Africa’s past is not its future
dards that affect everything from fighting corruption to financing development to mitigating the effects of climate change. Debates and decisions on these and other issues would be fairer and more efficient if the G-7 and G-20 didn’t simply dictate to Africa but treated it as an equal partner.
Africans have been asking for more cooperation from the West as they seek to battle corruption. After all, funds stolen from the continent nearly always end up in Western banks. North American and European countries need to establish public registries that identify those who own or benefit from secretive, anonymous companies. Yet they have resisted doing so, despite regularly haranguing Africans about corruption. Now, Western countries are getting a small taste of their own medicine as they struggle to trace the assets of Russian oligarchs.
Hereward Holland / Reuters
Illicit financial flows out of Africa, mispricing of exports and imports, and the shifting of profits within multinational companies cost African countries more than $88 billion every year between 2008 and 2017, according to one estimate by the United Nations. That exceeds the $52 billion in annual international aid the continent received during those years, raising the question of who was funding whom. Western countries must act swiftly to close the tax and banking loopholes that are bleeding the African continent dry.
The West should also take Africa’s financing needs more seriously. African countries struggle to borrow in international financial markets to fund their development needs or deal with crises such as the COVID-19 pandemic, climate change, and food insecurity. Countries that manage to borrow must pay punitive interest rates, reaching as high as ten percent. It is little wonder that the rich are getting richer and the poor are getting poorer, even as Western officials lecture Africans about inequality.
International credit-rating agencies should ask themselves whether their assessments are driven by prejudice or reality. Often, when they rate African economies as subinvestment grade, thereby depriving them of much-needed financing or forcing them to borrow at ruinous rates, they actually engineer the failures they predict. As the economist Jeffrey Sachs recently pointed out, Ghana’s debt-to-gdp ratio of 83.5 percent is lower than Greece’s (206.7 percent) and Portugal’s (130.8 percent). Yet Moody’s rated Ghana several notches below both European countries in 2021, leading creditors to overestimate the risk of lending to Ghana’s government and to charge an interest rate of nine percent on ten-year bonds. Greece and Portugal, meanwhile, paid just 1.3 percent and 0.4 percent, respectively. The result was predictable: in its 2021 review of Ghana’s debt sustainability, the IMF warned that the country was at high risk of debt distress and vulnerable to shocks, and in August 2022, Fitch downgraded the country’s credit rating to CCC, indicating “substantial risks.”
Finally, Western countries should take full responsibility for their contribution to the climate crisis and stop asking African nations to sacrifice their development goals to fix a problem they didn’t create. North Americans still generate 14 tons of carbon emissions per person every year, on average, while Europeans and Chinese generate seven tons. Africans, by contrast, emit just 1.1 tons. And yet Western countries still resist the obvious solution: putting a price on emissions and letting the market forces they worship play their role. Instead, they focus on reaching carbon neutrality through “energy sobriety” or encouraging people to change their lifestyles and behaviors to reduce emissions. This is a reasonable approach for developed countries that are high emitters, but it makes no sense for low emitters whose populations still lack basic access to energy.
ONE AFRICA
For Africa to live up to its potential, its leaders and citizens must address their own challenges and shortcomings. First and foremost, Africa must speed up its economic integration. Yes, the continent’s arbitrary division into 54 countries is unhelpful. But it is irreversible, so the best and only way forward is to deepen the economic and political links between them. The African Union has done much to knit the continent closer together. For one thing, the continental free trade agreement the union brokered in 2018 promises to reduce barriers to trade and perhaps one day create the largest free trade area in the world. But this monumental commitment has yet to be fully and effectively implemented.
For years, I have asked Africans a simple question: If China, whose population is only slightly larger than that of Africa, had been divided into 54 countries with different regulations and currencies, could it have developed into the superpower it is today? For markets, size matters, so Africans must buy from and sell to each other. That is the only way to develop the continent’s economy and attract foreign capital. African countries should come together to establish a panafrican stock exchange, which would encourage investment and improve African companies’ access to finance.
Greater integration and market size will spur the development of African industries, including those producing pharmaceuticals and vaccines. The lessons of the COVID-19 pandemic are clear. In emergencies, countries rediscover nationalism, erect trade barriers, and seek to put their own people first. African countries still import almost 95 percent of the medicinal and pharmaceutical goods they consume—and 99 percent of the routine vaccines. In times of global crisis, they cannot depend on the kindness of others to ensure that their people will remain healthy and secure.
In that sense, the pandemic has been useful. In April 2021, the African Union and the African Center for Disease Control set a goal of producing 60 percent of the vaccines the continent will need by 2040. With the help of the European Union, Africa is now working to establish or strengthen six manufacturing hubs on the continent—in Egypt, Ghana, Morocco, Rwanda, Senegal, and South Africa. Assuming African governments are willing to make the necessary investments, including in public health, these initiatives will improve the continent’s health security and potentially create jobs.
Africa is still treated as a basket case.
Similar efforts to become more self-reliant are needed in the realm of food security, as evidenced by the disruptions to crucial grain and fertilizer exports to Africa caused by the war in Ukraine. For too long, Africa has disregarded its agricultural sector, allowing its crop yields to fall far below the global average. This in some ways is good news because it means there is enormous potential for improvement. Africa still has more arable land than the rest of the world combined, which is also good news. But the continent must reexamine its agricultural model, still mostly based on subsistence farming. African governments should prioritize production systems that benefit their own people first. Exports should continue, of course, but in a way that does not jeopardize food security.
African states must move up the value chain in agriculture and in other industries such as mining. Otherwise, they will continue to earn relatively low fees for raw materials while other countries reap much larger rewards from exporting final products sold at prices many Africans cannot afford. It is unacceptable that an African farmer receives a few cents for the cocoa used to make a chocolate bar that sells for $4 in the West.
Then there is the need for power. Some 600 million people in Africa continue to live without access to electricity. Without power, forget about development, education, and health. It has not helped that some wellmeaning countries and development finance institutions have pushed to end funding for oil and gas projects in Africa and elsewhere. None of them seem to have thought of the millions of African women and children who have gotten sick or died from breathing fumes from unclean cooking fuels. Western countries are now scrambling for access to African gas to offset the loss of access to Russian gas, but many still don’t want Africans to develop such resources for their own use.
Africa is already doing well when it comes to green energy. Twenty-two African countries currently rely on renewables such as hydropower and geothermal as their main source of electricity. But renewables alone cannot meet the enormous and growing need for energy across Africa. To bridge that gap, while of course speeding up the development of renewable energy, Africa must be able to tap its natural gas endowments. This will require African governments and their partners to commit resources to upgrade and scale up gas storage, transportation, and distribution. Without such investment, Africa will not be able to reach the UN’S Sustainable Development Goals or the African Union’s Agenda 2063 development goals.
Last but not least, demographics. Africans love to brag about their youthful population and the many advantages it confers, including a strong labor force, a growing market, dynamism, and an innovative spirit. But the socalled demographic dividend is a double-edged sword, paying off only if young people are educated and trained to succeed in the twenty-first-century economy. Unemployment among African youth is high and rising, which poses a risk to the stability of African countries and other countries as well. Unemployed youth who have lost hope often opt to migrate illegally and sometimes join criminal or terrorist groups. African governments must create an environment for them to succeed on their own continent, expanding access to power, building needed infrastructure, and strengthening governance and the rule of law. But they must also improve access to family planning and make it less taboo. If population growth outpaces economic growth, as it does in many African countries, our people will continue to move backward instead of forward.
A WAY UP?
To meet all these challenges, Africa needs better governance and better elected leaders. We Africans need to stop complaining about a past we can do nothing to change and start focusing on the future we can own. We need to look forward, work on our development, and rely on ourselves. Only we are responsible for our future and that of our children.
We hope that Western countries will also improve their governance, be more honest and inclusive in their dealings with Africa, and appreciate the depth of mistrust their past misbehavior and current hypocrisy has created. There are promising signs that both sides are starting to talk to each other rather than past each other. In February, Senegalese President Macky Sall, chair of the African Union; French President Emmanuel Macron, chair of the European Union; and European Council President Charles Michel hosted the sixth European Union–african Union summit in Brussels. Instead of the endless speeches by heads of state that so often eat up all the available time at international summits, this meeting featured a series of substantive and interactive roundtables focused on vital, often contentious issues such as security, health, finance, migration, and agriculture. Both the African and the European leaders committed to equal partnership and better governance. Let us hope both sides implement these commitments so that one day we can look back on this sixth summit as a new beginning.