Sunday, April 03, 2005

Hope for a Peacful Transition

Africa has the unfortunate condition common to developing countries, a condition of being ruled by strongmen. The African “Big Man” came into being as nations moving from colonial rule into independence lionized their leaders as the fathers of the nation.

Those leaders and their successors have solidified a form of government that is more dependent on the individual than the institutions of government. These leaders sit on top of structures with a very powerful executive, meaningless legislature and a judiciary that is beholden to the executive. In addition, they hold all military and police power. With all the power in the hands of one individual, and all the attendant levers of power resident in one branch it is natural that the others will atrophy to the point that the literally cannot function without considerable input from the dominant branch.

In such a structure whoever takes the lead after their predecessor leaves, whether by means of the bullet or the ballot box, inherits a system that is designed to serve their personal interests and priorities.

It is against this backdrop that change on the continent must take place. It is the sincere hope of Bongotista that we as a people can rise above the base tendencies of our human nature and embrace the promise of ideas that will lead to a better future and bring about the change that is needed through discussion and debate.

It is often the case, repeated time and again around the world, that when change to the extent proposed by Bongotista is undertaken, it is effected by extreme violence and bloodshed. Strongmen do not understand conversation, they do not brook dissent and they do not participate in debate. They have no interest in the rise of the people from the destitution in which they wallow to a future of hope and opportunity. They have no desire to educate their populations to the extent they can actively participate in a process that will lead to the point where they can make an informed decision about their future.

In short, they will fight any attempt to remove them from power before they are ready to leave using all means available. And, after they are gone they will do their best to fight their way back into power. They are a destabilizing force both in and out of power. We must choose the path of debate and discussion as a means of change because if not we face years of fighting in which hundreds of thousands of people will die.

In such a scenario, people of all stripes, proselytizing all manner of ideas will take up arms with the aim of pushing those ideas rather than fighting for the good of the whole. It is reality of such campaigns that will not only lengthen but also intensify the military route.

A peaceful transition is what we plan and hope to see.

Sunday, February 13, 2005

Infrastructure – The Backbone of Development for Africa

In order to provide the level of development that will deliver the promise of a bright future to the people of Africa all aspects of the physical infrastructure must be torn apart and rebuilt. This rebuilding includes but is not limited to roads, commercial and commuter rail roads, airports, sea ports, electrical grid, natural gas and telecommunications.

Financing the Plan

The tax revenues from current levels of business are too low to cover the enormous expense of developing an infrastructure essentially from nothing. In order to ensure there is enough money in the treasury to meet the costs of laying down the infrastructure the new Working Group would work with the legislature to provide the treasury the authority to issue bonds.

These bonds would be standard savings bonds sold below the face value and redeemable for the face value in ten years, with the sale price and thus the interest rate determined by the confidence of the financial markets. The bonds would be available to the general public within the Lead African Transition Group of Countries (LATGC) as well as investors from outside the group. International markets as well as other central banks would be encouraged to invest in the bonds.

Other than raising capital for the start of the infrastructure development, this method would provide Africans with a vehicle for investing for their personal future as well as the futures of all those around them.

The legislature would also approve a currency for the LATGC and the bonds would be issued in units of this new currency. The currency’s initial value would be based on the collective average value of the currencies of the LATGC against the leading hard currencies such as the euro, the dollar, the yen and the pound.

Roads

Plans would be developed and approved for multi-lane divided motorways connecting all the large cities within the LATGC. This would include all capitals and major towns. The motorways would be designed with the capacity to efficiently accommodate traffic volume projections twenty years into the future. These projections would factor in the most optimistic income growth figures for the population as well as population growth building in assumptions that a certain portion of the population would own and operate personal automobiles and travel between the major cities. The projections would also factor in the enormous increase in commercial traffic that would be encountered as the LATGC grew from a mere agglomeration to a fully integrated commercial system.

This motorway system would include bypass and ring routes around all the major cities so that large metropolitan areas would not have to suffer the congestion of through traffic.

Commercial and Commuter Rail Roads

In addition to the motorway, all major and secondary cities would be connected with both commercial and commuter rail roads. While these roads would run on the same rail bed, there would be, at a minimum, four commercial tracks and four commuter tracks – two in each direction. The commercial tracks would be primarily for diesel powered locomotives hauling freight while the commuter tracks would be for faster moving electric powered passenger trains. One set of the commuter tracks would be for local traffic while the other would be devoted to high speed express trains. All commuter train traffic would be electrically powered. In metropolitan areas and railroad intersections the commercial and commuter railroads would not have their siding areas co-located. Commercial sidings would be developed well outside of cities with dedicated streets serving them from the industrial areas of the metropolitan areas. The commuter railroads would be integrated with the subway systems of each metropolitan area.

Commuter subway systems would be implemented in all major metropolitan areas on the commuter railroad system. As appropriate, either tunnels would be drilled or major arterial roads would be torn up, subway lines laid beneath them and then covered up with the roads. These subway systems would be extensive and, combined with a surface bus system, put efficient mass transportation within less than a kilometer of all residents of the metropolitan areas.

The subways would run along major thoroughfares while the bus routes would run across the subway system. This arrangement would put busses on lower traffic routes and keep them off congested streets thereby ensuring adherence to timetables. An example of the arrangement would be, say, the major thoroughfare of the north side of a major metropolitan area runs from the south to the north. There would be a number of subway lines constructed in a north-south pattern with possibly an east-west line on the outer perimeter. Between that perimeter line and the identified downtown or heart of the metropolitan area, bus routes would run on east-west routes between stations on the different subway lines.

Airports

All former capitals and other major metropolitan areas would have airports constructed well outside the cities and close to commuter railroads. The location of the airports outside the metropolitan areas would provide room for expansion as traffic demands necessitated the addition of runways. All of these airports would have radar and instrument landing system so that commercial and commuter aviation would have twenty-four hour functionality. In addition modern passenger handling and freight ports would be included in all airports and they would be linked by both road and rail to the metropolitan areas they served.

Sea Ports

All major sea ports would be upgraded with extensive container handling capability and all would be connected to the railroad network so that commercial traffic could flow in and out of the ports without clogging up roads in the metropolitan areas that have grown around the ports. The inter-modal cargo transfer facilities would be located in rail yards well outside the cities. The reason for this would be to keep heavy truck traffic away from the ports and out of the city center.

Physical Transportation Efficiency

The common threads running through the physical transportation infrastructure development are efficiency and capacity. The main purpose of this system is to allow the fast, easy and efficient transportation of goods across the LATGC as well as affordable and efficient mass transit between and within metropolitan areas.

Electric Infrastructure

With all the commuter transportation systems being electric, it stands to reason that the smooth operation of the system depends on a reliable electric grid. The Working group would conduct a full assessment of the energy needs of a fully integrated commuter rail infrastructure, existing industries and support industries for the construction and maintenance of the full transportation infrastructure. Support industries would include cement production and distribution, steel manufacturing for rails and concrete reinforcement in roads, structural steel for bridges and other steel needs, aluminum for trains and airplanes as well copper for wire to generate and distribute electricity; all heavy consumers of electric power.

Africa has abundant oil, natural gas, geothermal and wind energy as well as large arid areas near large metropolitan areas that receive over 300 days of sunshine a year (solar power). All these natural resource would be harnessed to deliver power into the full electrical grid.

Telecommunications Infrastructure

With all major metropolitan areas slated for connection by road, rail and airport the last piece of the puzzle for speedy commercial development is the deployment of reliable telecommunications. All the formerly disparate telecommunications systems would be upgraded and connected into a single wired grid. This grid would run between the major metropolitan areas and the rural areas would also be included in the wired telecommunications grid.

The wired telecommunications grid would be supplemented by ground based wireless networks with system-wide interconnectivity as well as satellite based telecommunications technology.

Utilities

The electric, natural gas and telecommunications infrastructure would be provided by the administrative authority and function in much the same way as public utilities do in many countries today. On the electric and natural gas side, these would be pure public utilities. On the telecommunications side, the administrative authority would have the responsibility of developing and maintaining the infrastructure while private companies would sell the service to consumers.

Investment Opportunity

All these infrastructure items would be provided by the government and financed by the bond issues. The implementation of each item is a heavily labor intensive undertaking and one that would take a number of years to complete. A large majority of the investment would be consumed by salaries of the workers building the roads, railroads, subways, airports electrical grid, cement factories, steel factories and so on. The investment would be in the hundreds of billions of dollars per year.

What this would mean is that a large portion of the population would move beyond a subsistence existence into a level of consumers with a collectively considerable amount of disposable income. This disposable income produce demand for things such as better housing, make use of the mass transportation, create a need for financial services such as banking and insurance. Consumption of consumer goods would see an increase commensurate with the increase in disposable income available for spending once housing and other needs have been met. This would lead to the rise of support industries such as an efficient retail sector, more doctors, better schools as well as leisure services such as hotels and restaurants.

All of these demands would create the need for professional services such as engineering for construction of roads, bridges, commercial and residential buildings. Engineers would also be needed for the roll out of the electrical and telecommunications infrastructures. While a lot of the components needed in the electrical and telecommunications infrastructure would not be available in the LATGC, engineers would be needed to install and then maintain the systems when they were finally in place. The same goes for technology installed in airports, hospitals and other industries such as steel, cement, banking, retail and leisure. The growth of these businesses would also create the need for legal and accounting services. These skilled jobs are well-paying and the vast majority of them would be filled with Africans.

Basically, those hundreds of millions of dollars invested in the LATGC would create needs that would put the economy on a fast forward track to development. A cycle of finance would be created where the initial money for the construction of the infrastructure would come from outside the LATGC but by the second or third year Africans would be investing a portion of that money in those bonds and the LATGC would shift from its reliance on foreign capital to self sufficiency.

The LATGC would be in great financial shape with regards to its relation with current donor nations. In the first year it would save enough money from the consolidation of government operations to pay off all existing foreign debt including both principle and total accumulated interest. Beyond that it would turn from a money pit into an investment opportunity producing competitive returns on investment.

Because there is only a certain amount of infrastructure needed the development of this infrastructure would only last three or four years. With that infrastructure in place the economy would grow at a very fast pace and would absorb the workers as they rolled off the infrastructure projects. The demand for commercial, industrial and residential structures would increase and would probably have labor needs beyond those of infrastructure construction.

The benefit the private firms hiring these workers would have is that of a trained and experienced workforce. In addition, as the infrastructure construction winds down the equipment used to develop it could be sold to private firms for use in their work. This would reduce the barriers of entry into this market and thus increase competition which always leads to competitive pricing. Competitive pricing would ensure that customers are not gouged and that real estate pricing would not balloon into unsustainable bubbles driven by ill-advisable speculation.

Sunday, February 06, 2005

A Case for Dissolving Africa’s Current Power Structures

Africa is made up of a hodgepodge of countries, each internationally recognized as a state yet none capable of standing on its own two feet. Within each of these countries is a machinery of state which in most of them is governed by a powerful executive be they nominally elected or militarily imposed. At a technical level all heads of state are equal therefore when any of the African heads of state travels the globe they are granted the diplomatic protocol befitting a head of state. This includes meetings with the most powerful rulers of politics and business. While their status grants them access to these centers of power they really have no influence on any international decision making especially those decisions concerning their own countries. When they are brought into the decision making process it is more to be informed than to be consulted.

Failure in Service Delivery

While the government of each country is basically functional with departments that to one extent or another structured to deliver services to the citizens they are generally ineffective. That is not to say that they do not cover some of the basics. There are functioning departments of education, finance, agriculture, police, legislatures that pass laws and courts that enact them but by and large each of these is meeting only the minimum requirements well below the needs of the citizens.

With a history of division and factionalism coupled with low revenues African leaders are handicapped in any attempt to provide strong leadership. What has instead happened is a keen sense of political theater has evolved. Heads of state and government surround themselves with the trappings of power and wield power within their states with impunity. They adjust the machinery of state to an such an extent that they become the source and embodiment of power. Access to and acquisition of power becomes the driving force for those in the leadership structure and decisions are made not with the interests of the population in mind but with the aim of advancing in the power machinery.

Misdirected Accountability

There is no accountability in place for actually delivering to the people. The only accountability is to the power structure and that accountability is measured in loyalty to the individual who holds the highest office. The result of this is a lack of development of African intellectualism beyond theory. There are a great many ideas for the building of the continent to the heights it is capable of achieving but those ideas are stuck in the hallways of academic institutions far from the continent where free discussion of those ideas can take place without fear of retribution.

This lack of honest intellectual contribution to debate has left public debate in the hands of so called leaders simply jockeying for power and pretty much amounts to hurling petty accusations and personal attacks back and forth. This form of debate, because of its hollow nature, does nothing to serve the people. The leaders are insecure in their positions and as a result squash any public debate of anything that even appears to question their authority. Being the centers of power they have become accustomed to slavish sycophancy and are unfamiliar with true and honest debate on the merits of arguments.

The Illusion of Power

The reason for their insecurity is that they know while they peddle the illusion of power to those around them, power validated by control of the machinery of state and demonstrated by accoutrements such as limousines, bodyguards, airplanes and lavish residences with which they accessorize their personas, in reality they have no power at all. Living in this reality they operate under the very real fear that the cloak they have so carefully woven over the eyes of their subjects and followers will be pulled back and the people will be able to see the truth. The only people for whom this is a frightening prospect are the leaders themselves.

If all these leadership structures were combined into a single one there would be great savings from a resource utilization standpoint and the single leader would have true power and their current insecurities would be replaced by a confidence that would show itself in the public discussion of issues.

In addition to being more confident, the new leader would also be accountable. The individual would have authority as well as resources to carry out the responsibilities of office. Although this person would have the power, that power would be kept in balance by an independent legislature and an independent judiciary.

Potential Savings from Consolidation

Looking at if from the perspective of efficient use of resources Africa is really wasting a lot of time and effort as well as foregoing many opportunities. Just at the government operations level the waste can be illustrated in a simple table.

Resource

20 Countries

One State

Difference

Heads of State

20

1

19

Ministers

400

10

390

Ministerial Vehicles

1,600

40

1,560

Assistant Ministers

800

20

780

Assistant Ministerial Vehicles

1,600

40

1,560

Ministerial Permanent Secretaries

400

10

390

Ministerial Under Secretaries

1,600

40

1,560

Embassies and Foreign Missions

3,000

150

2,850

Ambassadors

3,000

150

2,850

Embassy Personnel

150,000

7,500

142,500

Legislative Buildings

20

1

19

Heads of Military

20

1

19

Military Service Heads

60

3

57

Total

162,520

7,966

154,554

If the twenty identified countries combined their government operations into a single entity there would be significant savings from just the few items identified above. A full streamlining of all the governments in all the countries would result in the elimination of several hundred thousand personnel and that money currently tied up in administrative matters could be directed towards actually delivering services to the people rather than supporting an administrative structure that devours financial resources at a rate higher than its ability to deliver service. Only the vehicles for ministers and assistant ministers were shown on the table but in addition to them, all the other departments shown also have vehicles. Each of the embassies operates several vehicles as do the legislatures and military command structures. In addition, people at this level of government have personal staff attending to them ranging from drivers to body guards to secretaries, personal assistants, cooks, butlers, gardeners, pilots and so on. With a reduction in the total number of these high level people, the expense of the entire support structure under them would also be eliminated.

Each of these countries spends hundreds of millions of dollars a year maintaining embassies, militaries and the machinery of state. These are hard earned dollars that could be otherwise directed to other needs. By eliminating the unneeded embassies alone, over three billion dollars a year would be freed up. This money alone, if used to pay down the current debt load of all the twenty countries combined even at prevailing interest rates would eliminate that debt within a few years with no help whatsoever from external countries.

These countries in total spend over five billion dollars a year on new purchases, equipment and parts to support the twenty militaries and their assorted service branches of air force, army and navy. The consolidation of twenty militaries into one would reduce that expense by about 90% leaving over four billion dollars for use in development work.

If the money from these examples and all the other savings obtained by eliminating existing power structures were combined and used for debt servicing in the first full budget year, that portion of Africa would become debt free at an international level.

With a conservative operating figure of about fifteen billion dollars freed up and now available this portion of Africa would now be in the position to direct that money to development needs. This is an enormous amount of money and several multiples of the foreign aid currently received by all the twenty countries combined. The commendable efforts of Tony Blair to direct more money to the elimination of world hunger and disease amounts to committing around two hundred million pounds a year to the elimination of third world debt and improving education and delivery of health services. This is a great idea and a wonderful effort but the amount proposed is only a faint shadow of that available from the continent itself.

Sunday, January 30, 2005

Africa’s Foundation for a Bright Future

With the possible exception of South Africa, there is no single country on the African continent that is self supporting. The political map that was put in place following the triumph of the allies in World War II must be redrawn so that the landscape changes from a large number of unsustainable dependent countries to larger self-sufficient nations. The current map was drawn with the interests of the controlling countries in mind and not those of the inhabitants.

Nobody likes to be dependent on others especially when they know that given the chance they can actually stand on their own two feet. In order to move Africa to a new and bright future a conference should be organized the objective of which will be the consolidation of large parts of Africa into larger countries. It is unlikely that the entire continent can move in that direction at one time so one area has to take the lead. My proposal is that Sub-Saharan Africa east of Nigeria should be the region to take the lead.

Lead Africa Transition Group Countries

The following is a list of the twenty countries that make up the region in alphabetical order.

  1. Angola
  2. Botswana
  3. Burundi
  4. Cameroon
  5. Congo
  6. Gabon
  7. Guinea
  8. Kenya
  9. Lesotho
  10. Mozambique
  11. Namibia
  12. Rwanda
  13. South Africa
  14. Swaziland
  15. Tanzania
  16. The Central African Republic
  17. The Democratic Republic of Congo
  18. Uganda
  19. Zambia
  20. Zimbabwe

It is important that the leaders of this group of countries understand and accept that their personal prestige should take a back seat to the interests of their people. They were elected or appointed to leadership positions with the responsibility of furthering the interests of the people they serve and it is these interests to which they are bound by oath.

Working Group

A working group made up of public policy professionals drawn from the executive, elective and judicial branches of the representative states should be developed with representation from each country. An executive office should be established the head of which would be appointed by the heads of state of the representative states and ratified by all the current legislatures.

The executive office would have the responsibility of managing the day to day operations of the working group and would chair a cabinet with the following departments.

  • Treasury
  • International Affairs
  • Transportation and Communications
  • Juridical
  • Legislative
  • Industry
  • Health
  • Agriculture
  • Military
  • Education

Oversight

Providing oversight of the executive would be a council made up of the heads of state of each of the representative countries sitting on an oversight committee. The heads of state would be required to report back to their respective legislatures.

Transition Planning

The departments under the executive would have the responsibility of formulating policy for each of the areas that fell under their purview. The initial part of the work of each of the departments would involve the creation of a transition plan to move the region from multiple countries with disparate bureaucracies, legislative, and judicial systems to a unified and functional system. This transition plan would involve the top to bottom evaluation of all the current governments departments and agencies in the twenty countries including staff skill sets, processes, service delivery, budgets, and all matters operational. Once they have documented the existing environment they will move on to an operational needs assessment. They will then use the information from the evaluation and the needs assessment to develop the transition plan including timetables and milestones.

Once the transition plan has been completed it would have to be reviewed and approved by the oversight committee. The members of the oversight committee would provide approval after consultation with their respective legislatures and judiciaries. Each member of the executive committee would have the responsibility of presenting the plan to their legislature for debate and approval by simple majority vote. The legislatures would not be given the authority to modify the plan they would provide a straight approval or denial vote.

Major objections or debate points would be noted and any glaring omissions would be addressed by the working group. The modifications to the plan would then receive the final approval from the oversight committee.

Referendum

With the approval of the oversight committee, the final version of the plan would have to be presented to the citizens of each country in the form of a referendum. It would be the responsibility of each head of state to lead the effort to gain the support of the public in their respective countries for a plural vote in favor of the move to a unified region. The referendum would be public and monitored openly by anyone who felt the need to do so.

Implementation of Transition Plan

Once the approval of the public had been given, the plan would go into effect. The current legislatures would be dissolved and elections would take place for the seating of legislators in a single assembly. Heads of state would officially step down and hand over power to the executive office of the working group. Current government departments and agencies would continue to operate until their functions had been rolled into the central offices using the transition plan and government structure that had been approved by the legislatures. Courts would remain in place but the high courts of each former nation would hand their authority over to the central high court and be dissolved with former members being absorbed into judicial work groups that would work with the executive committee to implement uniform judicial code through the new entity.

New Government Structure

The new government would be structured as follows. There would be an appointed chief executive with responsibility over appointed committee members in office functioning as acting head of state in a defined and limited period leading to elections. There would be an independent judiciary with broad representation from all former countries and there would be an elected legislative body.

The executive would be required to complete the functional transition to a functioning central government within the timeframes agreed upon and ratified by the former legislatures. The new legislature would have oversight authority over the executive as well as budgetary approval authority. The judiciary would have the responsibility of administering a working court system.

Once the transition was completed, there would be a separate election for the head of the executive branch. This election would be open to all citizens of the new entity with the exception of the appointed current executive. Upon election, the “acting” designation would expire and the individual would assume the office of head of state upon ratification of the election by the legislature and endorsement by the judiciary. This head of state would preside over the nation and deliver government services through the branches of the executive.

Sunday, January 23, 2005

The Need for a Shift in Africa’s Orientation

An examination of the history of monetary inflow to Africa will reveal a process of supplementary resource allocation to social services. While Africa was, is and will be in dire need of monetary inflow dedicated to the provision of such services, directing the resources to such a limited scope does not serve the best interests of the continent.

If you try something and it does not work the logical thing to do is stop, figure out why it did not work, make the changes you think will make it work and then try again. If this approach is used but the idea continues to produce results that are not in keeping with the stated intent then it is time to go back to the drawing boards and rethink the entire thing. It may be the approach and the goal are not aligned or that there are elements in the process that have not been fully understood.

When people make a reactive decision they normally make it within the context of a result that is encapsulated by the event that triggered the situation requiring the decision. The decision is focused on the result of an occurrence which has created a perceived imbalance that must somehow be brought back into balance.

If a pedestrian is hit by a car the immediate decision is to go to the aid of the pedestrian and if possible restore them to the state they were in prior to the collision – a presumably physically healthy adult. Administer first aid, stabilize them and provide higher levels of medical services as needed to restore the balance which is good physical health. In this case the result is an injured pedestrian, the event is the collision between a moving vehicle and the pedestrian and the situation involves able bodied and competent (to make sound decisions) bystanders confronted with the decision on what to do about the poor sod bleeding on the side of the road. Their natural inclination is to come to the aid of the stricken person.

Taking this a little further, suppose that collisions between vehicles and pedestrians are not infrequent at this place. If this is the case then it is probably the best place to be a pedestrian unfortunate enough to come into violent contact with a moving vehicle because there would likely be plenty of people around with experience making the decisions necessary to restore pedestrians back to their original condition. While it is comforting to know that there are competent and experienced people in place to recognize the event understand the result and handle the situation to the positive benefit of the injured party the decisions and actions taken do nothing to address the occurrence of the events.

The existing structure of foreign aid to Africa amounts to opening a clinic at that location, placing observers by the roadside and assisting in the decision making to either get the injured pedestrian from the roadside to the clinic or bring the medical personnel out of the clinic to the roadside.

A logical observer would realize that while the need is being met a deeper examination is required to determine if it is possible to eliminate the need. A look into what generates the need may reveal several obvious things. The location of frequent collisions is at a point where a rural farmers market flanks a straight and level section of a busy road. The road happens to be paved and the market is located on that road at a point between two metropolitan regions where a major river crosses the road making it a natural location for a trading area or a market. So far everything is logical. There is commercial activity in two metropolitan areas, they are linked by a paved road which facilitates speedy transportation between them. The road crosses a river that runs through an agricultural region and is a natural transportation route for good produced by farmers. The intersection of the road and the river make a logical transfer point for produce destined for markets in the metropolitan regions.

Being an agricultural area, the region receives a lot of rain. Most of the accidents happen during or immediately after the rain. The rain makes the road slippery and reduces visibility for the drivers. They don’t see the pedestrians in time, hit the brakes but because the roads are slick, they are unable to avoid colliding with the pedestrians.

Under the circumstances – neither the road nor the river are going to be moved – it is likely that there will continue to be large numbers of people in the location and a high level of vehicle traffic passing through the area. If a bypass road were created to route traffic around the market it is probable that traffic flow through the market would be reduced but enterprising merchants would simply relocate their establishments wherever the heaviest traffic flowed and the crowds would follow so the collisions would continue. While a good and workable idea, it only temporarily alleviates the problem and does nothing to eliminate the collisions.

If the currently straight road were modified to include an enforced low speed zone that would bring the speed of passing vehicles down to a rate of travel that would allow drivers and pedestrians to see each other well before a crisis situation developed. If the idea was taken to the next logical step and the road was further modified on both ends of the market with a series of progressively sharper curves followed by speed bumps through the market the introduction of these physical impediments to vehicular speed would essentially eliminate the collisions. This is a good and workable idea that eliminates the need while allowing the market to continue to flourish. It not only makes the market safer but in slowing traffic down may actually increase the amount of trade since passers by would be able to see the wares and perhaps be tempted to spend a little money.

Rather than providing aid as a reaction to existing events, a deeper examination must be conducted. Africa is continuing to receive the observers and people in the clinics when what it really needs is the road modified such that the need for the clinic is eliminated.

Africa is receiving handouts when what she really needs is investment. Africa has been receiving foreign aid for almost fifty years and all she has to show for it is a continued slide down the slippery slope of poverty and destitution. The stated intent of the aid is to help Africa move out of its current situation into one where it is no longer dependent on hand outs from generous nations. After a few years of providing foreign aid and seeing that there was no improvement to the situation the aid was intended to alleviate it would seem logical that the providers of aid would go back to the drawing boards and rethink what they were doing and trying to understand the reason for failure and figure out a way to make it work.

It is beyond any reasonable observer why industrialized nations continue to pour millions of dollars in aid into Africa each year when it is painfully obvious that although they temporarily better the lives of the few they touch, they are not really providing long term benefits. They are pretty much handing food down to a person stuck in a trench rather than offering a hand with which to pull them out of the trench so that they can hopefully make meaningful contributions to society at large.

Africa’s debt has reached such a high level that the vast majority of the foreign aid provided is used to pay the interest on the debt while leaving the principal untouched. What is the point for the receiving countries? The banks that loaned African countries money are located in the donor countries so the governments of the donor countries are essentially paying the interest obligation on the loans – artificially supporting huge loan portfolios that really should be written off because under the current structure there is no way any African country will ever have even a faint hope of paying off the debt owed to the donor nations. If the donor governments are going to simply protect their banks why then do they not simply stop sending money to these poor countries? There really is no point in the poor countries spending so much time and so many resources flying officials all over the world negotiating aid packages each year if the money is never going to leave the donor country.

If the donor countries continue to pay the interest without lending additional funds this would place the receiving countries in the position to begin paying down the debt. With each passing year the principal would be reduced and that reduction would lead to smaller interest payments in each successive year. Under the current structure the money used to pay the interest is added to the principal and interest is charged on it in successive years. It seems like an easy way for banks in the donor countries to make money. Hundreds of millions of dollars guaranteed to be paid each year with the principal growing. This is the same as buying a house, receiving money from the bank to assist with the interest on the loan and then having that assistance added to the mortgage thus extending the payment period far beyond the original thirty years and guaranteeing the bank additional income at the expense of the borrower in the event the borrower remains liquid.

There is additional aid reaching African countries that is not used for debt relief. Instead it is used for things such as digging wells to provide clean drinking water, building clinics to extend some amount of medical care to rural areas and tracking locust patterns in an effort to coordinate spraying and avoid hunger that follows swarming. This kind of aid is constructive and should continue. If African countries are put in a position where they pay down the principal and the debt load on the continent is eased, local governments will soon find themselves in a position to provide those services themselves without need for help from outside.

The banks are a little short sighted on this matter. The interest they continue to receive, while guaranteed, will not grow at a rate that would be acceptable to any Wall Street fund manager. If the banks instead pressed their governments to focus their efforts on providing ready access to capital for local businesses, those businesses would borrow, invest and grow at a healthy rate. The donor governments are also short sighted because they are taking hard earned tax payer money and stuffing it in the pockets of banks that really did not earn it. This does not make sense for the tax payers, it does not make sense for the donor governments and it does not make sense for the receiving nation.

The donor governments should be working in the interest of the tax payers. What would be in the interest of the donor nation tax payers would be the creation of an environment in Africa where businesses determine it is safe to invest. When businesses invest in plant and equipment they also need people to fill positions, they create jobs. Jobs provide incomes for individuals and families. Those individuals and families are provided disposable income. That income is used to purchase goods and services and the more people employed the higher the demand for goods and services. Employed people with disposable income are a ready market for goods and services from the donor nations as well as goods and services developed at the local level to meet the needs of an employed population. Banks would receive much higher income and higher rates of growth if investment and employment were driven by market demand rather than government hand outs.

Government hand outs hurt industries and damaged industries do not grow jobs and low or no job growth leads to low or no demand for goods and services, increased unemployment and a slide down the slippery slope of poverty. It drives nations to the position where they need help to simply provide basic services such as water and medicine.

There should be a joint effort between Africa and donor nations to move away from a situation of dependency on hand outs to a climate of investment because investment yields returns on invested capital while hand outs simply provide today’s dose of medicine. Put Africa on a path towards growth and foreign aid will become a footnote in history books.

Wednesday, January 19, 2005

A Transition for Africa

As you have rummaged through these writings you have probably come to recognize a running theme. Africa is in crisis, a crisis whose foundation was laid by the structure of the colonial administration put in place by the European powers in the time they directly ruled the continent and perpetuated by inept politicians from independence to the present.

The writings to this point are prologue to the exploration of ideas that can break this continent of immeasurable potential out of the cycle of poverty, ignorance and destitution. It is not the nature of any peoples, let alone Africans, to assume a permanently downtrodden posture. Africa is a continent with tremendous natural resources, a vibrant population and an inherent inventiveness that if together unleashed is truly likely to lead the continent through a renaissance that will lift the continent out of the morass that a combination of deliberate planning and short sighted leadership has cemented in place.

It is time to harness the full potential of ideas that to this point have merely amounted to academic exercises. This statement is not an attempt to denigrate the work of the great thinkers of the continent. There are many great thinkers and many ideas but what they have lacked is a cohesive approach and a solid implementation plan that keeps the goal in perspective while incorporating the interests of all the stakeholders in the process.

The stakeholders in the process range from the African children who first saw the light of the world today to corporations across the industrialized world along with the politicians and religious leaders of the various faiths that claim large African followings. A thorough analysis of the interests of each of the stakeholder groups must be conducted. The stake holders should be measured and ranked in terms of current and potential ability to influence the process in a manner that will redirect efforts from the goal towards meeting their own self interest at the expense of the others, the process and, ultimately, Africa.

In addition to understanding what it is that motivates and drives each stakeholder, it is important to understand the root cause of the current problems so that Africa does not find herself expending a tremendous amount of energy struggling with the symptoms while the underlying condition goes untreated. If she does this all she will be left with is either utter failure or an effective way of prettily papering over the problems while hobbling along on evidently lame feet.

There are many things that must be challenged, conventional wisdom, political structures, economic systems and cultural bastardization among them. These and other things must be challenged not for the mere sake of generating arguments and their ensuing heated debates. These things must be challenged so that their efficacy can be either established or disproved. Those that are disproved should be discarded and the rest should be incorporated into the effort wherever they fit the overall strategy.

The foundation and pillars of a new Africa cannot afford to be polluted by outdated and irrelevant notions and conventions. They cannot be allowed to be diluted by the grafting of ideas and processes that have not worked in other areas. That is not to say that all existing ideas should be discarded. No, there are a good many ideas that either in their current form or, modified to the extent needed, have the potential of serving Africa well.

One two large impediments to progress are pride and ego. There are those who have presented ideas in the past and are wedded to them until death do they part. They must be willing to allow a full and honest assessment of their ideas and, if they do not hold water, be happy to let them go and get on board with the ideas that show real potential of constructively contributing to positive movement.

Africa needs change. Not for the sake of change, not for the sake of diplomatic treaties and proclamations but change for the betterment of the people who make up this continent. Change that will allow to Africa to take her place at the table and bring more than an appetite.

Monday, January 17, 2005

Financial Patronage - Africa's Cancer

Financial patronage makes up the framework that supports African politicians and while this is a structure that serves those in power very well, it delivers a great disservice to the general population both in the short and long term.

Under the structure of financial patronage, politicians use financial resources at their disposal to patronize those they choose for inclusion in the political process. By nature of the structure, the politicians on the top of this food chain need two things in order to sustain their hold on power.

The first thing they need is a source of funds and the second is a pool of functionaries who are not only in need of funds but also willing to take what is given to them along with the conditions that are naturally attached.

Elected representatives are entrusted with responsibility over public funds and they use their power to allocate tax income among various departments of government each charged with delivering specified services to the public.

Under a system in which politicians measure their influence not by the power of their ideas or the strength of their track record but by the size of their wallet and the number of people who owe allegiance to that wallet this money entrusted to political institutions is at risk of allocation to political rather than administrative use. Instead of building professional administrative institutions, they end up building job services for commonly unqualified friends and relatives. The individuals who ascend to positions of influence and responsibility under this system do so not on their knowledge and experience formulating and implementing policy but rather because of their ability to funnel money into the political machinery. This leads to a dearth of policy and a total lack of structure for the implementation of development projects.

Financial patrons support their power structure using various channels. One of those channels is direct cash payments and another is favorable consideration for government funded programs. The financial patronage system that has taken root in Africa is a combination of the two.

Politicians ensure that government contracts are directed to their friends and those friends either understand or are directed to share the spoils with certain constituencies. Sharing the spoils ranges from providing jobs to cash hand outs to whoever is on the list.

The focus in this system is not the performance of those individuals and companies but rather the amount of money they deliver into the political system. The greater the amount of money delivered the higher the rewards – rewards in this case measured in terms of access to top level politicians as well as the size and number of contracts awarded.

Outside of firms fully dependent on the generosity of the treasury for their operations and the favor of politicians for their survival, firms in private industry learn that the most effective method of gaining access and influence is by providing money to those in power. Whole industries begin to orient themselves towards meeting the goal of sustaining the political elite.

Companies in favor are protected from competition and without that needed stimulus do not innovate and fall behind firms that operate in competitive environments. Unfortunately, the companies in favor grow to become the largest and their operating model is copied throughout the system and industries become driven not by the strongest and most dynamic companies but by the most connected. Fortunately the nature of business is such that some of those companies are actually well managed but by and large structurally weak companies are propped up by the political system with the aim of self preservation.

It is common that these most connected companies pay little or no taxes thus robbing the government of tax revenue desperately needed to develop wide sectors of the economy. These African countries are already limping along on moribund tax structures and the denial of additional income pushes them further along the road of economic bankruptcy.

With unqualified people occupying positions that would optimally be staffed by trained professionals, opportunities for growth and development are squandered. With industries focused on propping up the political elite and self preservation by bribery rather than operational competitive advantage the already weak tax base weakens and the countries continue the nosedive towards poverty and destitution.