Africa Rising: “In Economics, the Majority is Always Wrong”

Think Africa Press

Stories of Africa’s economic boom rest on shaky foundations. John Kenneth Galbraith can help.

US Secretary of State John Kerry being attentively listened to at the US-Africa Leaders Summit. Photograph by USAID/Robb Hohmann.

The US-Africa Leaders Summit, held at the start of this month, fell at a time of rising concern over the sustainability of Africa’s economic emergence. In particular, many watch with excitement, as well as anxiety, at the ravenous investor interest in African debt and in new joint ventures that aim to serve the continent’s consumers. The boom in investment has been so striking of late that these flows could soon be Africa’s leading source of hard currency.

However, while these trends continue to inspire hope in some quarters, in many other circles faith in the idea that this capital surge will generate full employment, reduce inequality and eradicate poverty is waning. Instead, various commentators now worry about overheating, overreach, resource misallocation and non-performance. Meanwhile, stories such as excessively-indebted Ghana’s recent expression of interest in subjecting itself to another course of International Monetary Fund (IMF) medicine provide further fodder to those that emphasise the potential for bubble trouble south of the Sahara.

Nevertheless, the US-Africa summit ended with a promised $14 billion in new US private investments in areas such as energy and infrastructure. This was also served up with the potential carrot of extended trade preferences under the US African Growth and Opportunity Act, and bathed in a thick glaze of philanthropic feel goodery sprinkled with a sugary, anodyne dash of corporate social responsibility. Africans might want to consider taking this meal with a lorry load of salt.

From the perspective of Corporate America, Africa offers a deep well of potential profits. Big US energy players, for example, understand that Africa’s unmet power and electricity needs represent an unprecedented investment opportunity. In fact, US agencies such as the Overseas Private Investment Corporation have already been tasked with cutting the costs of American efforts to maximise returns from African energy.

However, amidst this rush to profit from Africa’s energy needs, it ought not to be forgotten that US economic thinking may have fuelled this problem in the first place. Many economic governance ideas linked to neoclassical economic models developed primarily in the US and exported via the IMF and the World Bank have long been big stones in African shoes. And African public power and utility projects floundered in the 1980s as conditional or ‘policy-based’ loans pushed by the Fund and the Bank aborted Africa’s flirtation with the state-guided paths to development that Germany, South Korea, Taiwan and the US itself once followed.

If Africa’s economies are to develop, they must do so not simply through the reanimation of misguided market fundamentalist orthodoxies. One clear way in which the continent could do things differently − and banish long and painful memories of the politics associated with Western economic ideas − would be through the newly-established BRICS New Development Bank, which is set to have $100 billion at its disposal. Disbursements from this Bank could speed up the development of private and public sector corporations and be used to support the public provision of education, electricity, healthcare, museums, parks, water or any other unmet public need.

The BRICS bank could be hugely significant, though how exactly it is to function remains to be seen. But the New Development Bank is not the only option available to Africa. Another route the continent could take which is worthy of great consideration would be to turn to the ideas of celebrated economist John Kenneth Galbraith.

Turning to JK

The first possible Galbraithian way forward is rooted in his efforts to call out the shaky foundations of ‘accepted’ economic beliefs. The Canadian-cum-American economist famously referred to the tendency for political and economic elites to unthinkingly regurgitate ideas or explanations that their audiences assumed to be true as conventional wisdom.

His searing critique of viewpoints that departed from reality but were nonetheless esteemed for their acceptability resonates in Africa today. For decades, adherents to the neo-classical approach have attempted to control the parameters for the production and application of ‘respectable’ economic knowledge. Leading hardcore believers have actively narrowed the range of African governance options or systems subject to serious debate. For too long, the theoretical preoccupations of this knowledge cartel have obscured or discounted the ideas, institutions and power relations that actually move and constrain Africa.

Take last year’s scholarly revelations regarding the apparently ‘poor’ state of African statistics on economic growth. This attention was well warranted, but lost in the hype over ‘poor numbers’ was the reality that figures such as GDP may be unhelpful to begin with. GDP, for example, does nothing to count the contributions that hundreds of millions of unremunerated women make at home and in their communities to keeping Africa moving day in day out. Africa would be significantly helped by better-resourced efforts to gather new kinds of numbers that would enable the continent’s genuine progress to be tracked.

A second application for Galbraith in Africa can be drawn from his insights regarding the power of big corporations. As more and more transnational companies setup shop across the continent, our reference points for understanding how power is exercised must shift. Multinationals increasingly contribute to the growth of industry and professional networks unconnected to domestic centres of political power. Many also provide services in the absence of effective public provision such as sanitation and schools, and as such, private corporations now play larger roles in African governance.

Galbraith documented many innovations that mitigated corporate power, including anti-trust laws and industrial policies, that permitted the US to add more value to its exports and diversify away from its colonial-era specialisations. Similar initiatives could prove hugely useful to African economies today.

Finally, Galbraith’s work on advertising and marketing could help African leaders better understand the forces that work against the sovereignty of African consumers. His writing on this topic challenged the notion that the US was all about free choice. He showed that adverts cooked up by Madison Avenue’s ‘Mad Men’ were ultimately designed to make consumers serve corporate needs, and he detailed the centrality of advertising to the internal planning systems of consumer goods groups. In this light, corporations exerted increasing control over individual preferences over time, and underwrote the emergence of a fast food and mall culture that further entrenched their interests.

As Big Retail increasingly eyes the continent, Africa could employ these ideas to help the continent’s ‘widening’ consumers to avoid snatching underdevelopment from the jaws of emergence. The disbursement of resources that would enable whistles to be blown on false advertising and that could fund the promotion of healthy living choices would be a good start.

Galbraith is, of course, not a silver bullet. Without a doubt, there are many other wellsprings in Africa and elsewhere that could and should be tapped to refresh political economic thinking. But Galbraith does matter. And he certainly offers rising Africa a drink of political economic pluralism more revitalising than the market fundamentalist Kool-Aid that has long passed its use by date and more energising than the bogus PR that was imbibed so headily at the US-Africa summit.

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SADC – Mugabe snipes at South Africa over trade; SA and Namibia refuse to sign protocol

Mail and Guardian

Mugabe snipes at Zuma over SADC trade protocol

Robert Mugabe has said Jacob Zuma should cooperate with other SADC countries instead of trying to turn the region into a market for SA’s products.

President Robert Mugabe  (AFP)

South African President Jacob Zuma and Namibian President Hifikepuye Pohamba declined to sign the Protocol on Trade in Services at the close of the SADC summit in Victoria Falls, Zimbabwe, on Sunday despite regional heads putting pressure on them during deliberations.

Zuma, elected chairperson of the SADC troika on politics, defence and security during the summit, was immediately criticised by SADC chairperson President Robert Mugabe of Zimbabwe.

Mugabe said Zuma should cooperate with other countries instead of seeking to turn the region into a market for South Africa’s products.

SADC members signed the protocol in August 2012, but South Africa and Namibia requested more time to consider. The protocol sets out general obligations for all state parties with regard to the treatment of services and service suppliers from other countries. It does not contain liberalisation obligations, but provides for a mandate to progressively negotiate removal of barriers to the free movement of services.

During the closing ceremony, the master of ceremony announced that Namibia and South Africa would sign the protocol but when SADC secretariat aides brought the protocol to Pohamba, he declined to sign after a brief chat with his Trade and Industry minister Carl Schlettwein. Zuma also consulted his International Relations and Cooperation Minister Maite Nkoana-Mashabane before declining to sign.

Mugabe held a press conference after the official closing ceremony where he urged Zuma to cooperate with other SADC countries. He said they had appealed to Zuma to sign the protocol during the summit.

‘Reciprocal relationship’
“We also appealed to South Africa which is highly industrialised to lead us in this and work with us, and cooperate with us and not just regard the whole continent as an open market for products from South Africa,” said Mugabe. “We want a reciprocal relationship were we sell to each other and not just receive products from one source.”

Meanwhile, Pohamba and Mozambiquan President Armando Guebuza, whose terms of office are coming to an end this year gave farewell speeches during the closing ceremony.

In a communiqué released after the summit, the heads of states agreed to seek the intervention of the African Union to resolve the political crisis in DRC and support Madagascar in its rebuilding process. “Summit also called upon the United Nations in cooperation with the African Union, to play its role in repatriating FDLR elements that have voluntarily surrendered and disarmed or provide them with temporary resettlement in third countries outside the Great Lakes region,” part of the communiqué reads. Mail and Guardian

Cameroon closes border with Nigeria to halt ebola spread

Reuters

YAOUNDE Tue Aug 19, 2014  (Reuters) – Cameroon has closed all its borders with Nigeria in a bid to halt the spread of the Ebola virus, state radio said on Tuesday.

The virus has killed more than 1,200 people in four West African countries, four of whom have died in Nigeria.

“The government has taken the decision to protect its population because it is much better to prevent than cure the Ebola virus,” Minister of Communications and government spokesman Issa Tchiroma Bakary told Reuters. Reuters

 

Nigerian troops mutiny over poor equipment and refuse to fight Boko Haram

BBC

Boko Haram crisis: Nigerian soldiers ‘mutiny over weapons’

Members of the armed forces in Borno state, Nigeria - April 2013The defence forces have not been able to crush the militants who have moved to bases in the bush

A group of soldiers in north-eastern Nigeria is refusing to fight Islamist Boko Haram militants until they receive better equipment, one of the mutineers has told the BBC.

The soldier, who requested anonymity, said at least 40 of his colleagues would refuse orders to deploy.

A defence ministry spokesman said the incident was being investigated.

A state of emergency that was declared in three north-eastern states last year has failed to curb the insurgency.

The Nigerian army is not ready to fight Boko Haram” A mutinying soldier in Borno state

Boko Haram is fighting to create an Islamic state in Nigeria – and has stepped up its attacks after being pushed out of its bases in Maiduguri, the capital of Borno state, targeting towns and villages in deadly raids.

‘Sacrificing soldiers’

“Soldiers are dying like fowl,” the soldier, who said he and his colleagues were just outside Maiduguri, told the BBC Hausa service.

“The Nigerian army is not ready to fight Boko Haram,” he said, explaining that soldiers were not being given enough weapons and ammunition to take them on.

“Boko Haram are inside the bush, everywhere,” he said “They [senior commanders] are sacrificing soldiers,” he said.

Defence ministry spokesman Gen Chris Olukolade told the BBC’s Focus on Africa programme that he could not confirm the reports of a mutiny but would investigate.

He denied that soldiers were being “sent to die”.

“We may not have all it takes but we are improving on it [equipment] regularly,” he said.

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Who are Boko Haram?

A screen-grab taken on 12 May 2014, from a video released by Nigerian Islamist extremist group Boko Haram Boko Haram leader Abubakar Shekau has been designated a terrorist by the US government
  • Founded in 2002
  • Initially focused on opposing Western education – Boko Haram means “Western education is forbidden” in the Hausa language
  • Launched military operations in 2009 to create an Islamic state
  • Thousands killed, mostly in north-eastern Nigeria – but also attacks on police and UN headquarters in capital, Abuja
  • Some three million people affected
  • Declared terrorist group by US in 2013

Who are Boko Haram?

Profile: Boko Haram leader Abubakar Shekau

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Even the vehicles the soldiers were expected to use were old armoured cars that were not up to the job, he added.

A general in the army, who asked not to be named, told the BBC that he was unable to confirm the mutiny, but said “cowardice” was not uncommon in times of war – and any mutineers would be punished.

When the solder was asked if he feared being court-martialled for taking part in the mutiny, he said that a soldier could only be taken to task for refusing to go to war.

Map

“I joined the army to defend my country”, but you cannot defend it without being equipped to do so, he said.

In April, Boko Haram caused global outrage by abducting more than 200 girls from a boarding school in the remote town of Chibok in Borno state.

The group has also carried out a wave of bombings and assassinations, including that of moderate Muslim leaders opposed to its ideology.

BBC

 

Liberian ebola patients found – update on cases in W Africa

BBC

Ebola crisis: Liberia finds ‘missing patients’

Ebola awareness campaigners stage a street performances at an event in Monrovia, Liberia - 18 August 2014Public awareness campaigns are being stepped up in Liberia, where some people believe Ebola is a hoax

Seventeen suspected Ebola patients who went missing in Liberia after a health centre in the capital was attacked have been found, a minister has said.

“They were traced and finally they turned themselves in” at a treatment centre, Lewis Brown told the BBC.

The government had previously denied they were missing.

New UN figures show that 1,229 people have now died since the beginning of this year in the outbreak that has also hit Sierra Leone, Guinea and Nigeria.

Map: Ebola outbreak in West Africa

The World Health Organization (WHO) says there were 84 deaths reported between 14 and 16 August.

Doctors ‘improving’

Ebola has no known cure, but the WHO has ruled that untested drugs can be used to treat patients in light of the scale of the current outbreak – the deadliest to date.

It is transmitted by direct contact with the body fluids of an infected person. Initial flu-like symptoms can lead to external haemorrhaging from areas such as eyes and gums, and internal bleeding which can cause organ failure.

A man carries out a girl from an Ebola isolation centre as a mob overruns the facility in the West Point slum on August 16, 2014 in Monrovia, Liberia.This man took a young girl out of the West Point health facility during the attack
Liberian Police dressed in riot gear deploy at a Doctors Without Borders Ebola treatment centre in Monrovia, Liberia (18 August 2014)Security has been stepped up at health centres treating Ebola patients in Liberia

The Liberian information minister said the missing patients were now at the newly expanded treatment unit opened over the weekend at the John F Kennedy Memorial Medical Center in the capital, Monrovia.

Mr Brown also said the health of three Liberian doctors infected with Ebola had improved after they receiving the experimental drug Zmapp.

Two US missionaries, who were flown home for treatment from Liberia, are reportedly recovering from the virus after taking doses of the same medicine.

The drug was also given to a 75-year-old Spanish priest who contracted Ebola in Liberia, but he died in Spain last week.

In Nigeria, which has had four fatal Ebola cases, health officials say five people have now recovered from the virus and been discharged from hospital in Lagos. Another three are still being treated.

‘A hoax’

The attack on the quarantine centre, where 37 people were being held in Monrovia’s densely populated West Point township, took place on Saturday evening.

There are conflicting reports over what sparked the riot, in which medical supplies were also stolen.

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Ebola Virus Disease (EVD)

A fruit bat is pictured in 2010 at the Amneville zoo in France. Fruit bats are believed to be a major carrier of the Ebola virus but do not show symptoms
  • Symptoms include high fever, bleeding and central nervous system damage
  • Fatality rate can reach 90% – but current outbreak has about 55%
  • Incubation period is two to 21 days
  • There is no vaccine or cure
  • Supportive care such as rehydrating patients who have diarrhoea and vomiting can help recovery
  • Fruit bats, a delicacy for some West Africans, are considered to be virus’ natural host
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Officials said the protesters were unhappy that patients were being taken there from other parts of the capital. Other reports suggested the protesters had believed Ebola was a hoax and wanted to force the centre to close.

The BBC’s Jonathan Paye-Layleh in Monrovia says there are also reports that the mattresses and linen being used by patients were taken during the attack.

The current outbreak is the deadliest since Ebola was discovered in 1976

In neighbouring Sierra Leone, the agricultural minister has said the outbreak is also having a severe impact on the economy, as 66% of people were farmers and agriculture accounted for 46% of GDP and 25% of all exports.

“We’re expecting devastating effects not only on the labour, but we’re also talking about farms being abandoned by people running away from the epicentres,” Joseph Sam Sesay told the BBC.

Since the outbreak spread to Nigeria in July, when a person infected with Ebola flew from Liberia to Lagos, several airlines have stopped flights to the worst-affected countries.

Kenya’s ban on people from Guinea, Liberia and Sierra Leone entering the East African nation comes into force on Wednesday – and Cameroon has closed its land, sea and air borders with Nigeria.

BBC

Kenya – gunmen attack Garissa police station

Nation

A map showing Garissa County. Unknown men attacked Bodhai police station near the Garissa-Lamu border and burnt a vehicle on August 18, 2014. PHOTO | GOOGLE MAPS 

Unknown gunmen attacked Bodhai police station in Garissa County Monday night and burnt a vehicle.

A police officer was injured in the incident that occurred at around 9pm.

Garissa County Commissioner Harun Rashid Khator said the attackers fled after the incident.

He said they are yet to establish if there are more casualties.

Mr Khator said all security heads from Garissa County are heading to the area. Nation

South Sudan: Who’s Keeping the War Going?

allAfrica

Photo: South Sudan Tribune

President Salve Kiir addressing the South Sudanese community in Washington, DC

Washington, DC — With as many as 1.5 million people displaced by conflict and a worsening humanitarian situation, South Sudan’s former Vice President Riek Machar has turned down President Salva Kiir’s latest peace offer – to incorporate the rebel leader into a transitional unity government prior to elections set for next year.

Three days ago, amid renewed fighting in several areas, United Nations forces reported rescuing around 400 civilians who fled fierce fighting around the government-held town of Bentiu. A United Nations compound there is sheltering around 50,000 displaced people in its facilities ill-equipped for the influx.

Machar told the Voice of America that he still demands direct talks with the government instead of the plan by Igad – the Inter-Governmental Authority on Development – which was tasked by its east African member governments with mediating a solution.

Igad wants South Sudanese civil society – non-governmental and religious organizations – involved in the peace process, to broaden the constituency for achieving and maintaining peace, a position supported by the South Sudan government. Machar rejects that approach, saying that his representatives and the government should formulate a power-sharing agreement between themselves.

Sandra Bulling, a communications officer for the international aid and development organization CARE, was in Bentiu last week, where she said conditions for the internally displaced people are grim and that the rainy season has caused additional hardship. “Our nutrition center was flooded,” she said, “meaning malnourished children and their mothers did not get any support that day.”

Also last week, in a rare field visit by the UN Security Council to a conflict area, U.S. Ambassador Samantha Power said 50,000 children were threatened with starvation in the coming months. UN officials and human rights organizations say both sides in the conflict block essential food deliveries by humanitarian organizations.

President Kiir, meeting with journalists in Washington DC during the U.S. Africa Summit this month, blamed the crisis on the rebel fighters. “I don’t know when the suffering will stop,” he said. “But if the warring parties would agree to stop fighting, automatically it will end the suffering, because the humanitarian assistance would flow to the people who are in need.”

The president voiced strong support for the Igad-supervised peace process in Addis Ababa, Ethiopia. “I personally traveled to Addis Ababa in May and signed the ceasefire on 9th May,” Kirr said. “Unfortunately, within two days the ceasefire was violated by the forces of Riek Machar…I came back in June, on the 10th. We signed another ceasefire.”

Kiir said that he is a forgiving person and bears “no grudge” against Machar, but he complained that Machar is not in control of rebel forces on the ground. “I said in front of Igad and all those present that Machar claims that he has forces, but he is not in command of those forces…This is why there is no cessation of hostilities.” He challenged Machar to return to South Sudan to exert his influence for peace – and to prepare to run in the upcoming national elections, if he wants to contest them.

In several recent statements and interviews, Machar has said Kiir should have no place in the country’s government, despite his overwhelming election as South Sudan’s leader. Machar charges that the government is practicing ethnic cleansing against the Nuer group, to which he belongs.

“What would Salva [Kiir] present to the people as the programme to unite the people?” Machar is quoted by Sudan Tribune in an article on Friday. “He committed genocide, he committed mass killing – what programme would he talk about? Nothing.”

President Kiir acknowledged that both Nuer and Dinka, his own ethnic group, have engaged in violence against each other. He also cites crime and lawlessness as common problems in the young nation, which voted for independence from Sudan in 2011.

But he said that his government has tried to stop ethnic killings. “I appealed to the people – anybody who is my supporter – don’t attempt to kill any Nuer person,” Kiir said. “It is not the tribe who rebelled; it is Riek Machar.”

And in the nearly hour-long conversation with journalists in Washington, Kirr insisted that the conflict is, at heart, not tribal but is a struggle for power. He pointed to destruction in the city of Bor, which is the capital of Riek Machar’s home state of Unity, one of the country’s oil-rich regions.

“When he [Machar] was killing people in his own home state – people have to flee, they ran to where I come from, my state. If there was a tribal conflict, why would the Nuer people run to a Dinka state? People received them, and they are now there in their tens of thousands.”

The president reiterated that the peace process led by the Igad negotiators was the way forward. “We are committed to the peace process under the Igad,” he said. “We are also committed, as a government, to humanitarian work.”

South Sudan Finance Minister, Aggrey Tisa Sabuni, who traveled with Kiir to Washington, told AllAfrica that the president had established a committee to look into ramifications of the conflict when it broke out in December. The results of the investigation, he said, reinforced the government’s insistence on the regionally brokered peace process.

The minister headed the sub-committee on financial and economic issues. “Within two weeks,” he said, “we predicted that there would be a terrible reduction in government revenue – both oil and non-oil. We predicted that there would be loss of human capital. We predicted that there would be dislocation of economic enterprises. This has come to pass.”

Asked if he can be optimistic about South Sudan’s future in such dire circumstances, the finance minister said there is no choice but to press ahead. “We’re in the middle of a tornado,” he said. “It is destructive while it lasts, but it will blow past, and development will resume.”