Tuesday, February 02, 2010

The principal problem facing African economies

The principal problem facing African economies is political, not economic in nature. Thus key in examining how Africa should respond is the question: How can one assist African leaders to make the right decisions? Or as the British Prime Minister Gordon Brown once put it, “What can Africa, empowered, do for herself?” One does not need to be a college graduate to realize that money is of itself not the sole problem facing Africa. If that was the case the continent would now be wealthy given both the volume of aid squandered and the amount of mon¬ey moved and hoarded offshore in oversees banks and businesses. Hard as it may sound, the reality is that the solution to Africa’s myriad problems goes beyond simple accounting to a rather intricate and critical-to-apply formula of-GOVERNANCE, POLITICAL MATURATION, and STATEMANSHIP. One can write volumes of books on any of these subjects but that’s not my goal today.

A second major need in Africa is the need to create productive capacity within African countries. Many of you may understand that the collapse of Africa’s trade did not happen because of trade barriers. It was due to a collapse in productive output. No country or continent can thrive economically if its productivity in the vital sectors is lacking. The critical aspect to trade is less concerned with “how” countries might trade than “what” they might trade. African countries MUST invest time, energy and resources on the study of what they might actually be making and trading in the future that they are not now. Those of us who have had the privilege of living in developed countries know how hard it is to penetrate Western markets. Even those who were born and raised here work hard to understand the markets before they can venture into serious business.

Another crucial thing that we need to pay attention to is African institutions. An efficient economy requires a free society. The institutions of a free society, including property rights, the rule of law, and democracy are critical to the thriving of any economy. In essence, this translates into putting in place the global rules of operation that make for such competitiveness and investor attractiveness, which make economies more competitive. This involves deregulation and de-subsidization while lessening the burdensome bureaucracy, improving the workers’ skills, and formulating policies and laws without vested interests. Competition and competitiveness matter to long-term economic health.

Let me be quick to point out that improving or growing the economy of each African country is going to require a strategy that is tailor-made for that country. There is a pre­sumption that improvements in governance in and of themselves will be sufficient in uplifting Africa. According to Lord Denis Healey, former Chancellor of the Exchequer, “Governance comes and goes, but the rules of arithmetic and geography remain the same. In other words, legislators should make laws bearing in mind what they want their country to achieve in 50-100 years to come not one year or one electio circle!

Indeed it is sad and regrettable that Kenya is still rightly lumped together with other poorly performing countries where growth rates are low (Burkina Faso, Cameroon, Kenya, Malawi, Republic of Congo, Rwanda, and Zambia) or where they face severe ecological problems (such as Chad, Mali, Mauritania, and Niger). Kenya has had unequalled advantages in terms of academic intellectuals, political stability, great donor relations and unmatched entrepreneurial spirit among her people. It beats every logic to see how economic development could not be realized.

Kenyans have a chance to change their destiny in 2012 by electing a new breed of leaders who will not only live and perform above parochial and divisive politics but also help to nurture and promote the same on the whole continent. We in the diaspora are committed to working hand in hand with other Kenyans to ensure that only leaders with a vision for the country are elected.

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