Like many people, I’ve been trying to catch up on some recreational reading before the summer ends.
I’ve been reading a lot on East Asia, especially China recently. I’m almost done with Deborah Brautigam’s (2009) “The Dragon’s Gift: the Real Story of China in Africa”, which I skimmed through in 2011 for school essays. Brautigam’s main thesis is that China’s engagement with Africa, aimed at mutually beneficial partnerships, is inspired by its experience with Western and Japanese donors during its process of development. I recently started Martin Jacques’ (2009) “When China Rules the World: the End of the Western World and the Birth of a New Global Order”, I picked the book after…Read More »
Last week, I was at a conference organised by the Natural Resource Governance Institute (NRGI), formerly Revenue Watch Institute, on the challenges and opportunities presented by falling commodity prices. It was attended by the best in the academia, in policy and in civil society in the field.
A breakdown of the panels and speakers is available on the NRGI website.
There were a couple of things which stood out that are worth highlighting and documenting.
It seems Africans in the Diaspora generally and Nigerians in particular have reached a saturation point where any public event which features high profile African guests or speakers especially public office holders, is regarded with a “so what”, “what’s new” and “haven’t we heard it all before” attitude. This much was somewhat palpable in the atmosphere at the Eirenicon-Africa Lecture on 27th March 2012 titled “Neither the Washington nor the Beijing Consensus: A New Developmental Paradigm to fit African Realities and Cultures” which, as the title implies, was meant to discuss the way forward for Africa in terms of economic and socio-political development. One can hardly blame those who take this cynical stand point though, given that a number of African policy makers only tend to put on their thinking caps at such public events and put them away once the event is done as they resume “business-as-usual”. However, this event — one of a series of lectures organized by Eirenicon-Africa, a league of established young forward-thinking Africans — and the themes of the discussions focusing on home-grown solutions arguably signal a gradual change from the norm.
Mallam Sanusi Lamido Sanusi, the Central Bank of Nigeria (CBN) Governor was the keynote speaker, a fancy term denoting that Sanusi did most of the talking for the duration of the event. Sanusi is a man famous not only for his radical banking reforms, but increasingly for his exceptional oratorical skills because, as the moderator of the gathering accurately described, “…whatever he says is always fascinating”. The two respondents at the Lecture were Ambassador Tesfamicael Gerahtu, the Eritrean Ambassador to the UK and Ireland who exuded tremendous passion and nationalistic fervour for his country – though many an Eritrean activist in the audience held different opinions – and Professor Paul Collier, the distinguished Professor of Economics and Director of the Centre for the Study of African Economies at Oxford University who became (in)famous amongst Nigerians in January this year, for an article he wrote in which he used unsavoury terms to strongly condemn the nation-wide protests against the removal of fuel subsidies in Nigeria. The moderator was China Danforth Onyemelukwe, Managing Director responsible for Africa coverage at Goldman Sachs in London. Each of the speakers took turns outlining what they perceived to be the challenges inhibiting Africa’s development and how they felt Africa could unclasp those fetters.
Challenges Inhibiting African Development:
All three guests seemed to have a problem with the title of the event especially the reference to development models: the Washington and the Beijing Consensus. The CBN governor Sanusi for instance stated that there is nothing like the Beijing Consensus because the Chinese “didn’t go round begging people to adopt their own model” as was the case with the Washington Consensus. Ambassador Gerhatu underscored his aversion to such development models which he regards as “myths rather than reality” because they do not sufficiently capture the diversity in Africa and even within a country like China which he states “doesn’t have one single economic system, but has a diverse system”. Collier was in agreement with Gerhatu’s assessment that development is based on internal dynamics which vary from country to country and little to do with models and ideologies.
Sanusi speaking with an economist’s slant pointed to the “structurally deformed” economies in many African countries, with particular reference to Nigeria, and the problem of “value linkages” as the fetters to development. He refers to the Nigerian economy as that which “imports everything we produce and export what we don’t produce… even democracy” referring to how the Nigerian Military government under late General Abacha conducted free and fair elections in Liberia. He added that in Nigeria “we literally consume our GDP” and goes on to cite examples of how Nigerians consume meat from cattle (beef) along with the skin (kpomo, a delicacy), rather than using hides and skins to produce leather. He further stated that no country in the world developed from exporting primary commodities such as crude oil, mineral resources or cash crops — despite the prospects of earning foreign exchange — but that development comes from building the economy and from industrialization.
Sanusi attributed this structural deformity of African economies to both internal and external factors. Internally, he blames the rentier status of resource-rich countries like Nigeria and the attendant rent-seeking behaviour of the society and the political elite in particular, which is “not productive like primitive accumulation” as the acquired wealth is squandered. External factors he cited include the difficult uncompetitive position of many African economies in the global economy, aggravated by Washington Consensus policies driven by the US, World Bank and IMF to liberalize trade (free trade), take huge loans, remove subsidies etc. Interestingly, Sanusi noted the unfair prescription by the Washington Consensus policies and their drivers, for African countries to remove subsidies especially on agriculture while the US and Europe heavily subsidize agriculture – for example, Sanusi says cotton and cattle, the main exports of Mali are uncompetitive in the global market because a subsidy of 300 Euros per cow in Europe is higher than the per capita income in Mali, while the subsidies given to the US farmers is higher than the GDP of Mali. He however believes fuel subsidies are an exception, which as he argued in a talk at the London School of Economics and Political Science (LSE) in January this year, amounts to “subsidizing consumption” when developing country governments should be “subsidizing production” instead. Thus harping on this kicking-the-ladder argument, Sanusi said “every (developed) country builds its country, its economy and productive capacities, based on protectionism, then preaches free market.”
Gerhatu speaking from a socio-political perspective attributed the challenges to development in Africa to that of nation-building, the fact that “nation-building has not been properly consummated in Africa” thus affecting the prospects for creating “viable states, sound economies and a viable future for Africa”. He however placed more emphasis on external factors, the “geo-political influences and world agendas” which have “held back” developing countries and African development in particular, such as the Cold War, the Digital Divide and Globalization.
Collier regards the failure of African development as a failure to build a sense of national identity as Gerhatu noted, but rather than attributing these to global geo-political agendas, he blamed the attitude of African political elite, mainly the “plundering of resources” by the political leadership in many resource rich countries. He also underscores the weak institutions and rules in such societies which make it difficult to efficiently harness and manage resources.
The Way Forward:
As was the case with outlining the problems, the speakers differed on some points and converged on others. Sanusi advocates for African economies to be built on comparative advantage based on their factor endowments — agriculture and extractive industries for instance — and creation of better value chains within individual economies; a change that regards Africa as the prime market for African countries; greater integration between African countries by building first class infrastructure in Africa which would make African exports competitive against non-African exports on the continent; investing in technical training to make African labour competitive; and importantly encouraging Foreign Direct Investments (FDI) which build productive capacities and discouraging foreign firms which import goods: whether Europe, China or the US he fimly notes, “imperialism is imperialism”.
Gerhatu on his own part advocates for “ownership of decisions and solutions for the sake of national interests” by Africans in order to create self reliance and capacity. He also emphasizes on economic liberation by ensuring a paradigm shift from a system of dependence on foreign aid which he regards as “a system of practice, a system of thinking and a system of organization which does not help… NGOs create parallel systems of administration” therefore “we cannot make aid effective”. He referred to Eritrea not only as a country where international NGOs have NOT been active since 1995, but also as an example of successful economic diversification where “agriculture has been the target of structural transformation…” According to the Ambassador, Eritrea’s increased agricultural productivity ensured the country was not affected by the Horn of Africa famine, in his words: “despite what you have heard on CNN, BBC or from the Secretary of State Hilary Clinton” referring to “efforts and conspiracies” aimed at destabilizing Eritrea’s successes in the name of Al-Shabab or Somalia which have been largely unsuccessful.
Professor Collier posited that the challenge for Africans is to “avoid repeating the same mistake”. This he believes could be achieved by taking the “never-again” approach Germany took, to resuscitate its flailing economy after World War II, such that it is now the best run economy in Europe. Translating this “never-again” feeling to reality Collier asserted can be achieved by:
(i) Legislating economic rules for decisions, for instance Ghana last year legislated that 30% of oil revenues have to be saved for the future;
(ii) Creating dedicated institutions for these rules;
(iii) Existence of a critical mass of citizens who understand why the rules and institutions matter.
It was tempting to ask whether this three-pronged process was feasible given that those in authority who will legislate these rules and ensure the institutions work are sometimes not particularly interested in doing so, but thankfully Collier explained that young people in North Africa using technology to coordinate, presented positive prospects as young people in the rest of Africa are waking up to the reality around them.
As is usual with such events, some of the most intriguing points were made during the Q & A session. One of the most profound points made was Sanusi’s reflection over the Nigerian fuel subsidy protests in January as comprising of two conversations: the removal of subsidy itself and government accountability. He throws the poser on why it had to take the removal of fuel subsidy to start the conversation on corruption and accountability by ordinary Nigerians and the civil society and why this conversation stopped after the protests. Sanusi indicts civil society in Nigeria of shirking their responsibility in keeping the political elite in check as he believes Nigerian politicians are not more corrupt than those in US or Europe, but that the difference lies in the fact that Americans and Europeans do not tolerate lack of accountability from their leaders. He stresses on the need for those conversations started by Occupy Nigeria to be kept alive by civil society in order to bring about the change Nigerians yearn for.
During the event, reference was made to African countries such as Botswana and Ghana which are “working” relative to others which aren’t, so this writer posed a question: that perhaps the reason why countries like Ghana and Botswana are relatively successful is because they are smaller in terms of size and population with relative homogeneity compared to large countries such as Nigeria and Kenya which arguably have been unable to successfully harness and manage their diversity thereby obstructing the process of nation-building and economic development. To this, Sanusi responded by blaming the competition for rent-seeking by the political elite and the failure of the elite to “allow us develop our national identity” in their rent-seeking quests. He advocates for social justice and pursuit of a path even development in order to give everyone a sense of belonging.
Lastly, if it is any consolation to Nigerians who were deeply irked by Collier’s op-ed piece, in which he compared the mass protests in Nigeria to the Tea Party movement in America, and referred to Occupy Nigeria protesters as “loudmouths of the street” and “opportunists”, Collier acknowledged receipt of angry emails, the fiercest and most overwhelming feedback he has ever received on any write up. We can smile smugly in satisfaction to that.
Overall, one could argue that events such as the Eirenicon-Africa lecture series organized and hosted by up and coming Africans, featuring African decision-makers, discussing home-grown solutions to the challenges bedevilling the continent’s development present bright prospects for the future, and a clean break from the norm, as more Africans are realizing the need to effectively arise and take charge of their destinies.