United Nations Conference: The Lake Chad Basin Should not be ‘Managed’; it Should be ‘Transformed.’

August 19, 2019

United Nations Headquarters, August 5-6, 2019

On August 5-6, I had the opportunity to participate in the “Third International Conference on the Lake Chad Basin Region: SDG Implementation-UN System and Non-State Actors Exploring New ways of Cooperation.” The two-day conference at the United Nations Headquarters was hosted by the Permanent Mission of Nigeria to the United Nations, under the guidance of Dr. Ibrahim Umar. The assemblage was first addressed by ambassadors from three of the nations of the Lake Chad Basin; Permanent Representatives from the UN Missions of Chad, Niger and Nigeria.

Lawrence Freeman with Dr. Ibrahim Umar, Nigerian Mission to the United Nations

The convening of this UN session is in response to the worsening living conditions for approximately 30 million Africans living in the Lake Chad Basin, whose livelihood is centered around the shrinking Lake Chad. Today the estimated area of Lake Chad varies from 1200-1300 square kilometers to upwards of 2,000; a 90% contraction from its 1963 level of 25,000 square kilometers.  During the afternoon panel of the first day, the conditions of Lake Chad were addressed by Charles Ichoku, Professor of Earth and Environmental Sciences at Howard University, and this author, who is Vice Chairman of the Scientific Advisory Committee of the Lake Chad Basin Commission.

Transforming is Superior to Managing 

Dominating the conference were speakers representing NGOs and international organizations, who accurately depicted the extent of the horrific humanitarian, refugee, and food crises prevailing in the region in detail. Regrettably, there were those who accepted the diminutive size of Lake Chad as unalterable. Some of the participants offered short term solutions and others believed that the recharging of the lake is not an easy or viable option. However, they miss the point; that to comprehensively address the issue of the Lake Chad Basin will require nothing less than the full recharging of Lake Chad. It is only in this way that the humanitarian issues, poverty and underdevelopment can be tackled in the long run. In my presentation I challenged some of the pessimistic thinking in the conference by stating unequivocally: “None of the solutions that have been discussed will work, unless the lake is recharged.” It should be noted that United Nations Secretary-General, Antonio Guterres, has pledged to collaborate with President Buhari of Nigeria, to raise the $50 billion necessary for the recharging of the lake.

Lawrence Freeman addressing the United Nations Conference on the Lake Chad Basin on the first day

My slide presentation demonstrated how the lake can be recharged to its previous level through Transaqua, an inter-basin water transfer project. Transaqua, designed in 1980 by Dr. Vichi of the Italian engineering firm, Bonifica, proposed to build a 2,400-kilometer canal created from 5-8% of the water in the Congo River Basin. The navigable gravity-driven canal would connect to the Chari River, in the Central Africa Republic, which releases its flow into Lake Chad. This bold innovative project is a “win-win” for the twelve nations of the Lake Chad and Congo River Basins, and for all of Africa. Responding to the necessity of recharging the shrinking Lake Chad, the project provides a unique opportunity to create a super economic “development zone” amongst the nations of the two basins. Trade, and commerce would increase by orders of magnitudes, hydroelectric power would be produced, millions of additional hectares would be irrigated, new roads created, new fisheries and manufacturing centers would be built. This author also presented to the audience the conclusions from the three-day International Conference to Save Lake Chad, held in Abuja Nigeria-February 26-28, 2018, at which the Heads of State from the nations of the Lake Chad Basin, endorsed Transaqua as the preferred method to expand the lake.

Both before and after my presentation numerous presenters spoke out against “big projects” and “diverting water” as if the Africans suffering in the region want the lake to remain at 10% of its previous level. International intervention and technology to alleviate the conditions in the basin were also eschewed in favor of local projects and listening to the so called “voice of the people.” Manage! Manage the existing deplorable conditions; don’t even dare think of changing-improving was echoed repeatedly.

On the second day, this author was compelled to speak out against the condescending attitude that assumes Africans do not want to enjoy the same standard of living as all the speakers from the US and Europe. I asked, if they thought that those people struggling for daily survival within the Lake Chad Basin wouldn’t desire clean running water, and having access to 1,500 watts of electricity 24 hours a day all year?

 

A slide presented by Mr. Freeman at the UN conference displaying the Transaqua inter-basin water transfer project

Underlying Cultural Beliefs About Mankind

Approximately five to six thousand years ago Lake Chad was a mega lake comprising 1,000,000 square kilometers. There are reports that several hundred years ago, Lake Chad almost disappeared. The lake sits on top of three aquifers and are adjacent to the gigantic Nubian Sandstone Aquifer.  Clearly the growth and shrinkage of the lake over millennia predates so called anthropomorphic caused climate change. Lake Chad is fed by river systems from Nigeria and Cameroon, the most significant contributor being the Chari River from the Central African Republic. With the southern movement of the Tropical Conversion Zone there is less rainfall thus reducing the flow of water into the lake. The closest source of water to refill and maintain Lake Chad is the super moist Congo River Basin, hundreds of kilometers south. A feasibility study should confirm the Transaqua hypothesis for the potential of a continuous flow of water into Lake Chad, resulting in transforming the entire region.

The failure to test and analyze the Transaqua proposal for almost four decades, even though many people were concerned about the worsening conditions resulting from the shrinking lake, leads us to examine a deeper cultural problem.

Over the last half century, Western societies have become victims of cultural pessimism. Our cultural paradigm has shifted away from one of optimism and confidence in human’s ability to discover new scientific principles that lead to technological revolutions for the betterment of humanity. In the years following the historic 1969 landing of humans on the Moon, inspired by the leadership of President John Kennedy, our culture has been dramatically altered for the worse. The previously discredited Malthusian dogma reasserted itself, with false assertions that if population growth was not stopped the planet would run out of resources. This was accompanied with hysterical calls for population reduction. Over time, as our culture became more decadent, the very progress of our society was assailed with attacks on science, technology, and industrialization.  In this new perverted ideology humankind, (made in the image of the Creator) became the devil-the source of evil itself in the world.

Ambassador Tijjani Muhammad Bande speaking at a reception hosted by the UN Nigerian Mission for the Lake Chad Basin conference

Contrary to declarations  that humans are destroying the environment, there is no such adversarial relationship. The physical universe is organized on the principle of continuous development and is predisposed to respond positively to the intervention of human creativity. Humankind is not just a caretaker or a steward. Humanity was created to interact with the universe for unending growth. Reflect on the biblical injunction in Genesis 1:28: “Be fruitful and multiply and fill the earth and subdue it and have dominion over the fish of the sea and over the birds of the heavens and over every living thing that moves on the earth.”

Yes, we can and must transform the Lake Chad Basin. We can end suffering, hunger, and poverty in that region, and across the African continent. That is what humankind was created to accomplish. Let us not reject our fundamental human essence: to willfully transform our planet (the universe) for the perpetuation of our uniquely creative species.

 

Distributed at the UN conference reported on above: UN Statement on Transaqua for Lake Chad

Distributed at the Abuja, Nigeria conference 2/26-28/2018:  Now Is the Time to Think Big and In the Future 

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

 

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

Hunger and Poverty Are Killing Africa’s Children. It is a Crime Against Humanity: Must Cease Now!

July 2, 2019
Hunger in Africa is rising (courtesy of Africanews.com)

Although I do not agree in full with the analysis in the report: “For Lack of Will: Child Hunger in Africa,” written by the Ethiopian based African Child Policy Forum-ACPF, none the less, it provides a startling study of the horrific effects of hunger on Africa’s children that should be read by all. (See link below for PDF).

The study states that child hunger in Africa is increasing, and presents the following shocking statistics on hunger in Africa:

Globally 10,000 children die every day due to hunger, and in Africa, hunger contributes to about 45% of childhood mortality. One third of child deaths in Africa is attributable to micronutrient deficiencies. Almost half of all child deaths on the continent are caused by hunger!

  • Ninety per cent of children do not meet the criteria for minimum acceptable diet.
  • Sixty per cent of children do not meet the minimum meal frequency.
  • In 2017 alone 14 million children were affected by wasting.

Africa Needs Real Economic Growth

The report correctly identifies poverty as the primary cause for hunger-access to food, estimating that in 2013, 49% of children in sub-Saharan Africa lived in extreme poverty-less than $2 per day.

Unfortunately, the report commits a fundamental error when it repeats the commonly accepted specious statistics of economic growth for African nations.

“Growth in Africa over the last two decades has been impressive by historical and world standards. But it has not been inclusive, with little impact on child hunger.”  

If African economies had experienced real physical growth over recent years, then poverty and hunger would have declined. Instead, both poverty and hunger have increased in many sections of the sub-Saharan continent.

The reports of economic growth are inflated in a specific way; they do not measure real physical growth, but substitute calculations of price valuations of goods and services. There is a fundamental difference, which I will repeat here, because the actual criteria of economic growth is poorly understood.

Very briefly, true economic growth refers to enhancements in the physical production of goods necessary to sustain an expanding population at a constantly improving standard of living. The success of this growth depends on three essential features of an economy. An integrated infrastructure platform of rail, road, energy, and water. A viable manufacturing sector. Plus, the application of continued technology and scientific progress by an educated and healthy workforce. Of course, there is much more to be considered, but these requirements are indispensable. Simply adding up the price-valuations of extracted raw materials, real estate, services, stock exchanges, bank profits, etc. are measurements of monetarist values; not economic growth. Read my early post for fuller analysis: Africa Needs Real Economic Growth Not IMF Accountants

Various sleight of hand tricks and out right sophistry has been used to hide the reality that despite reports of so-called economic growth, poverty is increasing in sub-Saharan Africa, disproportionately compared to the rest of the world. Fallacious explanations have been given, like jobless economic growth, or growth that has not trickled down to the people, or non-inclusive growth. However, the bold truth is that Africa has not experienced the reputed growth that has been touted by all the financial intuitions, which sadly many Africans still believe and repeat.

According to this study, malnourishment has increased from 215.5 million in 2014 to 256.5 million in 2017. Other indicators of Africa’s poverty are; 338 million Africans living in extreme poverty, and 3.2 million children under the age of 5 die each other. Applying the figure of 45% of child deaths due to hunger, this would mean approximately 1.5 million African children die from hunger-poverty yearly.

What Need To Be Done

Under the section: “What is to be done?” the report states “No child should go hungry. This is a moral imperative.” I would add, that no adult, no human being should go hungry. While the study calls for radical transformative policies to be put in place, which is absolutely true, it then calls for “…government commitment to giving greater political visibility to ending child hunger.”

This is a grossly inadequate response to genocidal like elimination of Africans due to hunger. Since the liberation of African nations from colonial rule over six decades ago, the glaring lack of infrastructure and industrialization has plagued the continent. It has led to crippled economies, resulting in the deaths of hundreds of millions of Africans, which were preventable. While infrastructure in roads, rail, energy, ports etc. has finally begun to be built in the last decade, it is insufficient to address the glaring need of Africa’s existing 1.2 billion people and projected 2.5 billion by 2050.

Nothing less than a brute-force military-like commitment by Africans and their allies to inundate-saturate the continent with infrastructure, is required. This is the only pathway to eliminating hunger and poverty.  It should have been done years ago. It must be done now.

Read: Child Hunger in Africa

 

 

 

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.

Nigeria to Expand Manufacturing; UN Praises China’s Belt and Road

APRIL 11, 2019

Nigeria plans special economic zones to double manufacturing by 2025

(courtesy thisdaylive.com)

Nigeria is Africa’s biggest economy but it lacks a strong manufacturing base, which contributes less than 10 percent to its total gross domestic product (GDP). The country has maintained a strong currency to ensure it can keep imports pouring in, with a growing proportion coming from China.

 

“Project MINE’s (Made in Nigeria for Export) strategic objectives are to increase (the) manufacturing sector’s contribution to GDP to 20 percent … and generate over $30 billion annually by 2025,” the ministry of industry, trade and investment said in a statement.

The government has set up Nigeria SEZ Investment Company, which will finance industrial parks in special economic zones in the commercial capital of Lagos, southeastern state of Abia and northern state of Katsina.

The government is currently raising capital of $250 million for Nigeria SEZ Investment Company. It plans to double its equity to $500 million over four years, the ministry said.

The West African country’s manufacturing and agricultural sectors have been neglected since the 1970s oil boom, when Nigeria began making easy money from crude oil sales.

Nigeria, where the vast majority of the population lives on less than $2 a day, recently emerged from a recession but growth is fragile and the government is trying to diversify its revenue away from its reliance on oil.

President Muhammadu Buhari, who is due to start a second four-year term next month, has pledged to revive the economy and is focused on building roads and expanding the railway network to lower production costs…

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UN Africa Official Vera Songwe Calls BRI ‘Probably One of the Biggest Growth and Development Initiatives in the World’

In an interview with the Xinhua that appeared on April 10, Vera Songwe, executive secretary of the UN Economic Commission for Africa (UNECA), hailed the role that the China-proposed Belt and Road Initiative (BRI) would play in addressing Africa’s problems in infrastructure and job creation. She told Xinhua that the BRI will positively affect hundreds of millions of people in different countries, while it helps Africa develop infrastructure connectivity of varied types and creates job opportunities that are pressing issues on the continent.

“This (BRI) is probably one of the biggest growth and development initiatives that we have in the world,” the UN official said, adding that the BRI is essential to the continent. She believes that the initiative, in which many African countries “infrastructure today is one of the necessary requirements for Africa’s growth,” Xinhua reported.

Nations Must Study Alexander Hamilton’s Principles of Political Economy

Hamilton Versus Wall Street: The Core Principles of the American System of Economics
Nancy Bradeen Spannaus iUniverse, Bloomington, Indiana, 2019, 222 pp. $13.99 soft cover, $5.99 e-book.

Hamilton Versus Wall Street: The Core Principles Of the American System of Economics      By Nancy Bradeen Spannaus

A Review by Lawrence Freeman-March 28 2019

For those followers of our beloved Alexander Hamilton and for those new to his writings, this book is for you. Nancy Spannaus, in her just-released book Hamilton Versus Wall Street, makes a unique contribution to the existing volumes written on Hamilton’s political and economic thoughts.  In her relatively short easy-to-read book, she weaves together Hamilton’s revolutionary ideas on political economy that served as the pillars for the creation of the United States, their legacy in the next two centuries of America, and their influence internationally. Throughout her treatise, Spannaus also provides constructive historical analysis of the battle inside the United States to adopt Hamilton’s concepts. This book is a valuable complement to Hamilton’s economic reports and will aid those unfamiliar with his seminal texts. *

Spannaus polemically begins by countering the popular myth that Hamilton was an agent for the banks (Wall Street) against the interests of the “little man,” agrarian society and the states, as espoused by Thomas Jefferson and others.  She later devotes entire chapters to Hamilton’s opposition to the British central banking system and Adam Smith, exposing another slander which alleged Hamilton was a supporter of the British aristocracy.

Principles of Political Economy

            Unlike like other publications on Hamilton that gloss over or give insufficient attention to Hamilton’s ground-breaking concepts of banking, credit, and manufactures, Spannaus makes a great effort to elaborate Hamilton’s contributions to: “The Core Principles of the American System of Economics.”  **

All nations would benefit greatly, if their leaders and citizens studied Hamilton writings. American culture would not be at the low level it is today, if my fellow citizens had been taught Hamilton’s economic theories, which in fact were crucial to the creation of our nation from thirteen indebted, agriculturally-based colonies. Advanced sector countries that are dominated by financial systems dictated by Wall Street and the City of London, and underdeveloped nations that rely on resource extraction and farming, because they lack a manufacturing sector, could learn a great deal from Hamilton.

However, Hamilton’s thinking about economic growth was not limited to the mere production of goods. He understood for society to continually increase the productive powers of the economy, the development of the human mind was essential. Spannaus quotes Hamilton: “To cherish and stimulate the activity of the human mind, by multiplying objects of enterprise, is not among the least considerable of the expedients, by which the wealth of the nations may be promoted.” (p. 28).

Friederich List, a student of Hamilton’s philosophy in the nineteenth century, wrote that “capital of mind, capital of nature, and capital of productive matter” are all essential components to achieve economic progress. (p. 29)

Hamilton’s First National Bank (courtesy ushistory.org)

The Constitution and Public Debt-Credit

Hamilton knew that for a nation to be truly sovereign, it must possess the means to produce the physical wealth necessary to maintain the existence of its citizens and their posterity. It is no coincidence that the Founding Fathers embedded this concept in the profound Preamble to the US Constitution. As Spannaus emphasizes, for Hamilton, the importance of establishing federal credit through the creation of the National Bank, stabilizing the currency, developing the manufacturing capability of the young United Sates, and increasing the wealth of the nation through internal improvements, was coherent with the intent of the Preamble “to form a more perfect Union.”

Hamilton used the “general welfare” clause of the Preamble to justify his revolutionary idea to create a public-private National Bank to consolidate the separate states and establish a unified currency to promote national economic growth. Generations later, in the footsteps of Hamilton, Franklin Roosevelt, who studied Hamilton’s writings, would also rely on the “general welfare” clause to garner support for his New Deal and other programs he initiated to revive the U.S. economy wracked by the Great Depression.  

Public Credit, anathema today to virtually all Democratic and Republican leaders, was another key concept Hamilton fought for, knowing that private sector funds and privately-owned banks would never adequately fund a nation’s economic growth, especially for large-scale internal improvements, i.e. infrastructure.

To emphasize the unique role of public credit, Spannaus lists four exceptional periods in U.S. history when the efficacious application of government-issued credit led to a pronounced expansion of the American economy. These are administrations of Presidents George Washington, John Quincy Adams, Abraham Lincoln, and Franklin Roosevelt. (p. 55-56)

In chapter 7, the author concisely summarizes Hamilton’s outlook: “…it is the deliberate increasing of the productive powers of labor through technology, improvements in infrastructure, and the use of government power to create credit that will produce value in the economy.” (p.128) This is more than good advice that all public officials. government leaders, and informed citizens should follow to secure a joyful future for their nation.

In Africa and other underdeveloped regions of the world where nations have suffered from hundreds of years of exploitation of their natural resources, Alexander Hamilton’s wise words should be fully grasped: “The intrinsic wealth of a nation is be measured, not by the abundance of the precious metals contained in it, but by the quantity of the productions of its labor and industry.” (emphasis added p. 1)

*Hamilton wrote four major economic reports for Congress and President George Washington between January 1790 and December 1791: Report on Public Credit; Report on a National Bank; Report on Manufactures; and Opinion as to the Constitutionality of the National Bank.

**This is the subtitle of Hamilton Versus Wall Street.

China is NOT Exploiting Africa, But Investing in its Future: The Case of Nigeria

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)

1)    Infrastructure

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…

3)    Manufacturing    

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.

 

Read: Nigeria’s Balanced and Diverse Relationship with China

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.

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).”