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8/19/2010

Reflection point: Insight on Africa 2

Is it fair to say that any donor government or organization that intends to continue giving aid to Africa in the next 10 to 20 years is not interested to see it develop?

I know Africa will not develop overnight (in 10 to 20 years) but if any organization wants to continue giving aid to Africa indefinitely, I am afraid I will have to question its intentions. For how long has Africa been receiving financial aid? 10, 20, 30 or 50 years? My guess is 60. Back then, the idea and intent was good because it was expected that aid will help lift millions of people out of poverty. However, the aid approach to development had not been tested (as Moyo argues in Dead Aid, Marshall Plan is quite a different thing and shouldn't be compared to Africa). But after 50 years, the same approach, the same aid culture has failed to deliver. Is it not time for a new approach? 

When the West stops treating as Africa as a child that never grows up, a retard, an adult child-that never gets out of his parents' bosom, and starts treating Africa as a trading partner, a grown up able to salvage his way through life, then Africa will rise up to the challenge and take on the responsibility of achieving sustainable growth and long term development. But until that day comes, Africa, especially its leaders will continue to take advantage of Western aid. Mobuto, (former president of Zaire, present day DR Congo) before leaving office had amassed wealth of over 5 billion dollars, same for Sani Abacha of Nigeria, Hophouet Boigny of Ivory Coast. Wait until people like Mugabe, Biya, Ghadaffi, leave power and see now much money they would've embezzled. No it's not a false accusation!

Africa's problem doesn't stem from aid alone. Of course the system is corrupt (and aid fosters corruption, Moyo contends), dysfunctional and lacks credible infrastructure. Worst is the fact that we, a poor continent with cheap labor do not attract foreign companies and FDI. Why? The problem is in many folds, and as I argued in the first part of my fb post, Education can and is a solution. 

Problem #1. Even though we have cheap labor, the cheapest on the planet, there is only a small percentage that is qualified. Microsoft, Google, and other big multinationals outsource jobs to India, Bangalore. Why? Because the Indians don't only have cheaper labor than the US. They have a highly skilled and competent work force trained by the Indian Institute of Technology (IIT). So if we want companies to come to Africa, we need to train a workforce that is competent and ready to compete.

Problem #2. Even if we had cheap labor plus the skills, companies will still look unto China, India, Singapore, Honkong, etc instead of Africa because they have a more flexible system that is easier to navigate. In Africa, bureaucracy, red-tape, unfavorable business practices, the legal system, etc create a hostile business environment and scare away would-be entrepreneurs and investors. Why go to Africa to start up a business when it takes more than a year to get the paper work done meanwhile the same business can be started in Singapore in less than three weeks? In this "small" world, if we (Africa) must succeed, if we must develop, we need to reduce these barriers to trade and create a dynamic and open system where entrepreneurship, innovation and creativity are encouraged and even rewarded.

Another problem we face is lack of infrastructure. Roads, bridges, buildings, uninterrupted power supply, I know, are hugely ambitious and daunting projects but if we must stand up and take our future from the IMF, the World Bank, celebrities and other African sympathizers into our hands, then there's no other option. China did it in less than a quarter century; we can do it by 2035. All we need is some ambition, visionaries, agents of change, a good workforce. And we can produce all these through education after all India did it through the IIT. 

The relevance of education to our development: World economy shifted from being a commodity based economy to service based economy. Today it has moved from a service based economy to an idea based economy. What makes people rich today is not oil, or rubber or cocoa or timber. It is thinking, creativity, new ideas, innovation, etc. People like Rockefeller and Carnegie made money through oil and they were the richest men in their epoch when world economy was mainly based on commodities. But today, in an idea based economy, names like Bill Gates, Warren Buffet, Sergey Brin, etc come to mind. These innovators did not sell oil or cocoa or timber as we do in Africa. They conceived ideas, transformed these ideas into products and/or services and marketed them - so, they got rich and contributed to the economies of their country. If Africa dreams that she will rely solely on her natural resources to get rich, I am sorry she will get poorer - Dutch Disease, resource-curse are all forces that plunder resource rich countries. Sierra Leone, Liberia, DR Congo, etc come to mind. So what about Middle East? you ask. The case for the Middle East is different and I don't want to go into that now. What will drive this ingenuity for us Africans and create new ideas? The answer is Education.

There are hundreds of thousands of children, perhaps millions sitting in forgotten corners of Africa, in refugee camps or roaming the streets who if given the opportunity may become the next Steve Jobs, or Mo Ibrahim or K'Naan. All we need to unlock this untapped potential is education, education education!!! So if you are passionate about Africa and want to help, invest in a child's education.

If you are interested to read more, I suggest the following books. Dead Aid by Dambisa Moyo, The World is Flat, By Thomas Friedman, The post-American World, By Fareed Zakaria, The End of Poverty, by Jeffery Sachs, etc. I draw most of my arguments from their thought and ideas.

Don't forget about the question at the start of this essay.

Blaise Buma.

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