Africa Needs Real Economic Growth, Not IMF Accountants

February 4, 2019

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.

Africa’s Bright Economic Future Is Its Youth

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.

Nuclear Energy is Critical to Meet Africa’s Energy Needs (ESI Africa)

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.

Guardian of Nigeria Publishes “Proposal for Nigeria’s Future” by Lawrence Freeman

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.

 

Proposal for Nigeria’s future

 

Italy and Buhari Keep Transaqua on the Agenda to Save the Shrinking Lake Chad

Jan. 18, 2019

Italian Prime Minister Conte Discusses Development with Presidents of Chad and Niger

Giuseppe Conte made a two-day visit to Niger and Chad, two countries members of the Lake Chad Basin Commission, to discuss short and long-term measures to fight terrorism, migration, and their causes on Jan. 15-16. In both countries he discussed development perspectives with national leaders.

At the joint press conference in Ndjamena with Chad President Idriss Déby, Conte referred to the Transaqua project for the revitalization of Lake Chad as an example of development programs.

European countries, Conte said, “cannot remain insensible to the drying up of Lake Chad. If it goes on, there will be increased misery and thus increased emigration and terrorist threat,” Conte remarked. “If we don’t have a vision on those issues, we will be overwhelmed. I reminded President Déby that the possibly oldest project to tackle the drying out of Lake Chad has been made by Italian experts. There is a project of dams and canals to provide irrigation.

This means laying the basis for the development of those territories and therefore better controlling migration flows.”

Both in Niger and Chad, Conte said that Italy will be “the ambassador” of the Sahel region at the EU, to promote a larger effort to finance development. The EU Trust Fund for Africa must be enlarged, Conte said.

At the joint press conference in Niamey, Niger President Mahamadou Issofou thanked Italy for the support of the Sahel-5 Multinational Force to fight terrorism, but repeatedly stressed that “the solution is developing Africa, industrializing Africa.” This goes for defeating terrorism as well as for controlling immigration flows.

Conte thanked Issofou for its support to Italy in the stabilization plan for Libya. Although this was the first visit ever of an Italian Prime Minister to Niger (and Chad as well), Conte remarked that this was his third meeting with Issofou, following meetings in Rome and Palermo, the latter at the International Libya conference. Stabilizing Libya is key to defeat terrorism, Conte remarked.

Nigerian President Buhari Reiterates His Commitment To Refilling Lake Chad

Nigerian President Muhammadu Buhari called for more commitment from the international community on redirecting water to Lake Chad on Jan. 14, warning that the 40 million people who rely on the lake in the region would pose adverse migration and security challenges to the world.

The Transaqua project to refill Lake Chad was approved at the Feb. 26-28, 2018 International Conference on Lake Chad in Abuja and soon the feasibility study financed by the Italian government should start. The cost of the entire 2400 km system of dams and canals will be in the order of several dozen billion dollars.

Receiving Letters of Credence from the High Commissioner of Canada to Nigeria Philip Baker at the Presidential Villa, President Buhari said the tragedy of the shrinking Lake Chad would continue to fuel more illegal migrations, banditry and provide willing hands for terrorism since majority of the people have lost their means of livelihood.

A statement by the special adviser to the President on media and publicity Femi Adesina said that Buhari warned that “the about 40 million population in the region will pose adverse migration and security challenges to the world” if the lake should dry up completely. The President pointed out that banditry, illegal migration and terrorism would worsen if the lake were not rescued. He said: “An academic rightly predicted that unless there was a redirection of water to Lake Chad, it would dry up. Now, whenever I go for any global meeting or visit a country, I will always draw the world’s attention to the adverse effect of climate change on the lake, and the resulting negative effects.”

 

 

China & the US Can End Poverty by Exploring Space: Africa Gains

Exploring outer space is a natural driver of economic growth. Discovering the universe beyond earth stimulates the mind, excites the imagination, and challenges our human understanding of the physical laws-principles that govern our planet. Discovering new scientific principles leads to new technologies that transform our economic mode of production. Knowledge, understood in this way, changes i.e. improves our relationship to nature-the physical universe. There is no so-called environmental limit to continued economic growth for the human noetic-creative species. The last great burst of productivity in America was a result of President John K Kennedy’s vision for man to land on the Moon. All the new discoveries that were required to accomplish that feat created new technologies here at home, on planet earth. Kennedy’s space program resulted in a 14:1 return on investment. This will happen again as mankind continues to probes further into space. China has taken the lead. However, if the US, instead of demonizing China and Russia were to collaborate with space fairing nations, in searching out new scientific principles of the universe, we would cause a revolution in science. In possession of this scientific knowledge we could end hunger, poverty, and conflict throughout the world. Africa has much to gain by supporting new endeavors into outer space.

“Get Rid of Poverty, But Also Aim Deeper into the Sky”

In the context of the press conference today by China National Space Administration (CNSA), CGTN conducted an interview with lunar mission chief designer, Wu Weiren, with its “face-to-face” reporter. The title of the interview is: “face to face Wu Weiren: a big step for mankind.” He was asked more than once about cooperation with the U.S. Wu responded that there is, in fact, some cooperation with the U.S. on this mission. The Chang’e-4 relay satellite “will extend its service life, and they can use it at that time, after the Chang’e-4 mission… The U.S. made a request to know the landing time and location in advance, so that their satellite can be adjusted to [pass over] the landing site, and record the precise location of the landing site.” This would be of benefit to China.

He continued: “This is a golden opportunity for the United States. It always wants to measure the meteorites hitting the Moon, which can raise the state of the moon dust. This is very difficult. The probability [of observing a meteorite hit] is too small; it is difficult to achieve. But this time we have such an opportunity, so Americans want to seize it, and we are willing to provide them the opportunity.” Asked numerous times about cooperation, Wu said, that “the scientists of the two countries still hope to cooperate together,” providing examples of areas of complimentary science investigations.

When asked by a reporter, “Our country has spent so much money and used so many scientists to do this. Why do we have to help people [do this]?” Wu Weiren responded: “China has fallen behind in the past few hundred years. From the perspective of modern science and technology, we still benefit from the Western countries. We have bathed in the rain of world science and technology development, and we enjoy the benefits. Now that we have the ability, our economy has developed, and our science and technology are gradually catching up with the pace of world development. As General Secretary Xi said, big countries must take on big tasks. I think we should contribute to the world’s science and technology now. We can do this in an era of contribution.”

Wu added: “A nation needs to look up at the stars, and China’s deep space exploration will fly further and further. [We have had] the successful landing of the Chang’e-4, the relay link connection, payload start-up, two-unit separation [of the rover from the lander], rover moon-day dormancy and wake-up, and two-way mutual [photograph] shootings were completed. Every move and every step attracts the attention of the world.”

“Of course, we must do our own things well,” advised. For example, the tens of millions of people in our country have not yet gotten rid of poverty. This should be solved. However, we should also aim deeper into the sky. One philosopher has said that if a nation does not look up at the starry sky and only buries its head and feet, this nation has no hope and no future.

We have 1.3 billion people and we are a big country. I hope that in our generation or the next generation, we can turn our big space power into a strong space power. Now we say that we can catch up with the world’s advanced level. Next we can lead the world. That is the dream of our generation.”

‘A Nation Needs to Look Up at the Stars’

The China National Space Administration (CNSA) held a press conference this morning on the on-going Chang’e-4 mission, and future lunar exploration missions. Giving the briefing was Wu Yunhua, deputy chief commander of the agency, and Wu Weiren, general designer of the lunar program. Wu Weiren
said that CNSA is organizing Chinese experts to work on the follow-on lunar missions, and that three future missions are being planned:
* Chang’e-5, which will launch at the end of this year, will return a sample from the near side of the Moon * Chang’e-6 will conduct a south pole sample return. Whether it will be conducted on the near side or the far side of the Moon depending on the results from the sampling mission of Chang’e-5.
* Chang’e-7 will conduct comprehensive exploration of the south pole, including its land forms, material composition, and environment
* Chang’e-8 will test key advanced technologies on the far side, and companies will be invited to industrialize the technologies. {China Science and Technology Daily} reports that Wu Yunhua added, “On Change-8 we are planning even more crucial experiments for our lunar exploration, including to determine the
possibility of establishing a lunar base for scientific research, if we can do 3D printing on the Moon, and whether it is possible to use the lunar soil for the construction of buildings, in order to jointly construct a lunar base for further exploration of the Moon.”

Previously it has been stated by CNSA that the first Chinese lunar base will be robotic, with periodic visits by astronauts. China has said that its first manned lunar mission will take place around 2030.

At the press conference, the importance of international cooperation was stressed by a number of speakers. All countries are welcome to participate in China’s follow-up lunar exploration and deep space exploration projects, he said.

Ouyang Ziyuan Gives His Views on Chang’e-4 and Future Exploration

Geologist and Academician Ouyang Ziyuan, in an undated, but recent, interview on CCTV, commented on the Chang’e-4 mission. The program was titled “Why We Want To Go to Far Side of the Moon?” Ouyang said that it had been the dream of scientists immemorial to find out about that side of the Moon that we never see. In addition, the far side, which is open to the universe — and all its effects — would no doubt contain ancient rocks that would reveal the secret of the origin of our Solar System. Scientists have chosen a level area of the Moon in the Aiken Basin and have concentrated on an ancient crater, the Von Karman Crater, Ouyang said, which could be one of the oldest parts of the Moon.

Eventually, he said, one task would be bringing ancient rocks back from the crater for examination on Earth. In addition, the Moon could serve as a base for future exploration.

“Our task in the final analysis is twofold. One is the low-frequency radiation. The other is the record contained in the ancient rocks. Our next phase on the Moon must be scientific research, and we have to plan a base for scientific research and gradually improve that base for our work. I am convinced that in
this way we will look forward to new knowledge and to new breakthroughs,” he said.

Presidents Kagame and Museveni Discuss; Democracy, China, Infrastructure, and Jobs

President Paul Kagame: Time for Europe To Invest in Industry and Infrastrucure

December  26, 2018)

In an exclusive interview with Austria’s {Die Presse} news daily, Rwandan President Paul Kagame stated that “Europe has invested billions upon billions of dollars in Africa. (But) something must have gone wrong…. Part of it is that these billions had a return ticket. They flowed to Africa and then back to Europe again. This money left nothing on the ground in Africa.” The European money was invested in the wrong place, he said.  Instead it should go to investments “in industry, infrastructure, and educational institutions for Africa’s youth, whose number is growing fast. That is the only way to create a  demographic dividend.” It would be a better way of preventing migration of young Africans to Europe, which the Europeans were so much worried about. Europe could cooperate with China, Kagame hints: “China is active in Rwanda, but not in an inappropriate way. The new roads in Rwanda are largely built with European money. Sometimes there are Chinese subcontractors.”

 What Africans do not need, is Europeans trying to give them lessons on democracy, Kagame said. The European model of democracy is a failure, Europe is in a profound political crisis, as shown by the recent mass protests and other aspects, this model cannot be one for Africans to follow. Europe finally has to give up its attitudes of fake generosity, and begin accepting Africa as a real partner, he said.

Presidents Museveni of Uganda and Kagame of Rwanda

China Creating Tens of Thousands of Jobs for Ugandans in Infrastructure Projects

Ugandan President Yoweri Museveni revealed in an interview with {Xinhua} with its focus on infrastructure development, the country wanted to attract more invest-ment from China: “We are likely to advance the project of the Standard Gauge Railway (SGR)… in the government-to-government (talks).” Extending the Chinese-built SGR line from the Kenyan seaport of Mombasa, which is expected to reach the border areas with Rwanda, South Sudan, and the Democratic Republic of Congo, to Uganda would make sense as a catalyst of economic growth. To finance its infra-structure development agenda, Uganda looked at China because of the country’s favorable lending terms compared to some of the Western global financiers.

Other major infrastructure projects in Uganda will benefit from Chinese support as well: A few months ago, the Kampala-Entebbe Expressway, linking the capital Kampala to Entebbe Airport, the country’s gateway to the world, was completed. China financed the construction of the mega road  project, the first of its kind in the country. China is also financing the expansion of Uganda’s Entebbe International Airport. Official figures show that after completion of the first phase of expansion, the cargo center can handle up to 150,000 metric tons of goods, compared to the previous 69,000 metric tons.

In the northern part of Uganda along the River Nile, the world’s longest river, China is constructing the 600MW Karuma Hydropower Plant. While touring the facility in July, President Museveni said he was amazed by the progress noting that the plant will not only address Uganda’s inadequate power supply, but also that youths have become skilled through the construction process.

Farther upstream on the River Nile, in the central Ugandan district of Kayunga, construction of a Chinese-funded 183MW Isimba Hydro-power plant that is nearing completion according to the Chinese engineers on site, power generated by the plant is expected to come onto the national grid early next year.

The power development plan is crucial for the Uganda’s industrialization policy, which has designated over 22 industrial parks across the country where investors can set up base, taking advantage of the incentives that come with establishing their factories in the parks. In October, President Museveni launched the first phase of a $620 million Chinese industrial project in the eastern district of Tororo. The project has dubbed the Uganda-China Free Zone of International Industrial Cooperation, undertaken by the Dongsong Energy Group, will manufacture glass, steel, and organic-fertilizers, creating about 3,000 jobs at peak when completed in 2020.

President Museveni, in March of this year launched another Chinese-owned Mbale Industrial Park. The park owners, Tian Tang Group, said it will attract more than 30 investors with a total investment of about $600 million and an annual output value of $1.5 billion. The park will directly employ about 12,000 locals.

 The $220 million Kehong China-Uganda Agricultural Industrial Park, is another park that will play a critical role in transforming the economy. According to government figures, almost 80% of the country’s population derives its livelihood from agriculture.

 When fully operational, Kehong China-Uganda Agricultural Industrial Park is expected to produce about 600,000 tons of agro-products annually to meet the domestic and regional market demands.

 It will also create 25,000 jobs as well as making opportunities for training local people available, according to the managers of the park.

Africa’s East-West Railroad is 50 years Over Due

An East-West railroad, along with Trans-African highways, and  electrical power, is essential for African nations to become  sovereign independent nations. It is coherent with the African Union’s “Agenda 2063.” Sudan is geographically situated to become the nexus of the East-West and North South rail lines. Africa’s collaboration in recent years with China’s Belt and Road Initiative, Russia, and other nations to build vitally necessary infrastructure is the only way to eliminate poverty, hunger, and disease. It will also lead to finally putting African nations on the path to building robust agricultural and manufacturing sectors. This policy stands in stark contrast to President Trump’s “non-Africa Strategy,” which will do nothing to help Africa, nor improve US Security.  

Russia Wants To Help Build an African Cross-Continental Rail Line

Dec. 16, 2018

The Russia-Sudan Inter-governmental Commission announced in a report that Russia wants to participate in the construction of a cross-continental rail line, which will connect East and West Africa. TASS reported that the commission document states: “The Sudanese side expressed interest in participation of the Russian companies in constructing of the Trans-African railway from Dakar-Port Sudan-Cape Town. The Russian side confirmed readiness to work out the opportunity for participation but asked for [the] provision of all the financial and legal characteristics of this project.”

TASS explained that “the Trans-African railway line is part of the African Union’s plans to connect the port of Dakar in West Africa to the port of Djibouti in East Africa. It will run through 10 different countries (many of them landlocked) and is expected to boost trade on the continent. The route will be the expansion of the existing Trans-African Highway 5 (TAH5). The first phase of the project will be an estimated $2.2 billion upgrade to 1,228 kilometers of existing rail between Dakar, the capital of Senegal, and Bamako, the capital of neighboring Mali.

The project has already attracted Chinese investment in African infrastructure through Beijing’s ambitious Belt and Road Initiative (BRI).” 

 
 
 

 

Nigeria’s Buhari Renews Commitment for Lake Chad Water Transfer Solution

Dec. 1, 2018 — Speaking at a meeting of the heads of state and government of the Lake Chad Basin Commission-(LCBC) in N’djamena, Chad, Nigerian President Buhari renewed his commitment to pursue the project for “inter-basin water transfer,” i.e. Transaqua, to defeat poverty and eliminate the roots of terrorism in the Sahel.

According to the {Vanguard}, he “charged the Presidents and Heads of Governments in attendance to make concerted efforts to ensure the actualization of efforts to recharge the Lake [Chad], President Buhari stressed that if meticulously pursued, the project ‘has the capacity to unlock the economic potentials and provide solutions to the myriad of interrelated challenges confronting the region.’ As Chairman of the Summit of Heads of State and Governments of the LCBC, President Buhari assured of his commitment to providing the required leadership and direction for the actualization of peace and security in the area,” the daily wrote.

The gathered leaders, President Idris Deby Itno of Chad, President Mahamadou Issoufou of Niger Republic, and Prime Minister of Cameroon Philemon Yang, who represented President Paul Biya, issued a joint statement in which they “resolved to change {modus operandi}, collaborate more, and renew assault on all forms of terrorism and criminal acts, till wholesome peace was restored to the region,” the {Vanguard} reports.

At the International Conference on Lake Chad held in Abuja, Nigeria in February, the LCBC leaders committed to explore Transaqua as the only viable solution to the Lake Chad crisis. Transaqua is an Italian idea for a 2,400 km waterway to transfer 100 billion cubic meters water per year from the Congo Basin and produce electricity for agro-industrial development. So far, however, only the Italian government has pledged the initial funds for the feasibility study. A protocol was signed last October in Rome and hopefully the joint LCBC-Italy committee can  release the funds at their first meeting next January, for the feasibility study to begin.

Read more below

Insurgency : Buhari calls for bilateral, multinational platforms at Lake Chad

Don’t Listen to Propaganda & Gossip. Follow the Facts: China is not Creating a ‘debt-trap’ for Africa

A useful report, “Africa’s growing debt crisis: Who is the debt owed to?” by the British based Jubilee Debt Campaign, again belies the propaganda and gossip that China is manipulating African nations into a ‘debt-trap.’  This report excerpted below, using figures from the World Bank, and the China Africa Research Institute-(CARI) at Johns Hopkins SAIS in Washington DC, shows the percentage of debt owed to China by African nations is not the cause of a debt crisis. In fact, in many cases the debt owed to China is less than the total owed to Western nations and financial institutions.

It is clear that for strictly geo-political reasons many Western think tanks and various media have gone into overdrive demonizing China with false claims of a new ‘debt-trap.’ This has also led to increased attacks on African leaders, portraying them as weak and not acting in the interest of their citizens. They have been accused of succumbing to China, which has been dubbed, the new imperial power. Sadly, many Africans have been duped, or simply out of frustration and anger, joined this western orchestrated chorus.

Of course, the truth of the matter is quite different. From the early 1980s on Western financial intuitions such as the IMF, World Bank, and Paris Club, loaded up African nations with so much debt that they were unable to service the debt, forcing them into unpayable arrears.  The vicious irony, is that several hundred billion dollars of debt lent by the West was never meant to actual develop African economies. It was in fact, intended to create a real ‘debt-trap’ for Africa. It has only been in the last ten years that Africa’s huge deficit in infrastructure is being addressed in collaboration with China’s non-western model of development. As I have written over many years, debt is not the problem when it is used as credit to improve the productive powers of a society to increase its physical wealth. Technologically advanced infrastructure is an excellent, if not the premiere method to drive an economy forward. This is exactly what China is accomplishing through its Belt and Road Initiative, and is at the heart of the Forum on China-Africa Cooperation-(FOCAC).

Unfortunately, the dominance of the “geo-political” ideology since the death of Franklin Roosevelt has thoroughly contaminated the thinking of Westerners and Africans alike. Creating a culture (with few exceptions) of people unable to think strategically, and who cynically reject the idea that a powerful nation would extend itself to actually assist other nations. China, according to all accounts, has lifted 700 million of its people out of poverty. President Xi Xinping has pledged to help eliminate poverty in Africa, the continent with highest rate of poverty in the world. Yet, many Africans reject this offer as insincere, suggesting a sinister motive lurking behind China’s offer. This attitude, is in part, the result of today’s political culture, which has failed to understand one of the most profound universal principles: all mankind shares a common interest in the development of the creative potential of each and every human being.  

Let us all agree, now, that we will all act on the this principle of the common good, and affirm as did the Treaty of Westphalia, that the interest of the other is also the interest of thy self.

 

Forum On China-Africa Cooperation, Beijing, September 3-4, 2018

“Africa’s growing debt crisis: Who is the debt owed to?”

October 2018

(excerpts follow)

Summary
• African government external debt payments have doubled in two years, from an average of
5.9% of government revenue in 2015 to 11.8% in 2017
• 20% of African government external debt is owed to China
• 17% of African government external interest payments are made to China
• In contrast, 32% of African government external debt is owed to private lenders, and 35% to
multilateral institutions such as the World Bank
• 55% of external interest payments are to private creditors

Minimum amount of African government external debt owed to China as percentage of total debt is 18%

Creditor grouping, total debt owed, percentage of external debt owed, are as follows:
China $72 billion 18%
Paris Club $40 billion 10%
Other governments $18 billion 4%
World Bank $66 billion 16%
IMF $18 billion 4%
Other multilateral institutions $61 billion 15%
Private sector $132 billion 32%
Total $407 billion 

Maximum amount of African government external debt owed to China as percentage of total debt is 24%

Creditor grouping’Total debt owed, percentage of external debt owed, are as follows:
China $100 billion 24%
Paris Club $40 billion 10%
World Bank $66 billion 16%
IMF $18 billion 4%
Other multilateral institutions $61 billion 15%
Private sector (excl. Chinese
private sector)
$132 billion 32%
Total $417 billion

Checking these figures through country cases

Another way of identifying how much African government debt is owed to China is to look bottom-up at the individual data available by each government.

Of these 16 countries, 14 have figures on how much debt is owed to China (for the full analysis see Appendix 1.). Of these 14:

• 11 owe less than 18% of their debt to China (Burundi, Cabo Verde, Central African Republic, Chad, Gambia, Ghana, Mauritania, Mozambique, Sao Tome and Principe, South Sudan, Sudan and Zimbabwe).
• Three owe more than 24% -Djibouti (68%), Zambia (30%) and Cameroon (29%).
• The mean average amount owed to China is 15% of a government’s external debt, and the median average is 8%

Read Complete Report: Who Is Africa Debt’s Owed To?

Nigeria and Sub-Saharan Africa Should NOT Have the Majority of Poor People.

This  is absolutely unacceptable. There is no objective reason for Nigeria and Sub-Saharan Africa to have the highest percentage of poor people in the world, with all its natural resources and people. This is the result of failed policies that began with the so called “Washington Consensus” beginning in the 1980s. Under the International Monetary Fund’s diktats and Structural Adjustment Programs(SAPs), the economies of African nations were destroyed and many have still not recovered.  African nations are beginning to follow a different model in collaboration with China’s Belt and Road Initiative. The IMF and World Bank models which measure statistical monetary aggregates ignore the most essential ingredient necessary to create economic growth: technologically advanced infrastructure platforms, integrating rail, energy, water, and roads. Only in the last ten years is infrastructure finally being built, after it was outlawed under colonialism and neo-colonialism, (except for roads and rail for resource to port and transporting colonial soldiers).  For example, the Sudanese people are suffering terribly from a lack of economic growth, because Sudan has been threatened not to deviate from IMF dictated macro-economic parameters. The Sudanese people will rebel, if Sudan continues to adhere to the murderous policies of the so called “free market.”

It is time for African nations to over throw the old model and break free from the monetarist grip of the IMF and WB. Inclusive growth, as it is called, will only happen when there is improvement in the real-physical economy. 

It is projected that by 2050 Nigeria will have 400 million people and Africa as a whole 2.4 billion. Despite the hysteria of the “zero-growthers,” Nigeria and Africa are not suffering from over population, but underdevelopment of its vast wealth. Each new human born can be a new source of wealth, if their creative potential is nurtured and developed. Thus, the Africa continent  with its projected large population, should become the center development (not poverty) of world economy, if we act now to massively expand infrastructure across the continent.

Nigeria to host 90% of extremely poor by 2030, says World Bank

Europe Must Address Poverty in Africa to Deal With Migration Crisis


Illustration: Luo Xuan/GT

The just-concluded EU Summit on migration has come up with measures like securing centers for migrants to process asylum claims, strengthening external border controls, and boosting financing for Turkey and countries in North Africa. But these are old solutions to old problems.

Since 2015, the EU has been working at full capacity to overcome the migration crisis. EU member states received over 1.2 million first-time asylum applications in 2015, more than double that of the previous year. But it seems that the European continent is still working in the same old way to try to prevent the entry of immigrants and not to address the causes of migration. Even if we assume these measures bring success in reducing immigration for some time, the EU will later be surprised when migrants use other means and methods to migrate, because the causes of migration still exist.

The root of migration is poverty. The African continent has suffered occupation and war for many decades. Many African countries have not yet been able to achieve the path of reform and development. This has put the people of these countries under unbearable pressure from poverty, ignorance and disease. They have pushed themselves into the abyss and tried to cross the border to reach Europe. They have faced danger and horror, believing a chance at a better future is worth dying for, if necessary.

With the emergence of the new system of globalization, the world became a small village and Africans opened their eyes to the luxury and good life enjoyed by Europeans, which inspired them to move to these countries. The majority of people from African countries continue to blame European countries for their backwardness and believe they should shoulder their responsibilities toward Africa. As a result of the failure of European countries to play the role that the African people were waiting for, these masses migrated to Europe to try to gain these rights. Europe, when dealing with refugees, looks at them from a perspective of human logic or empathy and does not view migration as a symptom of a disease. European countries must change their thinking and strategy to deal with the disease in order to make the causes of migration disappear.

It is time for Europe to look at the Chinese experience in Africa. The Chinese policy has  always focused on development. Economic relations between Africa and China have grown enormously, especially since 2006. The African continent is playing an important role in the Belt and Road initiative. China provides infrastructure funding and a workforce, and this infrastructure allows Africa to increase its production and exports, improving the quality of life and improving the conditions of millions of Africans.

Hope is the solution. The people of the African continent need hope. At least this last summit has come out with some words about more investment in Africa to help the continent achieve a substantial socio-economic transformation. China has been focusing on African development for a long time and has seen the results. The EU should work closely with China to push for the B&R to fight poverty in Africa and promote development. (emphasis added)

He Wenping is a senior research fellow at the Charhar Institute in China, and Hisham Abu Bakr Metwally is the first economist researcher at the Central Department for Export & Import Policy under the Egyptian Ministry of Foreign Trade and Industry. bizopinion@globaltimes.com.cn