How the Imperialist CFA franc Suppresses Growth in Africa

Africa’s ‘colonial’ CFA currency (courtesy dw.com)

The article in the link below is a detailed and useful expose of how the CFA franc, controlled by France, contributes to the suppression of economic development in Africa. We have now past a half century since many nations in Africa liberated themselves from colonialism. Yet the French banking system still exercises colonial domination over the finances of African nations that should be economically independent. African nations will never be truly independent until they are economically sovereign. This means having sovereign control over their own currencies and the issuing of credit for internal improvements of their economies. African nations should have National Banks and Development Banks for the issuing of credit, as first conceptualized by Alexander Hamilton. Hamilton’s concept of government-national credit was essential for the creation of an industrialized USA from thirteen agrarian based colonies.

Read: Towards a Political Economy of Monetary Dependency

For more analysis of Alexander Hamilton’s credit policy read: Nations Must Study Alexander Hamilton’s Principles of Political Economy

Africa Update: African Union Discusses DRC’s Grand Inga. African Bankers Reject ‘Noise’ On Chinese Debt

August 3, 2019

African Union Meeting Revives Grand Inga Dam Project in Congo

The six-phase Grand Inga Dam Project in the Democratic Republic of the Congo (D.R.C.) has shown signs of coming back to life when the project was discussed at the African Union Extraordinary Summit meeting held Niamey, Niger July 4-7,

{Construction Review Online} reported July 31. On Congo River, two other dams, Inga-I and Inga-II had long been completed, generating about 1800 MW peak power. Inga-III, whose construction had fallen through for a number of reasons, is projected to create nearly 5,000 MW of power. Grand Inga is a considerably ambitious project. With 52 turbines, it would dam the entire river and flood 22,000 hectares of the Bundi valley, which is home to as many as 30,000 people. Five additional hydropower stations would considerably increase the generating potential of the falls. Once these additional hydropower stations were brought online at the dam site, the  whole project would dwarf any other hydropower facility worldwide. The Inga project is estimated to produce 40,000 MW. This is enough to provide power to nearly half of the continent, reported {Construction Review Online}.

D.R. Congo, in Central Africa, where the total electrical power installation is close to 15,000 MW.  Central Africa constitutes of ten countries: Angola, Burundi, Cameroon, Central African Republic, Chad, Republic of the Congo (Congo Brazzaville), D.R. Congo, Equatorial Guinea, Gabon, and Rwanda. Most of Central Africa’s power is generated from hydro.

African Bankers Reject “Noise” on Chinese Debt–We Have To Borrow for Development!

John Rawangombwa, chairman of the African Association of Central Banks, whose annual meeting in Kigali, Rwanda ended Aug. 1, told Xinhua that “the noise around the Chinese debt to African countries”–this was the subject of a presentation at the gathering–was “unfounded.” Chinese debt, as a percentage of total African debt, is not a problem, he said.

Rawangombwa pointed out that borrowing is good, and borrowing outside the country is acceptable, although internal borrowing would be preferable to reduce foreign exchange risk.

The reality, however, he stated, is that Africa faces a financing gap; so, nations must improve their debt management capacity, and borrow for the right purposes, an build up their capital markets.

He emphasized that countries must ensure that they invest in the right projects, that generate foreign exchange in order to be able to repay their debt. He also said that the fact that Africa’s debt has increased is not unique to Africa. Rather, it is a global phenomenon, that requires global management, Xinhua reported

Trump’s Policy for Africa Exists Only to Stop China

July 20, 2019

The analysis in the article below published by WPR is useful. However, I can be more blunt: President Trump’s policy for Africa has nothing to do with helping Africa, but it only to counter China’s influence! President Obama did very little for Africa, but make speeches about so called good governance and promoted his fraudulent “power-less Africa” program. Sadly, President Trump is following in Obama’s footsteps, premising his strategy for Africa on the old British geo-political doctrine of winners and losers in a zero-sum game. Read my article:  President Trump’s Fundamentally Flawed Africa Policy  Stopping China is not a policy to help Africa, a continent still suffering today from enormous infrastructure deficits, a legacy of 500 years of slavery, colonialism, and neo-colonialism. Despite all the propaganda against China, China’s Belt and Road infrastructure initiative has done more to assist African nations in developing their economies in recent decades, that all the combined initiatives of Europe and the United States. President Trump’s “Prosper Africa” will not advance Africa’s interests. The best way to actually promote development in Africa, build robust manufacturing sectors, and industrialize the underdeveloped continent, would be for President Trump to join China in building infrastructure across the continent in the spirit of the Belt and Road Imitative. 

World Politics Review

Donald Trump’s daughter and adviser, Ivanka Trump, and Kwesi Quartey, Deputy Chairperson of the African Commission.
Ivanka Trump, and H,E, Kwesi Quartey, Deputy Chairperson, African Union

Trump’s ‘Prosper Africa’ Strategy Is Fixated on a Cold War-Like View of China

Kimberly Ann ElliottTuesday, July 16, 2019

During the Cold War, American policymakers frequently pushed nonaligned countries to take sides. The Central Intelligence Agency fomented coups against governments that flirted with communism and the Soviet Union, or that just drifted too far to the left for comfort. The State Department threatened to cut aid flows to countries that voted too often against U.S. priorities at the United Nations. Could sub-Saharan Africa find itself caught in the middle again if a cold war with China breaks out?

In a speech at the Heritage Foundation last December, President Donald Trump’s hawkish national security adviser, John Bolton, launched a new initiative called “Prosper Africa” that he said was aimed at promoting trade and commercial ties “to the benefit of both the United States and Africa.” But there are a number of reasons for African governments to be concerned about what the administration really has in mind.

First of all, Bolton cast the goal of increased economic engagement as something necessary for “safeguarding the economic independence of African states and protecting U.S. national security interests,” not as something helpful for African economic development. He pointed to the growing influence of “great power competitors,” China and Russia, which he suggested were investing in Africa mainly “to gain a competitive advantage over the United States.” While there are certainly valid concerns about some of China’s foreign aid and lending practices in Africa and other developing countries, African governments have generally welcomed Chinese aid and investment. It’s not at all clear they would agree that this is a competition where they must choose one side or the other.

A second reason to be skeptical of how seriously this administration takes the goal of helping Africa develop is the low level of U.S. engagement to date. President Donald Trump has not visited the continent; his wife and daughter have in trips heavy on photo ops but light on policy substance. Secretary of Commerce Wilbur Ross—hardly the most dynamic member of the Cabinet—was supposed to represent the administration last month at the U.S.-Africa Business Summit in Maputo, the capital of Mozambique, where details of the Prosper Africa initiative were announced. But he cancelled at the last minute because of a “scheduling conflict,” according to his office, sending Deputy Secretary of Commerce Karen Dunn Kelley instead.

By contrast, Chinese President Xi Jinping has visited Africa multiple times and has welcomed a stream of African officials to Beijing. Russian President Vladimir Putin will host 50 African leaders at a summit in Sochi later this year. Gyude Moore, a former minister of public works in Liberia (he’s now my colleague at the Center for Global Development), called the lack of Cabinet-level U.S. participation at the Maputo meeting insulting.

There are a number of reasons for African governments to be concerned about what the Trump administration really has in mind.

Finally, another reason to question the White House’s intentions with respect to trade with Africa is Trump’s view that trade policy is a zero-sum game: If another country wins, the United States must lose, and vice versa. Indeed, before getting to the mutual benefit part of his speech last December, Bolton asserted that the administration’s new Africa strategy would remain true to Trump’s “central campaign promise to put the interests of the American people first, both at home and abroad.”

So it should be no surprise that when he discussed trade, Bolton emphasized American jobs and exports to Africa. He said that the administration wants to pursue “modern, comprehensive trade agreements… that ensure fair and reciprocal exchange.” In recent congressional testimony, U.S. Trade Representative Robert Lighthizer also reiterated the administration’s goal of negotiating a bilateral trade agreement with an African country that could become a model for others. Negotiators for a little country, negotiating with a big country like the United States, might wonder just what reciprocity means in that context.

If more than two decades of history is any guide, negotiating a trade deal with the United States will mean more or less accepting whatever text American negotiators put in front of their counterparts, including onerous demands for strict intellectual property protections that could increase prices for drugs and agricultural inputs. Negotiating with one country at a time is also problematic because most African countries are party to one or more regional communities, which they are stitching together in a single, continent-wide free trade agreement that just formally entered into force. The continent—home to a large number of small economies, many of them landlocked—desperately needs more regional integration to increase its competitiveness by lowering transportation and other costs of trade and achieving economies of scale.

Beyond these problematic trade plans, what else is in the administration’s Prosper Africa initiative? Its second stated aim is to engage the private sector and double U.S. trade with and investment in Africa. According to Kelley’s remarks in Maputo, two of the three strands of the program are aimed at helping American companies find and close deals across Africa by streamlining and better coordinating U.S. government activities that provide information, financing and risk insurance to the private sector. She also suggested that these efforts on behalf of American businesses could include “U.S. government advocacy” to “expedite” transactions, which sounds like it might involve a little arm-twisting if African officials question the terms of a deal.

Helping African countries improve the investment climate, which is Prosper Africa’s third strand, and connecting American investors to opportunities on the continent, are worthy—and indeed longstanding—goals. Overall, however, the initiative appears to be a mix of existing programs in shiny new packaging, and with little new money. The $50 million proposed budget for Prosper Africa is a drop in the bucket compared to the administration’s proposed 9 percent cut in overall aid to Africa. And efforts to negotiate bilateral trade agreements country by country would undermine the regional integration that is needed for the continent’s development.

Trade and aid to support development in Africa can and should be to the mutual interest of all involved. But putting Prosper Africa in the context of the geopolitical rivalry with China, alongside Trump’s belligerent America First rhetoric, undermines that positive message.

Kimberly Ann Elliott is a visiting scholar at the George Washington University Institute for International Economic Policy, and a visiting fellow with the Center for Global Development. Her WPR column appears every Tuesday

 

China-Africa Debt Trap Refuted Again. Belt and Road Building Infrastructure-Developing Africa

July 12, 2019

President Xi and African Heads of State (courtesy of Al Jazeera)

This excellent article, once again refutes the slander that China is imposing a ‘debt-trap’ on African nations. The author, Ehizuelen Michael Mitchell Omoruyi, executive director of the Center for Nigerian Studies at the Institute of African Studies, Zhejiang Normal University, shows how China through the Belt and Road is developing vital infrastructure for Africa. 

“Millions of articles have been written on China-Africa engagement that involve the terms “Sino-optimism,” “Sino-pragmatism” and “Sino-pessimism.” With that said, somehow, China has also been mentioned in some Western media in a negative light, including headlines with phrases such as “Can China circumvent the middle-income trap?” “China’s trapped transition,” “The Thucydides Trap” and the “debt trap.”

“As for the debt trap, the term refers to the idea that Chinese loans in the continent of Africa are a strategy by the Middle Kingdom to extract concessions and purchase allegiance. I do not concur! China’s involvement with African nations is far beyond building railways, bridges and roads…

Continue reading: Belt and Road Offers Development not Debt Trap

China Announces $1 Billion Belt and Road Africa Fund Led by South African

Announced July 3 on the sidelines of the Summer Davos Meeting World Economic Forum in Dalian, China, this $1 billion investment fund also achieves another first–in that it will be not be run by the state government–thus being China’s first “NGO.” It will also notably be led, not by a Chinese, but by a South African.

Intended to be up and running by September, this fund–to be capitalized by wealthy Chinese businessmen and their families–will be headed by Dr. Iqbal Survé, “born and educated in Cape Town” (according to his website). Survé had started his own, Sekunjalo investment fund in 1997, leaving his medical career at the call of Nelson Mandela, who was seeking local investors to lead the development of the economy. Dr. Survé had become “affectionately known as the ‘Struggle Doctor’ because of his provision of medical care towards victims of apartheid brutality,” says his “about” page.

Since then Survé came to serve as chair of the BRICS Business Council for South Africa, and most recently as a member of the Business Council Chairman for the five BRICS countries. A hedge fund operator he definitely is not. Commenting from China, Dr. Survé said, “The discussions that we’ve had with Chinese business people, state-owned enterprises and family offices, have resulted in the establishment of this fund. Africa is ready to grow and is heading towards a $5 trillion economy. The [Africans] have seen how China was able to grow from 1980, when China made up only 2% of the global GDP when compared to today, where China makes up 19% of the global GDP.

This fund is a great boost for the development of Africa.” The fund will be overseen by a Belt and Road Business Council, eventually to grow to 1,000 Chinese and African members.

Western Regime Change Against Libya: Massive Suffering Today

PRESS TV interview with Lawrence Freeman

The 2011 Libya regime change against President Gaddafi has created a failed state in Libya today that has lead to the deaths and slavery of thousands of Africans. President Obama, Hillary Clinton, Susan Rice and Samantha Powers zealously advocated the overthrow of President Gadadfi that created today’s nightmare for Northern Africa. What is needed to reverse this bloody disaster is a whole new approach to Northern Africa, one based on economic development, which must include refurbishing Lake Chad with the Transaqua water project.

 

 

 

 

Africa Enters New Era of Trade and Development with AfCFTA

July 9, 2019

(Courtesy Africa Feeds)
12th Extra-Ordinary African Union Summit in Niamey, Niger, July 7, 2019. (Courtesy Africa Feeds)

China Global Television Network, or CGTN  published my article on the African Union’s creation of the Africa Continental Freed Trade Area-AfCFTA

Read below.

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.

 Continue ReadingAfrica Enters New Era of Trade and Development-with-AfCFTA

For more on the AfCFTA watch this video interview with Amb. Chihombori-Quao: 

AU Amb Chihombori-Quao: “The African Sleeping Giant is Rising”-The Significance of the Africa Continental Free Trade Area

China Helps Ghana Industrialize. First Ever Russia-Africa Summit

June 23, 2019

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. 

Ghanaweb.com

Help Ghana industrialize – Business Development Minister tells China

 

Ibrahim Mohammed Awal 750x406
Ghana’s Minister for Business Development, Dr Ibrahim Mohammed Awal

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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.

China’s Belt-Road Initiative Advancing Growth in Africa and Germany. Will the US join?

June 20, 2019

Everyday, nations around the world are experiencing economic growth by participating in China’s Belt and Road Initiative-BRI. For a truly global transformation, the United States must join this new paradigm of development. The most productive way to enhance relations with China, is for President Trump, at next week’s G-20 meeting, to discuss with President Xi Jinping, the US joining the BRI. This would create an unprecedented level of economic growth throughout the world. It would also be a brilliant flank against those voices in the US, and internationally, who are demonizing China, and trying two divide our two great nations. 

{Independent}: Belt and Road Contributing to Prosperity in Africa

A feature today in the South African {Independent Online Business Report} publication reviews the benefits of the Belt and Road Initiative for Africa, saying that Liberia, Morocco, and Tunisia have benefited from African development projects, as has Ethiopia from the Addis Ababa Light Rail, which cut travel time to and from the city. Through the BRI, China has also built a light-rail system in Abuja, Nigeria, the first to be built in Western Africa. Chinese construction companies have further assisted Angola in rebuilding its Benguela Railway, which had been destroyed in the civil war. The country can now transport goods from Angola’s western coastline to the border of the Democratic Republic of Congo.

Chinese-funded projects have also led to the construction of the Isimba and Karuma hydroelectric power stations, two new sources of electricity to Uganda, which will ultimately aid development. In Rwanda, road construction projects have brought young citizens into construction through their employment. This ultimately improved their welfare and provided labor skills. In the spirit of BRI’s trade ambitions, Egypt now looks to make the idea of the Cape-to-Cairo road a reality. Since taking the reins as 2019-2020 chairperson of the African Union, Abdel Fattah el-Sisi of Egypt plans to construct a superhighway through multiple African nations, eventually ending in Cape Town, to open
countries to trading in the Cape’s ports and in Cairo, Egypt’s gateway to the European Union.

German Mittelstand Supports New Silk Road

China’s proposed Belt and Road Initiative (BRI) has been creating opportunities for German enterprises, said Hans von Helldorff, chairman of the board of the Federal Association of German Silk Road Initiative (BVDSI), in an interview with Xinhua on June 17.

“The future markets and the new markets, for example, are in Asia, Africa, as well as Eastern and Southern Europe. They are not so well-connected. China has been providing the connections, thus it will generate great opportunities,” said von Helldorff, stating that new markets are needed by Germany’s Mittelstand firms.

Von Helldorff said that, thanks to the inter-connectivity, businesses have already been on the rise in some German cities, such as Hamburg and Duisburg. Many small and medium-sized companies in Germany got contracts with seaborne and logistics enterprises from China and other countries for local registration, legal, accounting, and tax services, von Helldorff stated.

“The infrastructure projects along the Belt and Road countries also need a lot of know-how. Harbor-related, road-related, train-related, etc. We have to open our eyes and participate in them,” von Helldorff said, declaring that the strengths of German businesses can contribute as an “innovation and investment engine.”

Speaking about prevailing doubts and worries about the BRI, allegations that the initiative might be politically motivated and harm local industries, von Helldorff said that some of them are simply clichés and that some are unfounded.

“The BVDSI sees China as a fast-growing economy that follows a plan. We need to sit and make eye-to-eye contacts and negotiations. Only cooperation in the sense of fair competition is for the benefit of humanity,” von Helldorff said. The BVDSI, founded in March 2019, is a business association serving as a platform for the interests of small- and medium-sized German companies. The BVDSI plans to organize a
forum later this year in Germany on the BRI for partners to establish project-related contacts.

 

AU Amb Chihombori-Quao: “The African Sleeping Giant is Rising”-The Significance of the Africa Continental Free Trade Area

On June 2, 2019, I interviewed African Union Ambassador to the United States, Arikana Chihombori-Quao at her home, on the significance of the new agreement on an Africa Continental Free Trade Area-AfCFTA, initiated on May 30. The AfCFTA is intended to reduce tariffs and barriers between African nations to promote trade, and spur economic development throughout the continent.

 

In the interview above, Ambassador Arikana Chihombori-Quao, provides a provocative and optimistic analysis of what the newly enacted agreement for an Africa Continental Free Trade Area-AfCFTA will mean for continent over the coming years and decades.

Amb Chihombori emphasizes huge potential for the AfCFTA to double, triple and even quadruple intra-African trade, which today is a mere 16%-18% of total continental trade. According to the UN Commission on Africa, AfCFTA could increase intra-trade by 15% to 25%, that equals $50-$70 billion in the next 20 years.  The concept of AfCFTA is to enable each African with the opportunity to potentially access the continent’s multi-trillion dollar market and 1.2 billion buyers and sellers. Landry Signe of the US based Brookings Institute estimates that by 2030 AfCFTA could boost consumer and business spending to $6.7 trillion.

Historically, Amb Chihombori views the AfCFTA as a continuation of the struggle by African nations to liberate themselves from intended under-development imposed on Africa by the infamous Berlin Conference (1884-1885). She stresses that 56 years (and five days) after the founding of the Organization of Africa Unity-OAU (May 25, 1963), Africa will now be functioning as one trading bloc of nations, which is intended to equalize the international playing field. As the implementation of AfCFTA proceeds, Amb Chihombori believes that Africa will acquire the stature of a “heavy-weight” in global trade and commerce. She is also hoping that by the end of this year Africa will ratify the “Free Movement Protocol” that would allow Africans to live, travel, and work anywhere on the continent, thus complementing the AfCFTA

Amb Chihombori accentuates in this interview, that infrastructure is a level one priority for Africa in the AfCFTA. “Investment in infrastructure is an absolutely essential step for us to take as we move into the implementation of AfCFTA,” she says. The denial of basic infrastructure, power, access to water, education and healthcare, by the colonial powers following the Berlin Conference, kept African nations from  developing; by design. “Leaders in Africa are now discussing the building highways and high-speed rail from Cape Town to Cairo and Djibouti to Dakar.”

Challenging those who advocate reducing Africa’s population and falsely claiming that Africa’s growing population is a major contributor to Africa’s economic problems, Amb Chihombori asserts that: “Our youth is the biggest advantage we have over the rest of the world…Youth is our biggest asset.”

Amb Chihombori wants to make the US the number one trading partner with Africa, telling Americans; “that the African sleeping giant is rising-it is a new game.”

***The AfCFTA had already come under attack, even before its birth, by the International Monetary Fund-IMF. According to the People’s News Africa, the IMF warned African nations they could lose revenue, if the AfCFTA is enacted.

Rwanda’s President Paul Kagame quickly responded: “It is important that Africa gives the necessary considerations to the views and opinions by external entities and ‘development partners,’ it is more important at the same time that Africa becomes aware of what we want for ourselves, pursue what is good for the continent, and defend what is necessary for our collective development.”

Celebrate Africa’s New Free Trade Agreement: Terminate CFA franc

With the initiation of the Africa Continental Free Trade Agreement on May 30, 2019, now is the time for African nations to finally jettison the CFA frank, a relic of French Colonialism. No longer should 14 African nations have their sovereignty infringed upon by a former European colonial country. Economic sovereignty is inviolate. For a nation to develop its full economic potential it must control its currency, which is a from of national credit. One of the great accomplishments of the President’s George Washington’s Secretary of the Treasury, Alexander Hamilton, was his creation of a National Bank, which unified all the currencies and debt held by the thirteen colonies. A nation that does not have sovereign authority over its currency and credit will never be truly free, and its people will suffer from underdevelopment..

Map showing those countries using the CFA franc
It’s used by Benin, Burkina Faso, Guinea-Bissau, Ivory Coast, Mali. Niger, Senegal and Togo in West Africa, and Cameroon, Central African Republic, Chad, Congo-Brazzaville, Equatorial Guinea and Gabon in Central Africa

Read: Africa’s CFA Franc Colonial Relic or Stabilizing Force