Poverty in Africa is now by choice

24 I FINANCIAL NIGERIA I OCTOBER 2014 MARKETS AND GOVERNANCE Poverty in Africa is now by choice By Marcus Goncalves Countries throughout the world grew their economies and developed faster when their leaders made sound decisions based on national interest. W hen thinking about poverty in Africa, especially when Africa is rising in global stature, it is important to take a look at history so that it does not repeat itself. I realize my limitations on this issue; in lieu of one who is on the ground or in the field, experiencing first-hand the latest facts and events, I risk sounding like an armchair analyst. There are many in precisely this opportunistic position who have missed the forest for the sake of the trees. I hope for the advantage of being able to see the big picture, by looking at the past and attempting to discern the future. As Churchill once wryly noted: “the further backward you look, the further forward you can see.” When it comes to mineral resources, Africa is a very rich continent. It is estimated that Africa has 88 percent of the entire global reserves of platinum, 73 percent of diamonds, 60 percent of manganese and cobalt, 40 percent of gold, and 30 percent of uranium. Wait just a few more years and Africa will likely replace the Middle East as the main oil exporter to the United States (U.S.), as it already has for China. It is no surprise, therefore, to witness this new “rush for Africa,” already evident in the rivalries between China and the U.S. Regretfully, such riches of resources have not been used for the benefit and development of its people. The raw material used for the atomic bombs that the U.S. dropped over Hiroshima and Nagasaki in 1945 was Congolese uranium. Over the past fifty years, elite Israeli nationals have perpetrated conflict and injustice in Africa, all fueled by and for these mineral resources. To date, operations associated with the Israeli military or intelligence services maintain strategic criminal syndicates. As argued by Keith Harmon Snow, the award-winning independent war correspondent, “it all gets back to the defense budget, American military, and the private military of the United States and proxy groups, such as the Israelis.” Largely for military reasons, China, and most recently the U.S., have been working Marcus Goncalves We are all, including Africans, fed news about the region, but what most of us hear is often completely backward, untrue, or just plain incorrect. What we repeatedly see is the propaganda; but we are also convinced that it's more than tribalism. Where ever the fault lies, we must acknowledge that it is impossible to get African leaders to do anything unless it is in their direct interest. tirelessly to gain access to Africa's resources and to secure strategic minerals. Stephen Burgess, professor at the Department of International Security Studies at Air War College in the United States, is quite unapologetic about the urgency of America's pre-emptive right to “secure Southern Africa's uranium, manganese, platinum, chrome, cobalt and rare earth minerals for America's industrial needs and for its military, for its maintenance of weapon systems.” In his view, the challenge is greater in South Africa and the Democratic Republic of Congo, but also evident and progressing in Zambia, Zimbabwe, and Namibia where the U.S. has been losing influence. Such is his concern that he recommended a worse-case scenario where the U.S would have to “use coercive diplomacy in order to regain access to vital resources.” It is no secret that poverty levels are high in Africa because of incompetent and corrupt leadership, compounded by cunning foreign predators eager to pick over their weakened prey. Take Angola, for example, a country devastated by corruption and civil war that lasted for nearly 30 years. According to Ann Talbot, from the International Committee of the Fourth International (ICFI), it was the “U.S. administration that started this quarter of a century war in Angola when it aided and abetted a two-pronged invasion by Holden Roberto's Front for the National Liberation of Angola (FNLA) from Congo/Zaire and South Africa in support of Jonas Savimbi's National Union for the Total Independence of Angola (UNITA).” Incongruously, despite the wartorn destruction, the country is now expected to supply a quarter of American oil imports by 2015. The entire military, industrial and prison complexes revolve around minerals like cobalt, niobium and cobalt oxide. Sadly, the truth about what happens to African people in lands ravaged and pilfered by the big mining companies is hidden by the corporate media. The U.S., along with the Belgian and British governments, had already been conspiring to sabotage Congo's independence within days of its freedom from colonial rule, due to its production of diamond mining. A half century ago, Congo was already the world's largest diamond producer in terms of carat. Although 25 I FINANCIAL NIGERIA I OCTOBER 2014 MARKETS AND GOVERNANCE African Union headquarters, Addis Ababa its stones were mainly alluvial, poor quality industrial diamonds rather than the gem quality found in Angola, Namibia, and South Africa, it is estimated that as many as eight hundred thousand Congolese work in diamond pits in abysmal circumstances akin to or worse than slavery. Young boys displaced by the war are the preferred labour workers. These boys are lowered down into thirtymetre holes to dig in the mud for stones. Many drown. According to Partnership Africa Canada and Global Witness, “diamond diggers are amongst the poorest in Africa, even though they produce great wealth for others.” It is no surprise then, that despite this vast natural wealth and its potential, and that the two largest economies on the planet are keenly interested in it, Africa remains, in many ways, at the bottom of the emerging market world. Most of its countries are classified more as frontier than emerging economies, with virtually every country on the continent considerably poorer than it was sixty years ago. What will it take to open Africa's and the world's eyes to the wars, killings, rapes, and displacements that are so rampant in Central Africa, and all the other catalysts of poverty on the continent? We are all, including Africans, fed news about the region, but what most of us hear is often completely backward, untrue, or just plain incorrect. What we repeatedly see is the propaganda; but we are also convinced that it's more than tribalism. Where ever the fault lies, we must acknowledge that it is impossible to get African leaders to do anything unless it is in their direct interest. As argued by Greg Mills of the Brenthurst Foundation in Johannesburg, South Africa, African governments “are no different to any other government elsewhere, although they are apparently more receptive to international opinion given their relative dependence on outsiders for funding and other succour.” Instead of being the fuel for development, oil and mineral resources in Africa have instead tainted governance across the continent. Far from being the world's breadbasket, Africa's agriculture potential has similarly been squandered. Many African countries possess natural advantages, yet 35 of 48 sub-Saharan economies were net food importers at the end of 2000s. As a continent, Africa has remained a net importer of agricultural products in the last three decades. In 1980, Africa had almost balanced agricultural trade when agricultural exports and imports were circa USD 14 billion, but by 2007 its agricultural imports exceeded exports by about USD 22 billion. The increase in food imports since the mid-1970s has been particularly striking for basic foodstuffs such as dairy products, edible oils and fats, meat and meat products, sugar and especially cereals, implying that food importation has been increasingly important in ensuring food security. Hence, poverty remains stubbornly high. Overall, the principal causes of Africa's poverty are the harmful economic systems it endures, coupled with conflicts of all sorts, as well as environmental factors, such as drought, climate change, and population growth. While Africa is growing at a faster pace than all advanced economies and most of the emerging ones, it is not growing fast 26 I FINANCIAL NIGERIA I OCTOBER 2014 enough to cope with its population growth and needs. In my opinion, poverty remains a big challenge in Africa not because of external forces, or the U.S., the Belgians, the British, or the Israelis, though I believe they have played and still play a part in it. Ostensibly, it has remained due to weak leadership. When faults are acknowledged, consequences can readily be righted. By the same token, if leaders are willing to learn from the mistakes of the past, real change can be implemented. Surely it won't be easy, but the results could come much quicker than we may have realized as Africa rises and the transformations that are so much yearned for might take us all by surprise. Countries throughout the world grew their economies and developed faster when their leaders made sound decisions based on national interest. The globalization phenomenon has enabled countries with an opportunity to be successful and prosper without gimmicks or compromises. Today, any country in Africa has the ability to trade globally. This exempts them from any special conditions once required by foreign governments and from any form of MARKETS AND GOVERNANCE specific trade as people, capital, services, technology and goods now move freely to all four corners of the world. As emerging economies have had unparalleled opportunities for growth and development, so has Africa. It is true that in the past decade, Africa has shifted gears into fast development drive, but there is much more to be done. It is also true that African leaders have often had to make decisions under very difficult circumstances. There is no other place in the world where leaders face such enormous governance challenges as they do in Africa. But there is also no other place on the planet where leaders don't see these challenges as barriers to overcome, instead of permanent excuses for doing nothing or continuous failure. What Africa, its leaders and its partners do now will determine whether the rising aspirations of Africans and global expectations will be met. Africa has everything it needs in order to catch up with the rest of the world and narrow the gap in terms of living standards and productivity. There is no excuse for continuous and persistent poverty on the continent. Africa should aspire and attain a future of individual prosperity in cohesive societies, competitive economies, and strong regional-global interactions. The recent improved performance has already borne two benefits: raised the aspirations of Africans, and renewed global interest and foreign direct investment on the continent. As Africa rises, its leaders and its people must think smarter and more creatively. It must stop offering excuses for its poverty. Africa's people are poor because past leaders made poor choices. Current leadership cannot afford to continue making such choices. Africa is rising and has the tools to change its destiny, but leaders must go through a paradigm shift, thinking proactively about innovative solutions to its plethora of problems. In the words of Nelson Mandela, “thinking is one of the most important weapons in dealing with problems.” African leaders must think, and hard. Poverty in Africa is now a choice. Marcus Goncalves, Ph.D., a Financial Nigeria magazine columnist, is International Business Consultant, Associate Professor, Chair of International Business Program at Nichols College, in Dudley, MA, USA. [email protected]