefit of mankind. Africa is not facing a crisis of too many people, but rather the urgency to formulate the best policies today that will incorporate millions of youth as productive members of the labor force.
What African nations most desperately need, and which will have the greatest impact of their economies, is infrastructure, infrastructure, and more infrastructure. It is not hyperbole to state that the lack of infrastructure is responsible for millions of deaths on the continent. The dearth of on-grid energy, arguably the most crucial component of an industrialized-manufacturing society, is preventing African nations from attaining the levels of economic growth required to sustain their populations.
For example. If we desire, as we should, that Africans enjoy the same relative living standard as Western nations, then each of the 2.5 billion Africans in the year 2050 should have access to at least one kilowatt (1,000 watts) of power every day. That would require, starting immediately, erecting enough power plants to generate 2,400 gigawatts of electricity. Itemize the bill of materials to build that many thermal, hydro, and nuclear power plants.
Now contemplate the number of workers that would be employed in this endeavor. Extend the same mode of thinking to constructing hundreds of thousands of kilometers of high-speed rail lines to connect the major cities, ports, and manufacturing centers across this vast continent. Add to that the number of new roads, hospitals, schools, libraries, and water ways that need to be built to provide an adequate standard of living. How many tens of millions or more youths will Africa need to employ in just the construction of primary infrastructure projects? Imagine how many additional jobs will be created in the spin-off industries.
Africa’s Future Begins Today
Trillions of dollars of long-term low interest credit must be made available to fund these projects. Only state-issued public credit will suffice for this scope of investment. The private sector, investments funds, or any other fund that is motivated by seeking high yield and quick financial returns on their investment will never, ever, underwrite the credit necessary. The overriding concern of the nation state is not making quick monetary profits, but the welfare of its citizens living and their posterity. The IMF thus far shown itself to be mentally, emotionally, and ideologically incapable of comprehending the true economic needs of Africa, or how to fund them. Those who are blinded by their erroneous view of evaluating an economy by its monetary worth, will forever be incompetent, and are not qualified to give advice, much less diktats to developing nations.
Credit issuance by the nation state is not a new or novel concept. The success of United States’ economy, which was maintained with ups and downs until its decline over the last five decades, emanated from the accomplishment of President George Washington’s Treasury Secretary, Alexander Hamilton. It was Hamilton’s understanding of credit and the central role of manufacturing that created the basis for U.S. economic growth from thirteen indebted colonies. Over the last 230 years, those leaders, in the U.S. or abroad, who were wise enough to comprehend and apply Hamilton’s understanding of national banking and credit, have been successful in stimulating economic growth for their nations.
Africa’s future does not begin in 2050; it begins now. It is incumbent on Africans, with the assistance of their friends and allies, to prioritize crucial transformative infrastructure and related projects that must be built and funded. This cannot wait. This is a war to eradicate poverty, hunger, and disease, and secure a productive life for billions of Africans living and yet to be born. Thus, this campaign should be conducted with a military-like commitment to achieve objectives and goals each month and each year. Hence, we are not waiting for the future; we are creating the future in the present.
*real and true are interchangeable terms signifying a physical (non-monetary) improvement in the economy.
Lawrence Freeman has been involved in Africa for over 25 years as a writer, analyst, and consultant. He teaches courses on African History in Maryland. In 2014 he was appointed Vice chairman of the Scientific Advisory Committee to the Lake Chad Basin Commission.
President Buhari removed Chief Justice Walter Onnoghen last week, after it was found that Onnoghen had violated the Code of Conduct, failing twice to appear before the Code of Conduct Tribunal. Buhari’s opponent in the Presidential race has accused him of not following constitutional procedures, by which he should first obtain two-thirds in the Parliament vote or a request by the Supreme Court itself. There is a provision in the Constitution under which the President can suspend or dismiss the Chief Justice. That is, in a situation where the Chief Justice is found to have contravened the Code of Conduct. In this regard, the President does not require any Senate vote or recommendation from the National Judicial Council. The Nigerian Supreme Court has jurisdiction and final say in challenges against election results.
Internationally forces based in the City of London- financial capital of the world-do not want to see President Buhari succeed in a second term as Head of State. His commitment to fight against corruption, and develop the Nigerian economy with collaboration from China threatens the internal and external enemies of Nigeria, who oppose the nation’s progress. The announcement this past week that Nigeria has become an official member of China’s Belt and Road portends success for Nigeria, as the country frees itself from domination by the International Monetary Fund.
The British government issued a statement of concern on January 26, which says “we are compelled to observe that the timing of this action, so close to national elections, gives cause for concern. It risks affecting both domestic and international perceptions on the credibility of the forthcoming elections.”
In the US establishment’s Council of Foreign Relations blog, Udo Jude Ilo from the Open Society Initiative for West Africa and Yemi Adamolekun of Enough Is Enough Nigeria (EIE) attacked President Buhari. They wrote among other things: “the timing of [Onnoghen’s] replacement is so troubling. Many analysts, including the authors of this piece, see the move by the President as a calculated attempt to gain some electoral advantage should an election petition between the President and the main opposition party end up in the Supreme Court.”
Open Society Initiative was created by billionaire George Soros, who is member of the global financial elite. Open Society is a vehicle for regime change around the world. Enough is Enough is funded by Soros’ Open Society. The authors of this blog are not just concerned Nigerian citizens, but part of a of a nasty operation to aimed at disrupting/tainting the Nigerian Presidential election and potentially destabilizing Nigeria to prevent the re-election of President Buhari.
In recent weeks media outlets in the West have been voicing allegations of violence and other actions to be instigated by the government of Nigeria in order to insure a victory for President Buhari. The British are undoubtedly the driving group behind this scenario, but we cannot rule out US involvement. President Trump to his credit has come out against regime change, however US support for the removal of the President Venezuela raises doubts about that commitment.
Not accidentally, the terrorist thugs from Boko Haram have resurfaced in force lately, scoring unexpected victories against Africa’s Nigerian led Multinational Force, and the Nigerian army, spawning a new wave of refugees in the Lake Chad region.
Those of us who have studied Nigeria’s political-economy over decades understand that the efforts directed against President Buhari are intended to derail the momentum for the industrial development of Nigeria. This includes the President’s commitment to Transaqua, a vital water-transfer project to save the shrinking Lake Chad.
The Guardian of Nigeria published on Monday, January 28, 2019, my article: “Proposal for Nigeria’s Future” with included pictures of President Trump, President Xi, and myself that were omitted from the on-line article.
The Council of African Security and Development-CASADE has published my article regarding the debate over whether China is forcing African nations into a new ‘debt trap.’ Despite the propaganda from some Africans and Westerners, China is not the new imperialist in Africa. You can read my analysis below.
CASADE: COUNCIL ON AFRICAN SECURITY AND DEVELOPMENT
The Debate On China’s Role In Africa; A Different Point Of View
Oct 20, 2018
A Brief Response: Marshall Plan for Africa or “Debt Trap?”
The world is witnessing an increase in attacks on Africa’s relationships with China in various articles, as well as low-level, unthoughtful, messages on Twitter, Facebook, and YouTube. Not only does that content intend to demonize China as the new colonial empire of Africa, but it also includes vulgar demeaning caricatures of African Heads of State.
Could the reason for the uptick of these kinds of diatribes be related to the successful September 3-4, Forum on China Africa Cooperation (FOCAC) summit in Beijing, attended by leaders from almost every African nation? China has reached out to Africa and formed a special relationship which is being embraced by African Heads of State. It should be clear to any intelligent historian, that China is not acting as an Imperialist manner towards Africa.
However, what has been conspicuously, egregiously omitted from this unsubstantiated vilification of China, is the history of Western nations and institutions, which have acted as an Imperialist power towards Africa. The latest accusation is that China is deliberately entrapping African nations into unpayable debt. However, this is precisely what the IMF, World Bank, Paris Club, along with their allies in the City of London and Wall Street did to Africa immediately following the “Winds of Change.”
The motivation for this propaganda barrage is that China via FOCAC and the Belt & Road Initiative is offering African nations a pathway toward growth uncontrolled by the financial predators in the City of London and Wall Street. Contrary to the myth that China is stealing African resources; which the Western powers did first under slavery, then under colonialism, and have continued under neo-colonialism, China is actually providing credit for physical infrastructure; the sin qua non to spur economic growth.
Debt and Credit for What?
A pervasive and quite serious problem affecting well-intentioned individuals from all corners of the globe is the lack of understanding of what actually creates economic growth. Neither money, nor financial transactions, nor derivatives, nor speculation, nor rising stock markets, nor the market place are the cause of growth or synonymous with real economic growth.
Credits issued for infrastructure; water, energy, rail, roads, healthcare, and education, identifying the most vital categories, if properly organized, leads to an increase in the productivity i.e. the economic power of the society. This is measured by the ability of society to increase its physical output from one production cycle to the next. By utilizing advanced technologies embedded in new capital equipment, including infrastructure, farmers and workers can produce more efficiently. Simply providing abundant energy, high-speed railroads, and water inputs to an African nation would lead to a jump in economic output. Shortly after the death of President Kennedy, the US ceased its commitment to assist Africa nations in expanding their infrastructure.
China is committed to lending, issuing credit-yes creating a debt to fund long-term investment in infrastructure. Credit directed in this way is good debt. With non-usurious interest rates over 15-20 years, the loan can be retired from the profit it generates to society. This form of debt is not equivalent to the hundreds of billions of dollars African nations were forced to pay to the financial capitals of the world for loans to cover rigged terms of trade, and currency devaluations.
If you study the American System of Political Economy with its cornerstone; Alexander Hamilton’s national credit policy, you will realize that China is emulating the best of America’s past. For example, President Franklin Roosevelt, who successfully applied Hamilton’s principle to rebuild the Depression riddled US with state issued credits, would have little trouble understanding the principles of President Xi Jinping’s Belt & Road.
Economics and the Common Good
There is a deeper level to comprehending economic growth. Every human being is united by a universal principle often expressed as the “common good of mankind.” Yes, all human beings regardless of religion, color, ethnicity, or place of birth, share a “common interest.” We are all created with the power of creativity. Not logic, not deduction, not induction, but the power to hypothesis new ideas. The power of discovery, to discern new principles of the universe that we previously did not know but were there waiting to be revealed to the human mind. These scientific discoveries spawn new technologies which are the primary source of economic growth. Thus, it is the responsibility, nay the obligation of every society to nurture and develop that creative potential innate in all its citizens from birth to death.
For all citizens to realize their potential, live productive lives, and raise their families without fear of hunger and security, a nation must have the economic means to expand the total physical wealth of society over succeeding generations. An advanced industrialized nation requires a healthy manufacturing sector, which is also an essential component of a productive agriculture sector. The absence of robust agro-manufacturing economies in Africa is crime along with its huge deficit in infrastructure. Sadly, the West does not have the vision to assist African nations in overcoming these deficiencies. China in all, but name has launched the equivalent of a Marshall Plan for Africa.
Among the eight major initiatives that President Xi laid out at the Africa-China Summit, China will:
1.Promote industrialization; 2. Support agricultural assistance programs; 3. Work with the African Union (Agenda 2063) to formulate a China-Africa infrastructure cooperation program; 4. Increase its imports from Africa, in particular non-resources products; 5. Train 1,000 high-caliber Africans for training in innovation sectors; provide Africa with 50,000 government scholarships; and sponsor seminar and workshop opportunities for 50,000 Africans and invite 2,000 African students to visit China for exchanges.
China has come to understand that it is the common interest of its own country, and in the fact all nations, is to help Africa develop productive industrialized societies not dependent on revenue from one resource or one crop. Under these improved conditions, hunger and poverty, the underlying causes for conflict, can be eliminated. Great progress can be accomplished in Africa and the world, if the US and Europe acquire the wisdom to join China’s Spirit of the Belt & Road
Today a huge step forward was taken for the Africa continent with the initial funding for a feasibility study of the Transaqua water project. Transaqua, a transformative inter-basin water transfer project to re-charge the shrinking Lake Chad, was first proposed over thirty years ago, to create a super-economic development zone between the nations of the Lake Chad Basin and Great Lakes Region. Expanding this lake is crucial for the Sahel and will help to turn back the desert. The success of Transaqua, a Pan African infrastructure project, will be bring peace stability to Nigeria, and to the other member states of the Lake Chad Basin, and as well create new levels of economic wealth. It will contribute to the industrialization of Africa, and should become part of the African Union’s “Agenda 2063.” I am proud that I have been advocating this project around the world, especially in Africa and in the United States.
All Africans, and friends of Africa should rejoice at this small, but potentially giant step forward for the people of Africa.
Today, October 16, 2018- A MoU (Memorandum of Understanding) for the initial funding of the feasibility study for the Transaqua project was signed in Rome by the Italian government and the Lake Chad Basin Commission. Francesco La Camera, director general of the Italian Environment ministry, and Mamman Nuhu, Executive Secretary of the Lake Chad Basin Commission, signed today a document that certifies an Italian government grant of 1.5 million Euros to finance the feasibility study for the project refill Lake Chad and build a water, transport, electricity and agro-industrial infrastructure in central Africa, developed by the Italian firm Bonifica more than 35 years ago.
The formal signature is following the decision announced last February 29 at the International Lake Chad Conference in Abuja, Nigeria. There will be further bureaucratic steps before the grant can be delivered and the feasibility study can start.
“It is a historic step”, said Bonifica CEO Romina Boldrini. “Italy is giving money for Transaqua. Everybody is expecting Bonifica to start the feasibility study now”.
Marcello Vichi, the head of the Bonifica team that drafted the original Transaqua study in the seventies, said he is “very satisfied” with the agreement. “Finally, after so many years, Africans and Europeans understood the importance of the project. Now we have to make up that lost time”.