Growing African economies that will work for African people

African market
Women at an African market

Tanzania just announced that it will dump English as its official language in schools, opting for Kiswahili instead. This morning, I read this article that somehow appears to suggest that this is a bad idea.

I must say I disagree, and below I’ll try to explain why.

When the colonial powers came to Africa, one of the first things they did was to impose their own languages as the language of learning in their territories. France imposed French in the various west African territories it colonised, Portugal imposed Portuguese, Holland imposed Dutch and Britain imposed English and so on. This had the effect of dividing communities which were otherwise related. The overall effect was to stop any hope of large countries the size of the Democratic Republic of Congo from ever emerging out of Africa. It was divide and rule of the purest form. Fragmentation – a cruel tactic designed to tie the future of those then colonies forever to the colonial powers.

So the english taught was not necessarily to be a conduit of knowledge transfer that would empower the colonies as some people would have you believe. Instead, it was a move to make sure that schools produced compliant subjects which could easily be manipulated, and do the bidding of the colonial masters in Europe.

And that is reason enough in my view for Tanzania to change the official language to Kiswahili, because the motive of colonised Tanzania having to communicate in foreign languages was entirely driven by foreign interests.

Secondly, groups of people often associate and define themselves as an ethnicity on various terms, but one of the most common denominators, other than ancestry is language. You identify as Chewa because your parents are Chewa and they spoke Chichewa, they lived in the land of the Chewa, their village was in the Chewa belt. Therefore you are Chewa.

This is the norm, not the exception.

So as Tanzanians, the question which the above article answers is that Kiswahili is a unifying force in Tanzania. It holds together the people, even though they are made up of 130 different ethnicities.

So why then should they conduct their lives based on an imported language when they have a language of their own?

Who’s interests does having English as an official language of education ultimately serve?

Why teach in English when students could learn in their own African language? Are people not proud of being African?

If the US, Britain or Spain is unlikely to begin teaching their students in Nyanja or Kiswahili which are African languages, why is it somewhat acceptable or expected for Africans to teach their students in foreign languages?!?

In any case, shouldn’t Tanzania develop an economy that first and foremost works for Tanzanians (if you can allow me to temporarily step out of my usual Pan-African shoes), people who are citizens of a sovereign country?

In the above article, the author quotes Ahmed Salim, a senior Associate at Teneo Intelligence, a political risk consultancy that works with U.S investors, who makes what I consider to be a hopelessly narrow-minded point:

However, in terms of overall impact, the main challenge will be felt long-term when companies set up shop in Tanzania and are left with hiring staff that are either bilingual Tanzanians or from neighboring Kenya or Uganda. This will somewhat hinder Tanzania’s competitive advantage in the future.”

Now, I’m not saying they should stop teaching English altogether, or that English isn’t an important international language. That’s not what I’m saying. Instead the argument for English is tied to this over-emphasis on foreign investment (money coming from the outside of Africa) to help and rescue Africans, to give them jobs and create an economy – as if Africans themselves couldn’t use their own resources to create economies that work for the benefit of African countries.

Tanzania has many natural resources including natural gas (See the following links Tanzania’s Natural Gas Reserves Almost Triple on New Finds ; Statoil makes another natural gas find offshore Tanzania ;  BG Group touts Pweza as its largest Tanzania gas find ). The country’s economy is growing at a rate of 7% which is quite high and above the international average. If those resources are utilised properly by the government of Tanzania for the benefit of the country’s citizens (as opposed to liberally auctioned-off to the highest corporate bidder) they could be a source of some serious economic development that would create jobs for young Tanzanians, investment into security, and used for infrastructure development, investment in Education, Healthcare and women’s issues.

That investment, derived from wholly Tanzanian owned resources, could be a serious game changer if utilised wisely.

But if some corporation is allowed to own a majority stake, or lions share of Tanzania’s Natural Gas resources, I can tell you now what difference it will make to the Tanzanian economy in the long run:

NONE.

The profits that corporation makes will be wired out of Tanzania to already developed and rich countries. Countries that needs the benefit of the resource much less, and that have billions in cash reserves to fall back on. And those profits will find their way into the fat pockets of already rich shareholders in those rich countries. Ultimately such funds will trickle down to contribute to the tax system of those already rich countries, benefitting their economies.

Meanwhile, poor Tanzanians already struggling with poverty, low incomes, unemployment, high cost of living, government corruption, who do not own property, poor healthcare in hospitals and the lack of medicines, no electricity in most areas, deforestation, poaching and lack of clean water in the villages will not have benefitted proportionately from such natural gas deals. Instead they will have to continue receiving handouts, breadcrumbs from aid organisations – when their country possesses the natural resources that could be used to create wealth for them…all just because of greed of some corporations

How absurd and stupid is that?

So the scare mongering self-serving attitude against Tanzania choosing to teach their students in Kiswahili is wrong, It’s anti-African and I vehemently disagree with such dishonest views.

Africans and other developing countries have been stamped on for too long. We must end this corporate driven theft and madness and begin to create economies which are designed to serve and benefit us as Africans, just as others have been building economies to benefit their own economies, and their own people.

Wholesale Plunder – how international Mining companies continue to steal from Malawi

Malawi could be losing about $15 billion in revenue every year due to dubious mining operations by exporters of precious stones. According to a report from the Malawi Miners Task Force (MTF), shipments of gemstones, especially Nyala ruby of exceptional quality, are regularly being illegally  exported and smuggled out of the country. More here via Nyasa Times

So, while you work hard and wonder what is happening to your beloved country, there’s wholesale plunder of it’s resources by the very same people who you considered the usual suspects.

And if you look around your new / adopted surrounding, you see your country’s citizens ( be it in the US, in Britain or in South Africa) toiling, suffering, discriminated against left right and centre, as the societies they live in sugar coat their suffering, and generally use the media to ensure their suffering is invisible, I see Malawians being real victims of the system almost everyday, victims of abuse, working in terrible underpaid jobs, being on the receiving end of verbal abuse, mistreament by employers, or work colleagues, victims of extortion by public bodies… while back home in Malawi – a country from which they left in pursuit of better pastures, an unholy alliance of unhinged businessmen (driven by greed and aided by spineless clueless ignorant politicians – the same politicians the West continue to support), the Chinese (who were said to have recently sent 40 tonnes of rare earth mineral niobium to China as a “bulk sample”), and international organisations advocating free market policies, plunder the country’s wealth…oh, great, that’s just great.

But wait a minute… What is being done by the authorities in Malawi about what is clearly an illegal activity? I know there is an election in a few months, and people have to campaign, but what are the authorities doing to curtail or prevent this behaviour? Further, what is being done by the authorities in the US who no doubt have identified the fraud? Will anyone be prosecuted? Has an investigation been opened? Will the practise be stopped?

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Another reason why Africans should own their own resources

man-40134_640Last week a well written article appeared on Al Jazeera arguing against the false and somewhat misleading picture of Corruption that is often put out by the western media. In it, it was suggested that over $900 billion a year is lost from developing to developed nations through tax evasion and illicit financial outflows. While this is a major problem for Africa, as was pointed out several years ago by Kofi Annan here, another reason which results in these outflows is that very few major industry (million dollar revenue generating) in Africa is in fact owned by Africans.

The combination of imperialist colonial legacies, poverty, a lack of capital, insufficient education, corruption, plain hypocrisy and other factors has resulted in a state of affairs whereby even capable Africans find it hard to buy into and run their continent’s biggest industries. While there are many Africans doing well in business throughout Africa, they are by far in the minority, and comparatively too few of them on the ground, than say the number of Canadians who own and control multi-million pound ventures within Canada, or say the number of Portuguese who own and control multi-million dollar companies in Portugal.

Thus, this picture inevitably creates an opportunity or gap for foreign corporations and investors to come in, and sweep away ownership of the whole lot – armed with huge amounts of capital. No surprise the profits end up everywhere else but in Africa…

In my view, far from the land grabs of Robert Mugabe (which others have tried to justify – see here and here), another reason in support of more Africans owning their continent’s industry is that doing so could mean that large amounts of money remain on the continent, to be used for education, health  -building hospitals and providing good wages for doctors, eliminating poverty, fighting corruption, policing and security, building infrustracture, improving the plight of women, investment in the youth, creating jobs, etc. It means essential capital is not being wired out to already rich countries. This in my view is a better strategy against poverty, than aid and handouts, whose monies are comparatively miniscule to the monies being siphoned from Africa.

According to the website of Britannia Mining Inc (a US company with operations in Canada and Malawi) here, the Nthale Iron Ore surface deposits which they found before 2009 are estimated from their geological survey to be at least 4.6 million tonnes in quantity. As often happens with these things, especially if we focus on the word ‘Surface’,in practice the deposits can be far larger than the estimate.

Last Friday, on the 7th of February 2014, before close of trading the price of Iron Ore on the international market was hovering around $125 per ton (see latest figures here). Whichever way this price goes (whether up or down) the next few years, 4.6 million tonnes at $125 per ton is still worth at least $575 million, a hefty sum by any measure. Even if we go with the 68% iron ore component indicated on their website, that’s still worth $391 million

Suppose Britannia Mining invested $100 million into Malawi, to cover processing the Ore, overheads including construction, logistics, wages, corporate governance activities, etc, (and it was proved that they had indeed invested such sums because sometimes businessmen overestimate the level of investment when the truth is much lower) I’d think the benefit to the Britannia would be significantly higher and disproportionately in their favour than in the favour of Malawians. Looking at previous examples of resource conflicts involving corporations in Africa, I seriously doubt that first they would invest such sums. Further, I doubt that Malawians or the Malawian government would benefit equally or at least proportionally from the resource. Which begs the question, who actually owns the resource?

As many others have opined elsewhere (see this for example), the unrestrained greed and unguarded capitalism of western businesses in Africa is causing a lot of damage and harm to Africa, and Africans. And that’s even before we get to what China is doing…

Even if the market price of Iron Ore dropped to say below $100, (say it dropped to $65, which is highly unlikely – the last time it hit $100/ ton was back in Aug 2012, and that was only for a very brief period of time), there would still be at least $300 million worth of deposits to be mined.

Don’t you think if the company that was exploiting the deposit was owned or part-owned (say 50%) by the Malawian government, or a group of Malawians, that the majority of the benefit of the resource would remain in the country, as opposed to being wired out of Malawi?

Post Paladin, and the tax outrage they caused when it was revealed that the Malawian tax authorities were missing out on tax revenues worth $200 million, how much tax have Britannia paid to the Malawian government so far, and how much have they made out of Nthale? The reason that question is crucial is because no level-headed Malawian is keen to see Malawi descend into a chaotic easy target where rich corporations (which are already wealthy and well resourced) come into the country and make billions, while the local population remains poor.

And if governments across the world do not speak against unrestrained greed, who will, seeing most governments in Africa are headed by people who have neither the will nor inclination to do so…?

Kenyatta + Branson
image from https://www.facebook.com/myuhurukenyatta

In my view, Africa needs trade partners who will help rebuild the continent, and not those looking for a quick buck, irrespective of the ethics of the means of acquiring that buck.

If you are looking to make money quick, stay away from Malawi. We don’t want get rich quick capitalists or investors. What Malawi needs are Responsible Capitalists, as opposed to a Liberal and unguarded Capitalists – a badge which brings to mind Halliburton’s Iraq heist (or even ILLOVO’s tax avoidance fiasco –  ILLOVO [which is British owned via Associated Foods Limited] is  company that last year posted a 43% rise in profits per share), an incident which it is fair to say has probably been responsible for not only much suffering, but also global unrest.

Depending on who you ask, its undeniable that corporate wrongdoing is currently happening, and the continent of Africa is being systematically ripped off. Yet there has to come a time when the tide turns, and the wrongdoing is forced to stop (sadly it’s not going to stop voluntarily). In the words of the African Development Bank president Donald Kaberuka here:

“The reality is, Africa is being ripped off big time …Africa wants to grow itself out of poverty through trade and investment – part of doing so is to ensure there is transparency and sound governance in the natural resources sector”

In my view this means rectification, and possibly includes learning lessons from those whose policies do not exacerbate the already bad situation; lessons from the likes of Brazil instead of blindly accepting unfair and discriminatory terms from organisations such as the IMF – whose policies towards the poor countries couldn’t be said to be favourable for local ownership of industry.

Maybe Malawi’s mining sector has more to learn from the likes of Vale and Debswana. Debswana is 50% owned by the Botswana government and 50% owned by De Beers. Vale is the world’s biggest producer of Iron Ore, and their profits recently doubled (Interestingly, in the same article Vale says the price of Iron Ore would hit $130 per ton, which it did, confirming the plausibility of my above little theory). They’ve seen an increase in production, which last year hit 73.4 million tonnes of Iron Ore. They are also a major tax contributor to the Brazilian government, with recent tax payments of $9.6 billion, far greater than anything any corporation have had to pay to an African government.

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14 African Countries Forced by France to Pay Colonial Tax

Its anybody’s guess how true some of the allegations in the link below are, but probably not something to read on a Saturday morning 😐 .

What is clear is that Western Countries like France have had a huge and unfair economic advantage over non-western countries, and some of their policies (which are precisely the policies which gave them that unfair economic advantage) towards former colonies were clearly and undeniably oppressive.

The reason I don’t buy the BS which goes something like:”Stop moaning, others like South Korea have moved on from the colonial bashing….and are now prosperous” is that unlike any of the African countries, South Korea got a huge grant of at least $3 billion dollars (others researchers say it was tens of billions of dollars: http://citation.allacademic.com/meta/p_mla_apa_research_citation/1/1/3/6/7/p113675_index.html ) between 1965 -73 to build up its economy.

So South Korea was given huge amounts of money to build its economy. It didn’t just happen accidentally. It is an ignorant fallacy to claim that with the problems facing African countries can just be transformed using aid, diplomacy or education.

I think, considering that western politicians have failed miserably to use aid to solve Africa’s major problems the last 60 years (not that it was their call to do so – but their predecessors were part of the problem that created unquantifiable damage to Africa), in so far as sustainability is concerned, so as to remedy Africa’s problems, it is most probably time for educated African entrepreneurs (not Politicians) to be given ‘reparatory grants’ to rebuild their countries’ economies. Anything short of massive and reparatory investment into Africa is unlikely to create sustainable economies where the Africans themselves are in charge, and in control of their countries economies. After years of study, observation and obsessive inquiry, I’m convinced this (or a derivative form thereof) has to be part of the equation to rectifying the troubles in Africa.

14 African Countries Forced by France to Pay Colonial Tax via Systemic Capital.com

Africans Need to Stop Listening to the Colonial Voices in their Heads

africa-11115_640“..Under colonialism, Africans were trained in submissiveness through the butt of a gun, and although their colonial masters mostly left by the 1960s, succeeding generations have continued to hear and obey their ghostly commanding voices. Those voices may no longer be overt but covert, and no longer bolstered by physical force but emotional, ideological and economic sway, but they still persist…” – Chika Ezeanya, Africans Need to Stop Listening to the Colonial Voices in their Heads.

In Africa’s parliaments, presidential palaces and boardrooms, Africans continue to obey the commands of other peoples, nations and continents telling them what to do.

The continent seems compelled by the will and wish of others to act out of tune with what is expected of it. The World Bank and International Monetary Fund (IMF), oftentimes poorly informed about the continent’s realities, draft ill-fitting economic policies, which African governments implement as is. European countries, especially the former colonial powers, maintain a grip over the economic situation of their former colonies. China arrived in Africa with a bang and has so far built a ‘befitting’ headquarters for the African Union in Addis Ababa and several presidential palaces for African presidents in exchange for privileged access to the continent’s natural resources and manufactured goods markets.

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