Africa and China Cooperate on Development and Eliminating Poverty

Minister in the Presidency Jackson Mthembu

November 8, 2019

Cabinet applauds Chinese investment push for attracting R116bn

31st October 2019 BY: AFRICAN NEWS AGENCY

The South African government on Thursday applauded the growing trade and economic relations with the People’s Republic of China, which has led to at least 88 Chinese companies investing massively in the country’s economy.

Addressing media in Cape Town on the outcomes of a Cabinet meeting held on Wednesday, Minister in the Presidency Jackson Mthembu said the growing two-way trade between Beijing and Pretoria has led to Chinese companies investing a capital expenditure of R116-billion from 2003…

Read: South Africa Cabinet Applauds Chinese Investment

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China’s capacity building support wins acclaim in Ethiopia

ADDIS ABABA, Nov. 4 (Xinhua) — Ethiopia on Monday commended China’s support to the East African country’s capacity development endeavors as the two countries set to mark 50 years anniversary of the establishment of diplomatic relations next year.

Tilahun Sarka, Director General of Ethiopia-Djibouti Standard Gauge Railway Share Company (EDR), stressed the vital importance of China’s capacity development support at an event on Monday that marks the start of railway operations training for 47 Ethiopian train conductors.

Noting ongoing knowledge transfer activities that are jointly implemented by ERD, the Chinese government and the consortium of Chinese companies, Sarka also urged the new batch of trainees to effectively study train operations along with Chinese experts so as to realize the Ethiopian government’s ambition in building the East African country’s capacity in railway technology…

ReadChina’s capacity building support wins acclaim in Ethiopia

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President Xi Jinping Addressing China International Import Expo:  The Common Good of Humanity and Eliminating Poverty

Speaking at the opening ceremony of the Second China International Import Expo, President Xi Jinping discussed the continuing process of “reform and opening up,” but focused his remarks on an appeal for the world to come together for the common good.

“Of the problems confronting the world economy, none can be resolved by a single country alone. We must all put the common good of humanity first rather than place one’s own interest above the common interest of all. We must have a more open mindset and take more open steps, and work together to make the pie of the global market even bigger….

“All problems could be settled in the spirit of equality, mutual understanding and accommodation. We need to promote development through opening-up and deepen exchanges and cooperation among us. We need to join hands with each other instead of letting go of each others hands. We need to tear down walls, not to erect walls.”

“China’s development, viewed through the lens of history, is an integral part of the lofty cause of human progress. China will reach out its arms and offer countries in the world more opportunities of market, investment and growth. Together, we can achieve development for all. The Chinese civilization has always valued peace under heaven and harmony among nations. Let us all work in that spirit and contribute to an open global economy and to a community with a shared future for mankind.”

President Xi Jinping delivered his keynote address “in front of a countdown screen for winning the country’s battle against poverty,” Xinhua reported. China has so far lifted some 850 million people out of poverty, and intends to do the same with the remaining 20 million by the end of 2020. Xinhua went on to report that “Xi said China is ready to share its poverty relief experience with other countries and jointly build a community with a shared future for humanity featuring common development and the elimination of poverty.”

Read my recent post: CGTN: China Reaches New Stage of Development With CIIE

Ethiopia to Djibouti Railroad Successfully Growing Ethiopia’s Economy

Ethiopia to Djibouti Railroad Successfully Growing Ethiopia’s Economy

The Chinese-African built railroad from Addis-Ababa to Djibouti has been a success, as I knew it would. Inaugurated in October 2016, it has  allowed Ethiopia to effectively overcome being a landlocked nation. Railroads increase productivity, create growth, build cities, and establish new manufacturing-agricultural centers. Africa will be transformed-industrialized when it is able to generate hundreds of thousands of megawatts of electricity and build tens of thousands of kilometers of rail lines connecting major capitals, cities, and ports across the continent. Ethiopia has been a leader in economic growth by investing in vitally needed infrastructure, such as the Grand Ethiopian Renaissance Dam-GERD, to begin operation in late 2020.

Railroads across Ethiopia will increase its import and export capability.

Roundup: Ethiopia-Djibouti railway adds impetus to Ethiopia’s agricultural economy

ADDIS ABABA, Oct. 18 (Xinhua) — The Chinese-built Ethiopia-Djibouti railway has won acclaim for facilitating landlocked Ethiopia’s import-export necessities.

For the past more than one year, it has transported much-needed agricultural inputs to Ethiopia’s agriculture-dominated economy.

Tilahun Sarka, Director-General of Ethiopia-Djibouti Standard Gauge Railway Share Company (EDR), said in a recent interview with Xinhua that the 752 km-long Africa’s first transnational electrified railway is leveraging the smooth transportation of Ethiopia’s major import and export commodities, mainly fertilizer and wheat.

“The railway is showing major progress in terms of facilitating Ethiopia’s basic import-export activities as it significantly reduced both the travel cost and time from landlocked Ethiopia to ports in its neighboring Djibouti,” Sarka told Xinhua.

The Ethiopia-Djibouti railway commenced its commercial operations for both passenger and freight services in January last year, eventually connecting landlocked Ethiopia to ports in the Red Sea nation of Djibouti.

The EDR director underscored the railway’s achievements over the past one and a half years, with particular emphasis on easing the pressure in transporting the much-needed imported agricultural and food security inputs, mainly fertilizer and wheat, from ports in Djibouti all the way to the Lebu Railway Station on the outskirts of the Ethiopian capital Addis Ababa.

Figures from ERD show that the Ethiopia-Djibouti railway has been able to carry more than 70,000 tons of fertilizer from the Djibouti port to Ethiopia over the past few months, as the East African country embarked with its main harvesting season since May.

“Fertilizer is a very important commodity to Ethiopia’s socio-economic well-being,” Sarka said, adding “It is by far considered as a major imported priority item by the Ethiopian government.”

Ethiopia – Africa’s second populous nation with about 109 million total population, according to the World Bank’s latest report – is an agrarian economy.

The UN Food and Agriculture Organization (FAO), which described Ethiopia as “one of the top-performing economies in Sub-Saharan Africa with an average growth rate of 11 percent over the last seven years,” dubbed the agriculture sector as “the mainstay of the Ethiopian economy, and exports almost entirely relies on agricultural commodities.”

Sarka, who dubbed fertilizer as a “political cargo,” also said that “a failure to import the much-needed fertilizer would adversely affect Ethiopia’s overall security, as far as igniting public uproar against the Ethiopian government.

Sarka also emphasized the joint Ethiopian government and EDR’s future plan that envisaged “to significantly boost the railway’s share in the transportation of fertilizer to the country.”

“Both the Ethiopian government and EDR give particular emphasis to the smooth transportation of fertilizers from the Djibouti port to Ethiopia, as well as the export of other export-bound agricultural commodities from Addis Ababa and other parts of Ethiopia to the port,” Sarka said.

Ethiopia imported a total of about 1.3 million tons of fertilizer during the just-concluded Ethiopian 2018-2019 fiscal year, according to figures from the Ethiopian government.

Built by two Chinese companies, the first 320-km of the project from Sebeta to Mieso was carried out by the China Railway Group Limited (CREC), while the remaining 423-km from Mieso to Djibouti port section was built by the China Civil Engineering Construction Corporation (CCECC).

The Ethiopia-Djibouti railway is presently managed by a consortium of Chinese companies – CREC and CCECC – for a period of six years undertaking railway operation and maintenance management activities.

According to Sarka, the six-year contract was given to the two Chinese firms mainly due to the shortage of electrified railway operation and management experience in the two involved countries.

Ethiopia-Djibouti Railway

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

October 4, 2019

Below is a half hour video presentation on the importance of Alexander Hamilton’s credit policy for the development of Africa. The forum was organized by Watch Democracy Grow, an organization promoting democracy and development in Africa, and was filmed Afrique Today.

As I discuss in the video and article below, African nations need long-term and low interest lines of credit to finance trillions of dollars necessary for infrastructure projects across the continent.  Government backed authorities or the government itself can issued public credit in the amounts required. To provide credit for the newly united colonies, Hamilton designed the National Bank of the United States in 1791 at the request of President George Washington. It was a corner stone of the successful American System of Political Economy. Similar institutions are appropriate for African nations to finance vitally needed infrastructure today.  Applying the Hamiltonian model, the Belt and Road Initiative, promoted by China, is helping Africa build and finance infrastructure that is essential for African nations to industrialize and expand their agriculture and manufacturing sectors.

 

Read my article from March of this year: Nations Must Study Alexander Hamilton’s Principles of Political Economy

 

 

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.