Poverty is more or less a manifestation of how a society shares its resources and how much of these (natural) resources are there overall. While some individuals describe poverty as a disease, others believe that poverty is a product of ignorance. Regardless, Africa has occupied an unenviable position worldwide as the Mecca of poverty.
Statistically speaking, 34 out of the 50 nations on the 2006 UN list of least developed countries are in Africa. In 1820, the salary of an average European worker was about three times that of the average African, yet the same European worker would earn twenty times what the average African earns today. Yes, the GDP per capita income in Africa has increased significantly, unfortunately compare with other parts of the world, the African GDP increase is still much less. Although one could rightly say that poverty has been reduced worldwide from about 40% to fewer than 20% in the last 30 years, this significant achievement is barely visible in many African countries. Presently, over 40% of people living in sub-Saharan Africa are still battling with absolute poverty. Amongst those African countries, which are blessed with natural resources, extreme inequalities between their rich and poor citizens are a cause for concern. Arguably, poverty eradication in Africa has witnessed some progress in the last 60 years; Africa still has a long way to go ““ especially, having in mind that the continent has the potential to make a big difference. While many countries in the world have made significant progress in the areas of health, education, infrastructure, living standard, etc. the majority of African countries with their different unique histories, battle many unique challenges. Experts have argued that Africa has at least 200 billion dollars sustainable development investment potentials. The question remains as to why the continent remains addicted to foreign aid rather than try to eradicate those social ills which have punctuated financial flow, investments and development?
Many African countries have witnessed unfair land distribution, which has left many indigenous Africans perpetually poor, despite the fact that the continent is blessed with large amounts of arable land. Rather than small, individual land holdings or ownership, tribal or colonial land ownership is very common in Africa. This land disfranchise has left a large sum of land in the hands of ethnic groups or descendants of European settlers. A typical example is in South Africa, where about 82% of the arable land belongs to the European descendants. We have similar problems in Namibia, Zimbabwe, Kenya and other African countries. More often than not, many Africans do not have credit facilities or collaterals in case of loans. The result is that these Africans are economically slaves and squatters in their countries. Interestingly, a radical land reform could help address this land distribution injustice. However, one is faced with a double jeopardy when this land reform instead, gives birth to a situation whereby the land ownership is concentrated in the hands of few cronies of the ruling government. This is a sad situation in some African countries, which set out to reverse the evil of the land distribution through land reform.
Obviously, the problems with the redistribution of land is often caused by rampant corruption and mismanagement in Africa. From more than $500 billion, which Africa has received from the West in the form of direct aid, a greater percent of this money has found itself in private accounts stocked up in the same Western countries where the financial aid comes from. Sadly, rather than investing in medical care, education, pensions, industries, etc. another part of the aid, goes to misplaced investment priorities like weapons and defence, with little or no income or developmental results. Worse still, some African countries, ironically buy weapons from the same Western aid donors. The investment in defence often gives rise to conflicts, including long standing civil wars, which result in economic and social destruction. A case in point is Sierra Leone and Liberia, still bleeding from the economic hemorrhaging of the civil war, despite the huge natural resources the countries have. One needs not mention the Somalia debacle.
More often than not, after the avoidable destructions due to the senseless war, the same African countries would award contracts to construction companies owed by Western aid donor governments to re-build the shattered infrastructure. A vicious circle you would say, wouldn`t you? Often, in a weak democratic setting, where free and fair elections are a utopia, leaders who owe nothing to their electorates or those who attach more importance to family relationships than national identity, usually institutionalize corruption, nepotism, and mismanagement as a political norm. This seems to explain why some think that African problems are caused by Africans themselves:
“Africa is not poor financially, but it needs to get its house in order. For too long we have allowed the narrative of Africa to be one about raw materials and natural resources coming out of Africa, yet Africa can take advantage of its own comparative advantages, including these natural resources, and become the leader in the value chains that require these raw materials.” Stephen Karingi, director of regional integration, infrastructure and trade at the United Nations Economic Commission for Africa (ECA), once said.
Could good education help Africans get their houses in order? Yes, education is knowledge, however, if one blames African woes on lack of education, how can one explain the fact that most African leaders are educated enough to know what to do? Moreover, these African leaders travel to developed countries where they see how things are done. Some might ask: why can`t these African leaders take a leaf from the developed countries? Agreed that African leaders cannot do all themselves, they have educated officials (some of them studied abroad) who can transform the economy. Perhaps, we should differentiate between educated and visionary leaders. I am not sure President Paul Kagame is a Yale trained economist; nor are leaders of Botswana and other upcoming African countries, yet these leaders have succeeded in transforming their countries within a short period of time. On the other hand, one could not help asking why the likes of president Bingu wa Mutharika could not transform their country despite the economics degree obtained abroad? Nor does his work at the World Bank and the United Nations Economic Commission of Africa help explain the ironic situation.
Despite having one of the largest labour forces in the world, Africa still perpetuates policies that encourage inefficiency ““ industrially and agriculturally. The result is that the manual productivity is given more attention than machines, which creates inefficiency and low productivity. In an environment where that manual productivity is the backbone of the economy, any threat to the workforce affects the whole economy. Africa is a home to many diseases ““ some of them easily treatable. Aids epidemic alone claims more than 3,000 lives in African daily, with an additional 11,000 Africans infected. Apart from the Aids havoc, preventable waterborne diseases, contributes to infant mortality in Africa. Before one talks of the latest deadly killer, Ebola, mention must be made of other diseases such as malaria, tuberculosis, tapeworm and dysentery, sleeping sickness, Polio, etc. It does not help that out of ignorance or religious fanaticism, some of this sickness are encouraged or not tackled adequately. A typical example is the comeback of Polio in the Northern Nigeria due to the misconception in certain quarters in that section of the country that the vaccine is actually an attempt by the Western government to harm the (IslÄmic) citizens.
Clearly, even with a skilled labour force, African countries hardly tap the potentials of its workforce. The result is often the case that most of the highly skilled labor are not encouraged to use their skills to develop Africa. Often out of frustration, these highly skilled Africans move to the Western countries where their skills are not only appreciated, but equally used to contribute to their own economies. Interestingly, countries like Canada often encourage high skilled immigrants to immigrate to the countries where they are offered lucrative jobs. The result: African brain drain at the expense of development of the western economies.
Some have argued that remittances and domestic resource mobilisation will help Africa unlock the financial resources to drive its development. However, research has shown that the total illicit financial outflows in Africa are more than remittances from immigrants abroad. In the last ten years, the illicit outflows in Africa, which stand at about 50 billion dollars a year, are equivalent to nearly all the official aid to Africa. Does one need to be an economist to do the obvious calculation here?
All said and done, Africa is not a wasted continent. Yes, the continent is battling with problems, but Africa is not in economic slumber. According to the World Bank, 17 of the 50 improved economies in 2013 are from Africa. Equally, the GDP growth in Africa in the last decade is at five per cent average. Improved democratic reforms, better governance, macroeconomic management, expanding regional markets, etc. have amongst other factors, contributed immensely towards this economic growth. But Africa must not relax in jubilation. There are still many economic challenges ahead; the road towards economic powerhouse is far. Africa must equally embark on serious long term transformational reforms aimed at redressing its unexplored or poorly-managed resources.
“Africa has all the ingredients to be a financial hub and an investment magnet along the lines of “Switzerland” if only it can improve its investment and trade climate, tackle corruption and raise money internally. We need to get our policies right and allow for the kind of investments that people can make in Switzerland.” Adama Elhiraika of United Nations Economic Commission for Africa (ECA) said.
Is Africa ready for transformation and does it have the continental frameworks for it?