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The Independent Institute
Commentary

Globalization Rocks, but African Leaders Fail to Understand It


Tanzanian President Benjamin Mkapa will step down this week, complying with his constitutional term limits. He will be the third African leader in recent times to honorably leave office following the departure of Nelson Mandela of South Africa and Jerry Rawlings of my country, Ghana.

At the same time that Mkapa hands over power as required by the law, he is urging his colleagues to discard the political system and warning other African leaders to be wary of the present competitive global political and economic order because globalization threatens to “exploit, denigrate, and humiliate Africa.” But one might ask whether Africa’s problems are really caused by globalization.

This message particularly smacks of a return to the pre-independence rhetoric that made the creation of political kingdoms a greater priority than development and fed the overwhelming urge of many leaders to remain in power long after the colonialists were gone. No wonder President Yoweri Museveni of Uganda has cunningly severed all ties with his country’s constitution since he managed to give himself a de facto third term.

These ideas are as dangerous today as ever. At a time when the continent strives to liberate itself from the expansive powers of postcolonial governments and the politicization of society brought about by them, the real need of the day is economic freedom. Alas, the economic situation is so bad in so many African countries that young men are fleeing their own governments, trekking through the vast and dangerous Sahara desert and struggling over heavily guarded barbed wires to look for better opportunities in Europe. Unfortunately, many die on this pilgrimage of freedom.

African countries greatly increased exports to the U.S. in 2004, generating revenues of over $26 billion in that year. Jeans made in Lesotho are sold in U.S. stores. Flowers from Kenya and vegetables from Senegal are regularly available in European shops. The use of mobile phones and the Internet is growing faster in Africa than anywhere else in the world, according to the United Nations.

Globalization can hardly be blamed for the fact that only 10 percent of Africa’s trade takes place among African countries themselves. With 750 million people living on the continent, the potential for the expansion of trade must be enormous. Very little trade has been allowed in this poorest of continents where tariffs are almost as high as 50 percent and where highway robbers dressed as customs officials block free exchange.

What is it that motivates Nigeria, which calls itself the giant of Africa, to ban the importation of ninety-six different products from Ghana when both countries have duty-free and quota-free access to the U.S. markets for 6,500 of their products? So what sort of globalization does Benjamin Mkapa want Africans to be wary of?

But the West is also guilty here as there is little incentive to encourage trade because foreign aid is piled on the leaders who make these economic policies.

It is widely reported that an African child dies of hunger and malnutrition every three seconds while in the same period African leaders steal $14,000 from their people and put it in foreign bank accounts. In the words of Milovan Djilas, they squander the nation’s wealth as though it was someone else’s and dip into it as if it were their own.

Isn’t it strange that exactly two weeks after the G8 deal that wrote off 80 percent of my country’s debt, all our parliamentarians, who earn $300 per month, are to receive $25,000 each in free car loans and $60 a day in rent allowance? I call it free car loans because five years ago they each received $20,000 but have yet to pay it back.

It is insulting that the bill for this lavish behavior is passed on to the disrespected poor as they struggle to pay a 40 percent tax on fuel that is used to support, among other things, government entities that consume almost one-third of the country’s fuel.

One would have thought that African leaders would be better advised to use resources to build the infrastructure that will increase the volume of trade within the continent and thereby improve economic activity. But President Benjamin Mkapa’s men are too busy harvesting where they have not sown.

You might ask why those in Niger go hungry when Nigeria, its next door neighbor, has abundant food. And how it is that Zimbabwe, a country that used to be the food basket of Southern Africa, now has thousands of starving citizens?

Does President Benjamin Mkapa know that African farmers use less than one-twentieth as much fertilizer as those in the West in part because import duties and red tape make fertilizer eight times as expensive as in Europe? For the same reasons, ordinary Africans pay ten times more for air travel than those on other continents.

Every ordinary African faces innumerable government-created bottlenecks in any enterprise they attempt. As the government has become the majority employer in these countries, the range of employment opportunities has been reduced and the government’s limitless public borrowing has crowded out the private sector’s access to capital.

Even the World Bank, one of the few remaining organizations still doling out free money to governments, now confirms that of the twenty countries in the world where it is most difficult to do business, seventeen are African.

Capital is a cowardly bird. It flies to safer places where it expects to earn better returns. 40 percent of Africa’s private investment takes place outside of the continent, while only 3 percent of Asia’s investment takes place overseas.

If there is to be any hope for long term prosperity in Africa, Africans must be given the predictability that comes with the rule of law, the protection of private property and free markets, and decentralized management of resources. This will harness local knowledge along with the creativity, diligence, and thrift that is natural to Africans.

Links:

Tanzanian President Mkapa’s rejoinder on December 7, 2005
Franklin Cudjoe's response to President Mkapa on December 12, 2005


Franklin Cudjoe is an Adjunct Fellow at the Independent Institute and Executive Director of Imani: The Center for Humane Education, a think-tank located in Accra, Ghana.

This piece is for the Center on Global Prosperity at the Independent Institute.