Economic waste, the tale of African economies
Africa is indisputably the world’s richest continent in terms of mineral and natural deposits. A continent representing over 20% of the world’s arable lands, fertile for all kinds of agricultural produce. A continent contributing over 50% of the world’s deposit of mineral resources such as diamond in South Africa, Gold in Ghana, Crude Oil in Nigeria, 90% of Columbia Tantalize (Cobalt) tin ore, fortunately 40% of world’s hydroelectric power, unspeakable amount of tanzanite, Uranium, with a whether which can sustain and support farming all year round.
Despite the high level of intelligent and innovative personnel from around the continent. Africa has continued to lag behind in the comity of nations, earning all kinds of names such as the dark continent of the world, the white man’s grave yard etc. African economies have been begging for assistance from other continent centuries past with no end in sight, not because they lack the resources but simply because they lack that financial aptitude and discipline to handle and develop an inclusive, progressive and egalitarian economy built on sustainable economic blueprint.
One will not therefore fail to ask what has been the problem of Africa. How can Tanzania owning 99.9% deposit of the world’s Tanzanite lacks the technology to process it, Tanzanite is a relatively rare and costly mineral discovered in 1967 and is named for its country of origin, a resource used as a rare jewelry material exported raw from the Country of origin to other countries where it will be processed and sold at a very high price. West Africa collectively supplies two thirds of the world’s cocoa crop, with Ivory Coast leading production at 1.65 million tonnes, and nearby Ghana, Nigeria, Cameroon and Togo producing additional 1.55 million tonnes. Ivory Coast overtook Ghana as the world’s leading producer of cocoa beans since 1978, but if you look at the beverage industry they earn the least from that industry.
Nigeria is Africa’s biggest oil producer and the 13th largest producer of oil in the world with daily production reaching about 2.4 million barrels. Nigeria also has the second largest proven oil reserves in Africa and the 10th largest in the world but sadly Nigeria imports refined crude oil in millions daily. The country lacks a functional refinery, this ugly satire has seen the country not benefiting from or saving enough during the oil booms. Unemployment and underemployment has been on an alarming rise, while inflation has been heading to the east. The value of the local currency has been on a free fall and today the government wishes to borrow $30 Billion to fund deteriorating infrastructures, for which specifics are being awaited.
Botswana, the Democratic Republic of Congo (DRC) and Namibia are Africa countries producing large value and volume of diamond but have remained under-developed with poverty level at an abysmal and dreadful rate. With very little value addition, these countries like their Nigerian counterpart have not been able to take any comparative advantage of this rare resource that is sought after in the international market to better the lots of her citizen, the manufacturing sector, energy and absence of pipe borne water have been economic challenges to these countries.
The question is what has been the cause of Africa’s continued under development? Should we apportion it to the colonization of Africa, no I do not think so, America was at one point colonized by Britain today they are greater than even their colonial master. Overtaking them as the world’s largest economy 150 years ago. India, Singapore, Malaysia, Turkey, Brazil and so many other countries respected today were at one point in their history colonized, but the difference is that these countries have decided to shake off their colonial experience and today are forces to reckon with.
It is believed that the continent of Africa has lost over $1.4 trillion from 1980 to 2010 to financial mismanagement and waste. Economic waste has been the major cause of Africa’s under-development; it has nothing to do with color, climate, natural resources, human capital and religion. These are factors that have had contrasting realities when placed side by side with other nations.
The Continent of Africa has been raped repeatedly by her finance managers for a very long time and she is critically bleeding. Lack of strong institutions in Africa and failure of leadership has done more harm than good to the continent.
Capital projects just like any other projects requires a holistic review, with emphasis on sustainability, probity, cost benefit analysis and social desirability, most economies of Africa cannot boost of state of the art infrastructural amenities that can support development. Energy supply has been a problem but when viewed with the number of abandoned projects in other sectors in most African countries and the enormous resources already committed that cannot be retrieved or reinvested in any other venture. It is believed that three quarter of Africa’s infrastructure is either stalled or abandoned. This is high for a continent that lacks basic infrastructure like roads, electricity, irrigation, pipe borne water, rail way etc.
Cost of corruption to African economies is colossal. The African Union has estimated that during the 1990s corruption were costing African economies about $148 billion per year, or about 25 percent of Africa’s total output. This is very gigantic and has accounted for the continent’s continued lag in comity of nations. Corruption is an ill wind that brings no one any good except the economies that receive and warehouse such stolen funds and utilize it for their own benefit leaving the masses in Africa to wallow in abject and derisive poverty, dying of the least treatable disease with little access to decent health care, lack of quality education system.
It is therefore evident that if the economic managers in Africa could be more prudent in the way the finances of the continent is utilized for the development of the continent, the Africa rising project will be greatly actualized. Peer review mechanism should be properly harnessed to tap into and collaborate to develop the continent. The sit tight syndrome of certain political office holders in many African countries should be discouraged as this will usher in a new set of visionary and utopian leaders to chart the course of the continent. It is believed that innovation is brought by new individuals with new ideas making a difference in old problems (Daron and James Robinson). The West and North African countries should learn from the emerging Central and East Africa. We are seeing a new wave of economic advancement in Rwanda, Mozambique, Ethiopia, Democratic Republic of Congo and Tanzania. If this momentum should continue very soon this region will advance far more than the rest. Major reforms that will be more inclusive and proactive adoption of innovation and information technology will help the continent to progress speedily.
Princewill wrote this piece from Lagos