BUSINESSAFRICA.NET NEWSLETTER ISSN 1563-4108 Dr. QUENUM & ASSOCIATES INVESTMENT AND BUSINESS PLANNERS Fax: +1 347 534 9329 Email: Click here to get email address
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ECONOMIC AND POLITICAL ANALYSIS

Corruption:

Yes, one cannot bury one's head into sand to avoid seeing corruption in Africa.

Petty corruption exercised by civil servants in state's offices, in public hospitals and by police forces on roads / traffic control check points; requesting few bucks from citizens before delivering administration papers and documents; to inject necessary drugs and pretending to prevent road accidents.

These people are just trying to survive. Salaries and wages are so low that civil servants cannot cope with their basic needs and African social burdens. What can they achieve with a monthly salary in the range of US $ 30 to 100? How can they pay for housing costs (rent, electricity, water), scholarship duties for the children, medicare, funerals.

High places corruption amongst the ruling circles. These people are solicited by businessmen from developed countries scouting for contracts. In that case there is a "corrupted" and a "corrupter". A simple question: Who is the guiltiest?

Saying that, we are not giving absolution to those thriving in corruption, building huge fortune, picking state's meager financial means and stacking them in foreign banks abroad. We are just saying that corruption is not a phenomenon just peculiar to Africa. It exists everywhere. In ancient and modern time. No need to go back to Ancient Egypt. One just need to read European, Asian and American newspapers. "Scratch the shining blazons of old European big families; prominent, nowadays, in the world of finance and global entrepreneurial business and you shall find blood and shit" wrote Oriana Fallaci, the famous Italian journalist / reporter.

What is revolting in the case of Africa is the fact that the majority is living in sheer poverty, while a minority is having fun!

Lack of basic infrastructure:

Globally, sub-Saharan African countries lack basic infrastructure: roads, bridges, dams, public hospitals, schools, universities, research centers. Almost everything is missing or not sufficiently established.

However, what is seen, right now as a stumbling block on the road to the economic development of Africa - the lack of basic infrastructures - is, truly, an immense asset. Africa is the only virgin world's territory left over for huge investments in infrastructure.

So, after a quick review, one can say that none of the three main reasons - "Bad governance and Mismanagement", "Corruption", "Lack of infrastructure" - put forward by pessimists to paint Africa as a doomed continent, is a real hindrance.

It is exaggerated to say that Africa is doomed and we are back to the question outlined a moment ago. That is to say:

How to convert / transform / use / magnify and develop the endless business opportunities available in any of the 48 sub-Saharan African countries into an economic growth's launching-pad?

Do we need a global "African Recovery Plan" as brilliantly advocated by President Tabo Mbeki of South Africa? Click here to read an interesting interview he recently delivered to the Financial Times. Remark: In case the link given is no more active at the Financial Times' website, you may search FT's archive with one of the following search-criteria: Mbeki / Date: Monday, November 27, 2000 / Journalists: Victor Mallet and Richard Lambert / Africa.

Yes, of course. Such a "African Recovery Plan" is an absolute necessity. It will stand as a canvas for further economic integration of Africa into the international marketplace.

Macroeconomics questions raised by President Mbeki, in the interview above mentioned, are fundamental in securing the economic recovery of the black continent. Africa's trade relationships with the developed world need to undergo some reshuffling. Right now, it is more beneficial for African countries to export raw materials to these markets. If things remained unchanged there is no incentive for African countries to start manufacturing for export. Because the tariffs grid to be applied to African manufactured goods are not well defined and set.

The "African Recovery Plan" is welcome. The quickest it is established, agreed upon and ratified, the better. Africa needs it to counterbalance some of the drastic WTO's terms and conditions.

However, there is a fundamental problem which should also be properly addressed to make the recovery program a success. Namely: the establishment of a "Global Stability Pact" for Africa. Without peace, there is no development. Civil wars and regional conflicts are plagues, which should be avoided, banned; stamped out from the inception.

Ecowas - Economic Organization for Western African States established a "Mediation and Security Committee", a regional ministerial body - composed of foreign and defense / security ministers - in charge of permanently watching and screening members states' national political scene; to prevent the escalation of internal political tensions into civil or regional conflicts.

It will be a good thing to integrate such a committee into the "African Recovery Plan" and provide substantial financial means and legal framework for effective operations. Any African country willing to benefit from the "African Recovery Plan" should adhere to the principles of "Good governance", "Full democracy", "Ban of coups".

Rules shall be clearly laid out, to tackle political disputes and crisis between ruling government and opposition political parties; as soon as they reach a critical phase. Not complying with the "Mediation and Security Committee" recommendations shall trigger immediate sanctions from the international community against the recalcitrant.

Looking at the following Africa map, one can notice seven out of eight of the African countries, which have the best potential - abundant natural resources, relatively developed economy and the adequate consumer base / population size - to become the economic driving forces for the continent are either at war: Sudan, Democratic Republic of the Congo, Angola and Ethiopia; or embroiled in stupid self-generated economic and political chaos: Nigeria, Ivory-Coast and Zimbabwe - Choose to review briefs about said countries.

If solutions are not found to political, economic and religious conflicts raging in these countries, there will be no African recovery.

Once these conflicts resolved, the implementation of an integrated development scheme - with the Synergetic Impact Factor here available for reviewing - in these above currently troubled-countries, and in South Africa, will trigger the African recovery and lead us to the African Renaissance.

Nigeria will drive western African states' economic boom. Sudan will lead the recovery in Center-Northeast Africa. Angola and the Democratic Republic of The Congo's economic recoveries will radiate throughout central Africa. South Africa will assist increasing the economic power of the SADC region.

We are deeply convinced that there is not a single poor African country. Only lack of imagination, wrong strategic moves, bad political decisions, stupid self-induced political and economic disturbances; mismanagement of available resources led Africa to the current state of poverty. The continent's future, however, is not doomed. Economic recovery is possible.

Once established the necessary conditions for the economic recovery - "African Recovery Plan", "Mediation and Security Committee" - the economic development scheme to be implemented in any of the 48 sub-Saharan African country, should target double digit annual economic growth rate.

Anything between 3% to 9% does not help. Taking into account the annual growth rate of the population - averaging 3 to 4% - and inflation rate in the range of 5 to 7% (a conservative viewpoint!) it is obvious that anything less than 10% annual economic growth rate is just for survival.

It will take us up to several decades, far beyond the second century of the new millennium, to alleviate prevailing poverty and create descent living conditions for the populations, if we do not target double-digit economic growth rate; and manage to sustain it over three running decades.

We have to make some collective brain storming; think about ways and means to reach the target of + 10% annual growth rate. We at BusinessAfrica / Dr. Quenum And Associates / "Investment And Business Planners" believe that the challenge can be successfully accomplished. In next delivery entitled: "Less than 10% economic annual growth rate? That's peanuts for an emerging country " we shall expose our contribution on how to achieve a double digit annual growth rate in any of the 48 sub-Saharan African country.

Dr. B.M. Quenum
Editor of Africabiz Online
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Click here for a "Strategy for an African country".
Click here for a "Regional development scheme" with an "Income Building Power" operation..
Click here for "Less Than 10% Annual Economic Growth-Rate? That's Peanuts for an Emerging Country"