Competitive Ineptitude 3 Challenged by the Concept of Thinking Outside the Box

By | 2013-12-24T12:50:48+00:00 December 24th, 2013|0 Comments

“The lawmakers of a country whose GDP is $40 billion, plus or minus a couple of billions, [pay] themselves a higher salary than lawmakers of a country whose GDP is the highest in the world at about $15 trillion.”

THINKING OUTSIDE THE BOX for Economic development of AfricaThe greatest transgression of African leaders is their failure to solve the problems of their respective societies. The primary reason that they have not solved problems is that they have been distracted by the overwhelming desire for personal gain. Leaving absolutely no time to dream of what they can do for their people. I find it fascinating that in the face of extraordinarily bad job performance some cling desperately, it seems, to a line of reasoning that subscribes to the rationale that criticizing African leaders is wrong. It is anargumentwhose acceptance requires suspension of reason and is the root cause of the pervasiveness of “systemic blindness” in African countries. On the contrary, African leaders, like leaders everywhere in successful and unsuccessful societies, have raised their hand to seek and accept the mantle of leadership to steward the affairs of their people. It is stark raving madness to allow them do as they please without rigorous checks and balances to ensure that while good intentions are admirable, good performance and accountability is more desirable and better for the people. Not only do African leaders need to be criticized but the performance report card of some leaders warrants that they lose the privilege of leading.

Economic Development of AfricaTo borrow from and paraphrase Mr. Barack Obama, let us be clear about one thing. African people can evolve great societies. There is not a lack of will or talent. There is total and almost complete failure of leadership. From past and present African traditional rulers;political leaders and the leaders of business enterprises–the latter of which are comprised mainly of non-indigenes of the country in which they operate, there has been a systemic blindness.It—the systemic blindness–encompasses: (1) the discombobulating of social management and order; (2) the lack of accountability to the principle of measurable progress in reasonable time; (3) the suffering of the great masses of African people; and (4) the failure to measure up and compete for a place at the table of prosperity with other members of the global universe of prosperous and progressive societies. The unwillingness to engage is what I have described as a challenge of “competitive ineptitude” on the part of African leaders. The inability of leaders who travel the world to see and compare their own performance with that of the well-managed, well-run countries that they visit is a demonstration of lackadaisical ignorance of the highest order and magnitude. While the ability to evolve undiscovered processes and institutions of value to society may require a genius mind, copying successful ones only requires a wise and prudent mind.

Wisdom is a commodity most needed by leaders of African countries. It is sorely needed in the realm of public affairs as well as in the conduct of individuals who hold office in every African country. The Kenyan Assembly fought tooth and nail for a pay increase that gives the lawmakers a higher base salary thanthat of United States lawmakers. It became a cause ce’le‛bre for Boniface Mwangi, the young activist who has become the conscience of Kenya. Think about that for a moment. The lawmakers of a country whose GDP is $40 billion, plus or minus a couple of billions, paying themselvesa higher salary than lawmakers of a country whose GDP is the highest in the world at about $15 trillion. A governor of a state in Nigeria whose official salary is less than $50,000, purchased real estate property, luxury cars and a private jet worth tens of millions of dollars. The son of the President of Equatorial Guinea whose salary is less than $200,000 bought real estate properties, luxury cars and a private jet worth tens of millions of dollars. The current President of Nigeria, bless his heart, declared to the world and thevoting constituents of his nation, that he will not declare his assets and dared anyone to do something about it, while pardoning a convicted former embezzler-Governor of his state who also happens to be his political mentor.Said embezzler–governor who is male is reported to have spirited out of the UK disguised as the opposite sex to avoid arrest for money laundering.The wall of shame list of financial malfeasance by African political operatives is long.

In the arena of dispensing public duties and political management, the shortcoming is glaring. That is why this series is titled “Competitive Ineptitude.”To a person, it is arguable that African leaders have not adequately dug deeplynor have they searched high and low for the ways and means of eradicating decades-old issues plaguing their societies. Instead they have spent most of their time and mental energies dreaming up political and financial malfeasance. This is the main reason why problems are not being solved and progress is very slow on virtually every front. Why should African countries have intractable energy supply issues when solar power can provide most of the energy needs of African countries? Why are African countries not in the fore-front of developing solar power as a means of addressing dire energy shortfalls in their countries? Between hydrocarbon, hydroelectric and solar energy sources, African nations should be net exporters of energy to European countries who need stable and secure sources of energy. Europeans are building their cars so small to compensate for energy deficiencies that some European cars may soon be reduced to “one-seaters.”Solving energy, food supply, infrastructure and other problems will in turn increase the earnings capacity of African countries.

Country after country in Africa has invested huge sums in industrial projects only to wind them up after short money-gobbling operating histories. Such absurd and grotesque abuse of public monies gave rise to the term “Elephant” projects. These are miss-guided schemes that were not really designed to succeed but rather to enrich the scoundrels that forced it through and brought it to fruition in order to defraud their nation and people. It is an open secret that many African public servants and their leaders use large-scale projects mainly to siphon-off public funds through kick-backs. In the five decades of independence of many countries, their leaders have ignored great initiatives and eschewed many good ideas that could have contributed to advancing development aspirations. For example, many wise people have, for decades, counselled that for purposes of achieving development objectives, African countries have to process the raw material they are exporting and export semi-finished or finished products instead. Decades later the problem and scenario has changed little. Meanwhile, African countries are creating multi-millionaire and billionaire politicians at a faster rate than most other parts of the world.

Another glaring omission is intra-Africa trade. If African countries kept more of their business within Africa, the domino effect of the economic activity would contribute to economic growth in virtually every country. The challenges impeding rapid growth of intra-Africa trade is well studied and familiar to African leaders. The solutions are also well known. Deploying them requires a bit of outside-the-box thinking. One of the solutions worthy of consideration is bilateral and multilateral trade agreements that don’t require hard currency as a medium of exchange. Bilateral agreements have been in use for centuries. In the modern era, prominent factors in the rise were the two World Wars as well as the emergence of Council for Mutual Economic Assistance or COMECON. For example, due to economic hardship, bilateral trade was one of the principal ways in which South Korea began to rebuild its economy after the Korean War. What is perplexing to any reasonable mind that is aware of the technique is why African countries have not instituted the structures needed to aggressively deploy this compensatory trade technique in order to boost intra-Africa trade. Other than in Southern Africa, trade between African countries is insignificant. It is often easier to import and trade witha “colonial parent-nation” than to do business with a neighboring African country. In light of these deficiencies, African leaders should be busy dreaming up ways and means of addressing such problems on their own includingremoving impediments such as: (a) hard currency payment systems; (b) infrastructure deficiencies; (c) incompatible Tariff regimes and structures; (d) poor customs processing at border points; and (e) poor oversight of staffing responsible for monitoring transshipment points, to mention a few. All of which, including infrastructure deficiency, can be done in ten years. The economic transformation of South Korea, Singapore and China happened over two decades but the foundation was built in one decade of concentrated initiatives. Kim Chung-yum, erstwhile, super Minister of South Korea solved his nation’s energy deficiency in ten years. It is possible for the structural basis for solutions to the challenges facing African countries to be established in ten years!Bilateral and multilateral clearing accords are a practical step that African nations can deploy to fully maximize the economic potential of intra-Africa trade.

Bilateral and Multilateral Clearing Accords and Trade within Africa

As a result of Africa’s colonial experience, even after independence, there remains largely an indefinable separation that transcends existing physical and political boundaries between African nations. Consequently, African nations have been more likely to trade across the oceans than with each other. Trade within Africa, between companies and/or countries, as a percentage of overall trade involving African countries is negligible. There are numerous reasons for this that, since this is not the forum for detailed exploration, will be discussed in general terms. Fundamentally, it can be postulated that colonial expansionism within the context of specific national foreign policy was usually protectionist oriented. It was normal, therefore, for nations who indulged in colonial governance to reserve such territories (colonies) both as markets for goods and services as well as a source of industrial raw materials for the exclusive benefit of their individual (national) economic interests.

For this reason, the entire mechanism that facilitates trade within and without such territories was developed and geared to the pacification of pressures within the economic infrastructure in the home markets of the colonial governments. Probably a direct derivative of this inclination is the lack of infra-structural support for trade between African countries, including an inter-country road network, inter-country rail network, and indigenous ocean haulage facilities.Aside from such colonially inspired influences, the slow development of cross-border trade within Africa can also be linked to difficulties caused by currency inconvertibility and uneven tariff laws. The cap, of course, is that African nations are poor as well as import-dependent and, consequently, are often obligated by internal economic pressures to reserve hard currency resources for those imports, which they must procure from outside the continent. Except in the case of energy and food, this situation allows little or no room for seeking supplies from neighboring countries. Even where it is possible to buy certain consumer and industrial products from African sources, tied-aid or the availability of procurement-linked credit facilities from extra-continental suppliers invariably compels African nations to open their markets to such suppliers.

Multinational clearing accords between African governments can facilitate the rectification of this anomaly. The correction can be fostered by joint investment programs among African nations, which are oriented towards solving infra-structural problems that presently hinder the rapid development of large-scale industrial development schemes for the purpose of producing vital raw materials in African countries. Important immediate benefit derivable from bilateral or multilateral accords is in the role that it can play in facilitating a vigorous expansion of open general trade between African nations.Irrespective of prevailing economic conditions, it is possible for African nations to markedly improve on cross-border trade by basing the bulk of such trade on an exchange system devoid of foreign currency transfers. This arrangement could also function as a prelude to uniform tariff structures, an open exchange system allowing routine use of area currencies as legal tender, etc., which would be founded on the premise of unencumbered movement of goods and services within sub-sections or the entire African continent.

For illustration, let us use the ECOWAS sub-region. Assuming the members of this body were to implement a multilateral accord allowing trade without convertible currency (i.e., U.S. Dollars, the Euro, British Pounds, etc), the effect would be to, at the minimum, increase the availability of goods produced within the economies of participating countries to consumers in the area. It would, ipso-facto, increase industrial production by virtue of an expanded consumer market and leave more people within the area employed. It will result in an expanded revenue base, which in turn can be directed by area governments towards providing a better socio-economic environment and infrastructure. It is possible some countries would benefit more than others. However, it is unlikely that any country would fail to derive benefits.

In essentially the same format as Bilateral Clearing Accords––the monitoring bank in each country would maintain a transactions balance sheet and the payments due to or from each country, which beyond a pre-determined level, negative or positive, would have to be redressed immediately. The rectification of such imbalances also need not involve hard currency. Rather, they can be corrected through expansion of consumable export products within the context of the accord (i.e., the country or countries in deficit would increase exports and refrain from further purchases until there is an acceptable balance in the trade accounts) or via “other” tradable commodities, which can then be converted to hard currency through extra-continental trade. It is important to note that beyond signing enabling agreements and stipulating which products and/or commodities they do or do not cover, such arrangements should be rendered clear of government interference. This freedom is essential if these activities are to be a successful focal point not only of African-African trade but also an important economic stimulant for the participating African nations.

About the Author:

The author, John Akhile, is a man of varied entrepreneurial accomplishment in several fields. His range of interest includes fields as diverse from one another as; international trade, real estate and restaurants, demonstrating his keen interest in international affairs and in the cultural underpinnings of society. In many respects he is as a true "Renaissance" man because he has great depth of knowledge and command in many diverse fields. However his central passion has been the African continent and people, having concentrated on the issues hindering development and growth in African countries for more than more three decades. It has led to one self-published book and Unleashed.