While attending the launching of the report of the Commission for Africa (CfA) titled “our common interest” in the impressive building of the British Museum in London on the 11th March 2005, I felt that something historical is taking place here with Tony Blair and Gordon Brown in the driving seats. One should be clear. The report is on Sub-Saharan Africa (SSA). North Africa is not eligible. The overall objective seems to favour more fairness in doing business with Africa. Unfortunately, too much importance has been given to Government representatives acting among themselves. Non-State actors especially the Business community does not seem to appear very prominently. This could become a serious bottleneck since the Business community, especially the small and medium enterprises, generates most of the wealth created in Africa and elsewhere.
1. Shifting the development paradigm with Non-State Actors
The so-called recovery plan abusively translated as an “Africa Marshall Plan” does not question the overall development paradigm which brought the development divide so high between Sub-Saharan Africa and Western rich countries. The report should be praised, among other things, for selected issues such as:
- Full debt cancellation for least industrialized countries in Africa;
- Doubling development aid up to $ US 100 billions by 2015 through various mechanism such as re-evaluation of gold reserves at the International Monetary Fund and commitment of industrialized countries to use this accounting “reserves” to pay off LIC’s multilateral debt owned to multilateral financial institutions and bilateral donors; Special global and specific taxations may come into force after a more large consensus among rich countries;
- Improvement of governance including tackling corruption in Africa as well as in OECD countries including multinationals firms;
- Fulfilling the Millennium Development Goals through a global awareness approach based on the diffusion of the Report of the CfA as well as building global consensus on issues such as health, education, poverty reduction, international partnerships, gender equality in SSA.
- Advocacy for Fair trade for Africa while condemning western countries double standard positions on agriculture subsidies, tariffs barriers, institutionalising of trade rules which does not take into consideration the development agenda at the World Trade Organisations (WTO),
- Suggesting a better decision making position for Africa in development finance institutions’ organs such as the World Bank and the International monetary Fund…
For an official report, the Report appears as surprisingly straightforward about the sources of Africa’s failures, although emphasis was put on the “Africa” side. Nothing is really new except that the Report is a kind of memory refreshment for those who made promises some 45 years ago to reach 0.7% of their respective Gross Domestic Product to support developing countries and failed to do so. The Donors’ Aid fatigue seems to be over but who said that Africa is requesting Aid only. It is not debatable anymore that a new partnership restart can take place without additional development aid. But what are the new conditionalities? The Report insisted on practicing good governance, democracy, free trade, open society culture and would like to enter a new deal with the exactly the same leaders, at least some of them, who specialized themselves in playing lip service on those issues. Could it work with the same type of actors only?
How can non-State actors be involved and contribute to the success of this revitalisation proposal for Africa? The operational logistics for implementation of the Report still needs to be clarified with the “CfA implementation committee”. Will this framework plan bypass NEPAD and the African Union’s strategic vision and various proposals for which the same donors did not demonstrate any financial commitment yet? It is true that the African population did not endorse NEPAD vision and some African countries are in the process of improving this democratic deficit situation. Due to the difficulty to respond to those challenges, African Non-State actors including the African Business community (with the Diaspora) should be vigilant. They should not be used again as part of a UK public relation (PR) exercise which could end up as an expensive clever “window-dressing operation”.
The report of the CfA should be acknowledged as a UK led courageous attempt to follow-up on the African Heads of States’ new collective vision structured around NEPAD and its Peer Review Mechanism.
Since the launching of the Marshall Plan for Europe in 1947, the Brandt Commission in 1980, the African Lagos Plan of Action in 1980 and the World Bank/Berg Report in 1981, Africa was alternatively considered as a reserved continent or a continent of reserves for rich countries. That particular unwritten western understanding of the division of Africa’s continent does not seem to be really questioned in this report. Difficulties to implement some of the recommendations in Francophone Africa are much higher than in Anglophone or Lusophone Africa. The regional dimensions which appears to be the cornerstone of NEPAD and African Union new approach seems also to be diluted in the quest for fostering co-operation between super-powerful groups and individual African countries. Would it not be more innovative to structure the Report of CfA on a sub-regional basis and ensure that negotiation for implementation takes place between regional groups such EU versus SADC, or EU versus ECOWAS including non-State Actors? Putting everything in perspective, the amount received by 15 European nations (individually and on a regional basis) through the Marshall Plan in 1947 and onwards was $ US13,325.8 millions. The so-called African Marshall Plan is expecting to reach $ US 75 m in year 2015 for more than 47 African countries.
Supplying on favourable terms, rich countries with raw materials from developing African countries competing among themselves seem to be the underlined assumption in the CfA. What is new is the political will of UK to do it in a fair, transparent and eventually equitable manner. Trade Policy needs therefore to be reviewed and WTO too. Failing to do so, summarizing the CfA report, as pull out from Gordon Brown Africa’s recovery plan under the slogan “live now, pay later” is definitively not the position of the Africans, nor that of the African Business community.
Nobody could agree to transfer the debt burden to the next generation if possibilities do exist today to reengineer the present one-way development paradigm. Post-colonial approaches in business, post-Washington consensus, Post-Structural adjustment converted into strait jacket package Poverty Reduction Strategy Programmes need to be entirely revisited with alternative thinkers and Private sector representatives dedicated to corporate social responsibility. Getting everything “right” with only the same governments official might not be possible, nor effective. The challenge raised by the Report is just huge and needs everybody’s contributions.
The shift in the development paradigm should enable the view of all Africans to emerge. Selected African experts and selected Government officials cannot represent the view of non-State actors. It would be suggested that the African Business community be given the chance to react to some of the proposal and have them incorporated at the operational level before getting the “blessing” or not of the G8 and the European Union. A propos, why could other alternative sources of funding not be tapped? Several oil countries might be interested in building capacity and capabilities in Africa especially in the productive sector. A special window should be opened in the International Financial Facility if the CfA is scheduled to build an effective and more balanced international community ownership. Supporting the African Productive Capacity Initiative as well as its flexible Facility should serve as a good example.
As the CfA is also serious about implementation, the involvement and the support of Non-State actors especially the African Business community could become the cornerstone of fulfilling the high expectations placed mainly on government’s officials both from rich and poor countries.
2. Towards shared economic growth in Africa
With 2.4% of world trade export and 2.2% in world trade import in 2003, Africa is not an equal partner in the global system. As a consequence, Africa is of no strategic importance to the Western countries. This could explain why the Commission for Africa’s report is concentrating more on assisting than helping create operational capacity and capabilities in a hostile business environment in Africa. Don’t give me a fish, but teach me how to catch fish has been a Chinese Leader’s slogan for years. Because of the cold war and competition between the Western and the Eastern countries on dogmatic approach to development, nobody noticed that both parties have frozen the possibility to improve Africa’s technology upgrading for a while. Will this now become a real priority for the UK led original attempt to move the development agenda forward? Yes, if again Non state actors are directly involved.
It is therefore clear that aid, trade, and investment without production might not be sustainable in Africa. Africans need to produce now and pay later. Effective Partnership cannot take place if NEPAD, African Union and the African non-State actors including the Business community (local and Diaspora) are marginalized or left out. The overall approach should focus on generating wealth and decent jobs in Africa and not satisfying the reduction of extreme poverty only. With the general consensus that the MDGs will not be reachable in 2015 but between 2050 and 2070 depending on the statistical sources, it could be of interest to revisit the MDGs itself and ensure a more proactive role to the Africans themselves which cannot be represented by selected Government officials only.
Why Gordon Brown, one of the most dedicated western official committed to get Africa believe in: “Live now and pay later”. The share of Africa in the world total manufactured value added which stands for the capacity of Africa to produce is structurally low and went from 0.7% in 1990 to 0.7% in 2003 and best estimation is around 0.8% in 2004. It is therefore crucial that the report of the Commission for Africa (CfA) concentrated more on the role of Business in the global production network, the generation of value added by Africa and its Diaspora. Falling to do so, taking proactive actions on debt reduction, improvement on issues such as health (fighting aids, tuberculosis and malaria), education, corruption, governance, trade, poverty reduction, peace and security may again not serve as a leverage for Africans standing on their feet but rather favouring a new convivial (?) dependency towards western countries. Besides, UK Commission acknowledged the fact that with globalisation, partnering with Africa’s leaders should gradually move from dependency to interdependent relationships.
With the possible consequences of poverty on Western countries such as a large flow of immigration, control of the proliferation of diseases, eventual new terrorism due to asymmetrical wealth creation between rich and poor countries, Africa became a question of global security per default. UK leaders decided to build on the New Partnership for Africa’s Development (NEPAD) vision. It does not stop the UK government to use the report as a public relations exercise to cover some of its disappointment results in Africa and Iraq. Internal leadership fight between the Chancellor of exchequer and the Prime minister should also not be underestimated. Nevertheless, Tony Blair, British Prime Minister, seems to be serious about his goodwill to highlight Africa as the “scar on the conscience of the world”. Unfortunately, the challenge does not lie in analysing Africa’s situation as a means to convince G8 or European Union leaders, but more in how to implement jointly with Africans, especially the non-State actors of which business community and Diaspora, operational projects which could improve the level of technology content, ensure more efficiency in management in a conducive environment, thus helping Africa to recover its dignity and economic independence.
Nobody in Africa really refuses to pay its debt back. It does not also make sense really to write off debt for corrupt African regimes whose selected members are hijacking major productive capacity entities in the country. As the result, economic growth in Africa does not necessary lead to improved well-being for the population. Linking growth and poverty reduction as indicated in the CfA report might therefore be misleading. The overall development paradigm needs to be questioned because it is the same economic growth approach, which results in shifting Africa from roughly 7.45% of the world trade in 1948 to 2,3% in 2003. That cannot be considered as a western success story and the usual auto-congratulation of political leaders should stop. One of the reasons of this dreadful result is the marginalization of and the lack of support for the local business community and relevant infant industries. Most of the debt owned to the local private sector is usually due in local government administration. The fact that international debt service is paid in priority to international finance institutions which are putting their accounting books in order meanwhile making profit at the expense of poor Africans. Meanwhile debts owned to local entrepreneurs are just forgotten, thus contributing to the neutralisation of the emerging of a strong local industrial capacity interested in the contribution to poverty reduction.
In the report of CfA, Tony Blair and Gordon Brown are promoting the NEPAD/African Productive Capacity Initiative, which is based on a shared economic growth vision. Nevertheless, too much attention is still being given to “improving trade between Africa and western world on a more fair, equitable basis. Does is mean that the Report of the CfA, if funded by G 8 and European Union, will reverse drastically the downstream terms of trade of African commodity? From which fair trade are we talking about when for almost 30 years price of sugar fell by 77%, cocoa by 71%, coffee by 64% and cotton by 47% while military expenses and unfair subsidies in Western countries are following an upstream trend? The NEPAD vision is incorporated in the Report. The expectations are high, and future disappointment from African Non-State actors might be high too. Not because, some aid money will flow, some foreign direct investment (FDI) might stop-over in Africa ($ US 7 billions to Africa in 2002) as compared to Asia ($ US 57 billions), but because, our “common interest” seems to offer a non-written priority to the medium-term interest of the western countries over the medium-term interest of African Non-State actors.
The forefront priority is to enable Africans to “fish” and not get aid to buy some canned fish caught by modern western vessels operating near the African coasts. Therefore Africans should produce first, trade and pay later. With selected rent seekers Governments still in place, the unwritten “embargo” on African countries with bad governance records might not be workable. Some western countries still continue to do business with them. The corruption issues in Africa are as difficult as the answer to the question whether the chicken or the eggs comes first. The role of the private sector, the role of African Business leaders including those from the Diaspora needs to be taken into consideration while structuring the implementation committee of the CfA. “Erasing the scar” should start with a reconciliation conference with appropriate stakeholders.
It is a controversial and populist issue to launch a development paradigm based on “debt forgiveness”. It does favour indiscipline. Would it not be wiser to “subsidize” the unacceptable interest rate calculated on any of the capital amount lend to Africa? Would it not be more operational to open the door for a positive discrimination initiative and provide incentives for firms and Development finance institutions dedicated to corporate social responsibility and use Africans and its Diaspora in their human resource policy instead of paying just very high salary to expatriates? To make it brief could we not think about a new development paradigm based on a glocalized (global and local) approach to growth called “shared growth”? Why should social cohesion in Africa be sacrificed at the expenses of the population because of contradictory interest among powerful global productive public and private entities?
Yes, removing rules of origin and trade barriers will contribute to additional creation of African productive capacity and capabilities in partnership with western companies. But again, when it comes to opening the western countries markets and improve African goods in terms of quality, norms, delivery, and etc. western countries’ businesses leaders appear to be more reluctant. Subsidies to non-competitive farm production in western countries are not going to be dismantled fully in the near future. This must be a dream if African leaders still believe in it. is the sharing of economic growth and profit with Africans on a fair basis becoming a hot issue?
Till now, with the rules of origin and western protectionist conditionalities, any businessman or businesswomen based in Africa interested in getting expertise or equipment from abroad, was just prevented from doing so. The AGOA, the American Growth Opportunity Act, in Lesotho in the cotton/textile and apparel value chain is becoming a real success because George Bush accepted to postpone the original deadline (2008) of the AGOA trade preferences agreement to 2015. He understood that productive capacity is the key to leverage on shared economic growth in Africa. To facilitate it, rules of origin were removed. Should all G8 and European Union Government not follow this approach without questioning whether each of them should get compensated for it or alternatively run for “exception” as it appears with European Union led package on “Everything but Arms”? Failing to do so, this will delay the whole commitment and the implementation of high expectations raised in the name of “common interest”.
3. Exploring the Way Forward
In addition to most of the valid recommendations made in the report, the following main points should be considered as crucial if bottom-up approach and African non-state actors and people’s views are to be considered:
- Ensuring gradually that the CfA implementation committee be enlarged to Non-State Actors and decentralised. It should gradually become a co-operation between NEPAD and the organized private sector representatives such as the African Business Round Table a one-stop shop for public-private partnership support to Africans with the objective of creating decent job and enhance well-being in Africa;
- Concrete jointly agreed projects and programmes favouring regional economic integration should be listed under a contract to be signed by concerned parties for implementation;
- Building and interconnecting databases with available technology and know-how of interest to Africans with the aim to facilitate job creation, investment and business opportunities;
- Establishing an alternative think thank highlighting Non-State actors views including business community and get them to reach consensus with Government actors think tank on operational proposals of interest to people both industrialized and least industrialized countries;
- Ensuring that projects and programmes favour skills upgrading in order to build capability and capacity in Africa. In the business areas, one should always attempt to promote activities and partnerships where the upgrading of technology content is given as a priority;
- Promoting the role of the African private sector through various mechanisms including decentralized cooperation where decisions to support CfA could take place directly between for example a Mayor of London or Dublin and any of the African local administration, some for mayors of rural areas.
- Debt owned to the Business community at the national and regional levels in Africa should be cleared at the same level as any international debt services.
- Interdependence and social cohesion in Africa should be a fundamental objective of CfA and independent public-private team of experts should be in a position to measure progress made after each fiscal year.
This could happen with ownerships and commitments if a conference between Non-state actors and Government officials from both western and Sub-Saharan countries takes place to clarify the implementation strategy focused on concrete “new deals” and contracts. Failing to do so, one should not be surprised in a very near future that the structural scar created in Africa becomes even more visible with its costly consequences on security and peace.
Dr. Yves Ekoué Amaïzo
Author and Strategic Economist at UNIDO
(The paper is prepared in his personal capacity)
1. General George C. Marshall, Secretary Of State, “Address At Harvard University <http://www.loc.gov/exhibits/marshall/m9.html>,” June 5, 1947. For European Recovery: The Fiftieth Anniversary of the Marshall Plan <http://www.loc.gov/exhibits/marshall/marsintr.html>: On June 19, 1947, representatives of 22 European nations met at the invitation of the British and French foreign ministers to participate in the design of a plan for rebuilding war-torn Europe. In a Harvard University <http://lcweb2.loc.gov/ammem/today/sep14.html> commencement address <http://www.loc.gov/exhibits/marshall/mars1.html> two weeks earlier, U.S. Secretary of State George C. Marshall had called for a massive European aid package designed to stabilize the world economy and discourage the spread of communism. Over 12.4 billion dollars were transferred to Western Europe under the Economic Recovery Program known as the “Marshall Plan.” Not completely altruistic, the legislation < http://www.archives.gov/exhibit_hall/featured_documents/marshall_plan/index.html > creating the plan specified aid dollars be spent in the U.S. < http://www.loc.gov/exhibits/marshall/mars11.html > Nearly every Western European nation participated in the recovery effort. Although inflation proved a serious side effect of the program, within two years many countries had reached or exceeded pre-war levels of agricultural and industrial production. By encouraging European economic integration, the Marshall Plan fostered the creation of the European Economic Community of the 1950s–the precursor to today’s European Union. See http://lcweb2.loc.gov/ammem/today/jun19.html
2. The Brandt report properly entitled “North-South: A Programme For Survival”. It was presented to the Secretary General of the United Nations in February 1980 and was published in March 1980. There have been criticisms of the proposals in the Brandt Report that it is not innovatory and not radically new in many of its recommendations.
3. Southern African Development Community
4. Economic Community of West African States
5. Source: Wikipedia
6. Anver Versi, “Gordon Brown’s Africa Recovery Plan: Live now, pay later”, in African Business, n. 306, February 2005, pp. 14-20.
7. UNIDO, Africa Productive Capacity Initiative: From Vision to Action. Main Report, 16th CAMI Meeting, Vienna, 28 November 2003; see http://www.unido.org/file-storage/download/?file_id=25984
8. WTO, International trade statistics, 2004, p. 76.
9. UNIDO, International Yearbook of Industrial Statistics, 2005, p. 34.
10. Yves Ekoué Amaïzo, From dependency to interdependency. Globalisation and marginalization. A chance for Africa? Publisher by L’Harmattan, Paris, 1998, 432 pages, available only in French.
11. WTO, Annual Report 2003, p. 32.
12. World Bank, Global Development Finance 2004, pp. 6 and 26.
13. The Economist, “Erasing the scar”: Toni Blair’s Commission for Africa, March 12th -18th 2005, p. 77.
Best article of the month in African Business avril 2005:
Magazine article by Yves Ekoue Amaizo; African Business, No. 308, April 2005. Voir pour info http://www.questia.com/PM.qst?a=o&d=5009356616 ou http://www.highbeam.com/doc/1G1-131814087.html