Jeffrey Sachs and I agree 100% on the absolute necessity to provide long term-low interest financing for infrastructure in Africa. The global financial system, the International Monetary Fund, the World Bank, and the so called international rules based order, do not understand the importance of building infrastructure in Africa, or they don’t care, or they want Africa to remain underdeveloped.
I, like Professor Sachs, understand, that the only way forward for African nations is; development: massive investment in physical and human capital. Democracy and good governance are empty constructs, cynically meaningless words, without economic development. If one genuinely desires democracy, than you must have abundant electricity! Without real, physical economic growth, which is not possible without financing trillions of dollars of infrastructure, African nations will not realize their potential in this century.
This requires a new paradigm based on development, which I have been advocating for decades.
Excerpts from Prof. Sachs, speaking before the African Union, on February 17, 2023, in Addis Ababa, Ethiopia:
And that is that African governments should take on a lot more debt and use it to keep the kids in school, to build the electricity, to build the rail, to build the transport systems because it can`t wait. And if you do it right the growth will be rapid, so what looks like a lot of debt today , 25 years from now won`t be very much debt at all.
But the problem with my analysis obviously is that I believe that Africa needs financing on 30 year borrowing , not on 5 year Euro Bonds, which is nonsense! Because development is a 30 year process…
But you have lots of sources of capital and by the way, the cost of a thirty year loan , AAA is 3%. Imagine if Africa could finance its development at 3%. 30 year borrowing. Believe me , the issues would be finished! Because you would be on your way, this would be the biggest construction site in the whole world history, roads, power, housing, new factories.
Now the problem is that Africa right now borrows at 13% on 5 years. This Euro Bond stuff is useless, worse that useless! I wouldn`t take any borrowing with less than 20 year maturing, anything. Because you cannot run development on a year by year basis. And that is what Prof Oromo was just showing, all these [up and down/high and low] swings are just finance swings. Commodity prices are high, finance is easy, you borrow, commodity prices come down, finance is tough, then austerity. All that Africa is suffering is finance swings. (All emphasis original)
Read the full transcript below provided by PD Lawton, created of the blog: africanagenda.net
Read my earlier posts:
My Thoughts: Poverty & Ethnicity Kill Democracy in Africa
Alexander Hamilton’s Credit System Is Necessary for Africa’s Development
Lawrence Freeman is a Political-Economic Analyst for Africa, who has been involved in economic development policies for Africa for over 30 years. He is a teacher, writer, public speaker, and consultant on Africa. He is also the creator of the blog: lawrencefreemanafricaandtheworld.com. Mr. Freeman’s stated personal mission is; to eliminate poverty and hunger in Africa by applying the scientific economic principles of Alexander Hamilton
2 thoughts on “Jeffrey Sachs Agrees With Me: Financing Infrastructure Essential for Africa’s Development”
I do agree with what Professor Sachs said, and I am sure that almost all African leaders know that the IMF will not give them anything. Even if it did, it will be conditional. Our problem in Africa is that we are too disunited rather than being united and the sole reason for this is the inept leaders . Leadership in Africa is one of the gravest problems and it is the biggest obstacle in the face of Good Governance. Up to now, most of the political leaders have no faith (if I am using the right word) in their own people. They only believe in what is coming from the West, and that is the core of the problem. When they listen to Prof. Sachs they believe in what he is saying, but if the same thing is said by a fellow African, they will not consider it. Prof. Sachs is serious and I congratulate him for being courageous in is always saying the truth. The problem is : who is going to convince our inept leaders to disengage from the West and have the courage to decide for themselves. God bless Africa, and thanks without limits to professor Sachs.
We also have a lack of leadership in the West; the US and Europe. Sadly, there is a dearth of quality leaders, much less true statesmen, throughout the world.