Adviser to Ethiopian PM Abiy, Kenyan Pres Kenyatta, and US Cong Davis, All Understand: Infrastructure Essential for Economic Growth

Dr Arkebe Oqubay speaking during virtual TIPS 2020 Forum meeting
August 4, 2020

All three articles in this post highlight the essential role of infrastructure in building real economic growth in African nations as well as the United States. We are living in a perilous period of economic breakdown and loss of hundreds of thousands of lives due to the COVID-19 pandemic. Millions of impoverished people around the world are threatened with hunger, and tens of millions more are being forced into poverty and extreme poverty as a result of this dual crisis. Massive development of infrastructure, including nuclear energy, should be financed through public sector credit and a National Infrastructure Bank as part of a  “New Economic Architecture,” which is urgently required. The economic principles to finance infrastructure and an expanding agro-manufacturing sector was brilliantly put forth by President George Washington’s Treasury Secretary, Alexander Hamilton*. The levels of infrastructure required cannot be done by relying on the so called free-market, but must be accomplished by government intervention. When people are dying and suffering, you do not depend on the “markets.” Nations have the obligation to provide for the general welfare of their citizens.

Without infrastructure and manufacturing, AfCFTA will fall short – senior African policymaker

“An Ethiopian senior minister and special adviser to Prime Minister Abiy Ahmed has cautioned that, without major infrastructure investment and the development of manufacturing capacity, African countries will not be in a position to take full advantage of the African Continental Free Trade Agreement (AfCFTA), which is poised to liberalize trading conditions across 55 countries.”
Dr Arkebe Oqubay has been at the center of Ethiopian industrial policy making for over 25 years. He is the founding Chancellor of the Addis Ababa Science and Technology University (AASTU), and in 2015 he authored Made in Africa: Industrial Policy in Ethiopia

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Kenya on Course for $5 Billion Nuclear Plant to Power Industry

  • Plans to expand nuclear-power capacity fourfold by 2035
  • Kenya expects peak demand to top 22,000 megawatts by 2031

The government looks to expand its nuclear-power capacity fourfold from a planned initial 1,000 megawatts by 2035, the Nuclear Power and Energy Agency said in a report on the National Environment Management Authority’s website. The document is set for public scrutiny before the environmental watchdog can approve it, and pave the way for the project to continue.

President Uhuru Kenyatta wants to ramp up installed generation capacity from 2,712 megawatts as of April to boost manufacturing in East Africa’s largest economy. Kenya expects peak demand to top 22,000 megawatts by 2031, partly due to industrial expansion, a component in Kenyatta’s Big Four Agenda. The other three are improving farming, health care and housing.

The nuclear agency is assessing technologies “to identify the ideal reactor for the country,” it said in the report.

A site in Tana River County, near the Kenyan coast was preferred after studies across three regions, according to the report. The plant will be developed with a concessionaire under a build, operate and transfer model.

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US Congress introduces  H.R. 6422, the bill for a $4 trillion dollar National Infrastructure Bank (NIB) based on Hamiltonian principles

New Videos Show the Way Out of Crisis

*Alexander Hamilton’s Credit System Is Necessary for Africa’s Development

*Nations Must Study Alexander Hamilton’s Principles of Political Economy

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

 

US-China ‘Trade War’: What Implications For Nigeria?

My comments on the potential effects for Nigeria and Africa from a trade war between the US and China are quoted below in an article by “The Herald” a national Nigerian newspaper. (Not all of my comments are reported with complete accuracy)

The Herald Nigeria

US-China ‘Trade War’: What Implications For Nigeria?

The escalating trade disputes between the United States (U.S) and China have kept the global markets on their toes with uncertainties pervading the global economy and implications for other countries.

Analysts say the trade tensions between the world’s two largest economies portend consequences in commercial relations among countries as it has repercussions in differing degrees for some of these countries.

China constituted U.S. largest supplier of imported goods worth more than 500 billion dollars in 2017 while U.S. exports to China was approximately 185 billion dollars at the same time

However, U.S. President Donald Trump imposed varying degrees of tariffs on billions of dollars worth of Chinese products starting early 2018 and China also retaliated with its own tariffs on U.S. goods.

Since then, both countries have engaged in full-blown tit-for-tat measures that have unsettles the global markets in different degrees, which is gradually manifesting to a full-blown trade war.

Political-economists express concerns that African countries could be hit because of the global network of economies in that what affects the U.S. and China’s economies affects the entire global economy.

They say for instance, the impact was largely felt on the stock markets in Nigeria, Kenya and South Africa – with Nigeria and South Africa being the two largest economies on the continent.

Mr Lawrence Freeman, a U.S.-based Political-Economist Analysts for Africa, said that the trade war brewing between the two world superpowers could have dire economic consequences for Nigeria.

Freeman said: “If President Trumps precipitates a full-blown tariff war; it could disrupt the world economy, inflict financial penalties on China, and undermine China’s currency.

“This could lead to harmful effects for Nigeria, since both nations are coordinating currency transfers and have worked together to improve, Nigeria’s agriculture with billions of dollars of investment’’.

He opined that Trump’s trade war with China has serious political, economic, and even military implications for all nations of the world, alleging he {Trump} has little understanding of how an economy functions, and how to achieve real economic growth.

Trump is a follower of the myth of free-trade “buy low-sell dear” without regard for the economic security of a nation.

“For example, in the most recent meeting between Presidents Trump and Muhammadu Buhari, Trump proposed increasing the sale of U.S. agricultural products to Nigeria.

“This is the absolutely wrong approach. Nigeria should be reducing the amount of food imports by building up its agro-manufacturing sectors,’’ Freeman said.

Freeman also said that China, on the other hand, has embarked on an economically healthy policy of investing in infrastructure in Nigeria and Africa to drive economic growth, as evident in the Belt and Road Initiative.

According to him, Nigeria, like the rest of the African, needs massive investment in hard and soft infrastructure.

He noted that in collaboration with China, Nigeria is building railroads across the country for the first time since colonialism, observing further that this, with increasing energy production, “is essential for Nigeria to develop and achieve stability.

“President Trump should be more thoughtful in helping Nigeria overcome its huge infrastructure deficit, by joining China in expanding the BRI in Nigeria and across Africa.

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