Africa News blog
African business, politics and lifestyle
Far from being all bad news for Africa, the global financial crisis is a chance to break a dependence on development aid that has kept it in poverty, argues Zambian economist Dambisa Moyo, who has just published a new book “Dead Aid”.
Moyo’s book, her first, comes out at a time when Western campaigners, financial institutions and some African governments have been warning of the danger posed to Africa by the crisis and calling for more money from developed countries as a result. The former World Bank and Goldman Sachs economist spoke to Reuters in London.
“I’m not saying its going to be easy, I’m just saying that there is a real opportunity for policymakers to focus on coming up with more innovative ways of financing economic development. In a way the crisis actually provides the African governments with the situation where they cannot rely on aid budgets coming through from the West.”
Moyo believes more than $1 trillion in development aid over the past 50 years has only entrenched Africa’s poverty, distorted economies and fuelled bureaucracy and corruption. She sees alternatives such as encouraging trade – particularly with emerging markets – encouraging foreign direct investment, microfinancing for enterprise and seeking funds from capital markets.
Where once African officials might have viewed infrastructure projects solely as a good source of kickbacks, these days there is pressure from electorates, at least in some countries, to deliver on promises of improvements.
The growth that many African states have enjoyed in recent years has exposed the failure of the continent’s infrastructure still more starkly – with even South Africa suffering the kind of power outages that much of the rest of Africa has grown far too used to.
African officials meeting in Tunis this week to discuss the impact of the crisis argued that the continent needed better representation, given the effects that the turmoil is having in Africa as well as the continent’s growing financial importance. The complaint could apply equally to other developing countries.
The new U.S. command for Africa began independent operations on Wednesday, after being carved out of three other Pentagon units previously responsible for the continent. President George W. Bush originally wanted Africom to be based in Africa, and Liberia has offered to host it. But the plan met with considerable hostility on the continent, especially from big powers South Africa and Nigeria and oil giants Algeria and Libya. Many ordinary Africans were also cynical, believing Africom would be a cover for Washington to counter growing Chinese influence and control vital oil supplies from West Africa — expected to provide 25 percent of U.S. needs by 2015.
The hostility forced Washington to rethink its plans and Africom, expected to reach its full complement of 1,300 by the end of next year, began work from Stuttgart, home of the existing European command, although officials clearly expect to open a base in Africa sometime in the future. It also pushed U.S. officials to emphasise that there was no hidden agenda, that Africom would not threaten the sovereignty of any nations and that a base would not be built in Africa without the full agreement of potential host nations. They also said half of Africom’s leadership would be composed of civilian agencies including the State Department. Africom’s stated aim is to help African countries face everything from natural disasters to terrorism and its targets will including drug trafficking, arms smuggling and the kind of piracy now plaguing the waters off Somalia. Experts say U.S. forces have been cooperating quietly for years with African armies, particularly in the Horn of Africa and the Sahel where rebel and al Qaeda-affiliated groups operate. They say Africom got a bad press initially because it was associated with heavy-handed U.S. policy in Somalia and as part of the U.S.-led ”War on Terror”, but now Pentagon officials are treading more carefully, realising how sensitive Africans are about suggestions Washington is trying to dominate.
Isolation might seem like a good idea when it comes to the storm sweeping global finance and there is no doubt that African countries are among the most isolated in the world economy.
Avoiding the impact seems unlikely, though, particularly at a time when Africa as a whole has been enjoying its fastest growth for decades and the continent has become an increasingly popular investment destination – not only for Asian countries in search of resources but for frontier investors willing to take higher risks for higher returns.
For Zimbabwe’s long-suffering people, the true meaning of the signing of a power-sharing agreement between President Robert Mugabe’s ZANU-PF and the opposition MDC would be how quickly it leads to an improvement in their daily lives. An economic crisis that began in 1998 has turned the once prosperous Southern African country into a basket case economy with the world’s highest inflation at over 11 million percent. Millions of Zimbabwean’s who have fled across the borders to escape unemployment and severe shortages are waiting to see if the political deal will result in economic rebound paving the way for their return.
The agreement negotiated by South African President Thabo Mbeki provides for the sharing of power between veteran President Robert Mugabe and Morgan Tsvangirai, leader of the main opposition Movement for Democratic Change (MDC). Tsvangirai takes on the new role of Prime Minister with extensive powers, with Mugabe’s 28-year hold on power significantly eroded.
The signing of an agreement between Robert Mugabe’s ZanuPF party and the two formations of the MDC marks the beginning of an exciting period in the political history of Zimbabwe. The national economy has been devastated by, inter alia, disastrous political and economic policies formulated and implemented by the Mugabe regime. Fortunately, most of the development and economic infrastructure still remains largely intact, and the Zimbabwean economy could recover from the current meltdown in a fairly short time.
Zimbabweans are reputed to be hard-working people. Although many highly skilled Zimbabweans have since left the country for greener pastures both in the region and further afield, the country still boasts a highly skilled labour force.
Italy settled its colonial era dispute with Libya at the weekend with $5 billion in compensation for wrongs done during colonial rule. The money will be invested in a major new highway as well as used for clearing mines and other projects. Both sides say that will allow them to make a new start.
Relations between Libya and Italy had been especially difficult and this was a very specific dispute, but Italian colonialism did not last all that long in Africa – even if there were episodes of particular nastiness while it did.
The lines of Europe’s carve up of Africa were finally taking shape. On March 11, 1913, Britain and Germany agreed who got which bits of a swampy corner of the continent that few in either of the cold and distant countries had heard of.
Two states that did not exist at that time put the border agreement into effect again on Thursday with Nigeria formally handing over the Bakassi peninsula to Cameroon.