The Way Forward contd.
There is abundant evidence that demonstrates that Countries can and have made a great deal of progress in engineering economic transformation within twenty years. Deng Xiaoping started China’s economic reforms in 1978. The per capita GDP of China at the time was $155.00. Twenty years later, in 1998, per capita GDP was $835.10, a more than 500% increase. The same correlation can be observed in the economic growth trajectories of many countries in Asia, including Japan after World War II, Taiwan, Singapore, Hong Kong (before its merger with China), and South Korea. All these countries, including China, employed variations of the same formula.
African countries, conversely, have made very little progress since gaining independence, despite experiencing income and expenditure of trillions of dollars. Depending on the statistical reference, there are currently between 32 and 36 African countries among the world’s 50 poorest countries. It is evidentiary provable that in the early 1960s, most independent African countries had a per-capita GDP that was greater than that of China and South Korea. The per-capita GDP of both countries was less than $110.00. Today, the per capita GDP of South Korea, with a population of 51 million, exceeds $33,000, and China, with a population of 1.4 billion, has a per capita GDP of approximately $13,000. China is particularly instructive due to its communist political and economic system, which the country adopted under Mao. Despite the handicap of introducing market reforms into a command political and economic system, Deng Xiaoping was able to implement market reforms without changing the political system. In hindsight, many heavyweight commentators around the world believe that the political system should have been changed; however, that is not relevant here. Suffice to say that the economic changes that Deng Xiaoping’s reforms introduced to China lifted nearly 500 million Chinese out of poverty.
Like the Asian examples, the narrative of African countries is a story that is reflected in the economic productivity or lack thereof of the countries. In 2024, Burundi recorded the lowest per capita income of $153. A very surprising stat was about Nigeria. With a population of more than 200 million and energy as the primary driver of its economy, the country has a per capita GDP of $807.00, which is in the realm of dirt-poor nation status. Eighteen countries have a per capita GDP of less than $1000.00. Thirteen countries have between $1,000.00 and $2,000.00. The Sub-Saharan region has a per capita income of $1516.35, which is the lowest of any region in the world.
What is the reason for the abysmal performance of African countries, and is it reasonable to expect a course correction that will usher in a transformative course of action, both philosophically and practically? The answer to the first part of the question is everything! In terms of accountability, African people must own the failures they have engineered thus far. African people have knowingly voted scoundrels into office and subsequently have been surprised when the scoundrels took to robbing and stealing from their treasury. Africans are running chaotic and dysfunctional governments and societies, yet they expect to derive successful societies from this dysfunction and chaos. Of course, one must also empathize with Africans due to the steep learning curve that they encountered after independence. However, empathy must also be tempered by the reality that many countries have been independent for almost 60 years. Unless there is a particularly egregious handicap that forecloses the ability of African people to learn, one must agree that 60 years is enough time to overcome the challenge of learning a type of governmental and economic dispensation that is not readily compatible with the cultural normative framework of African people. Every society must hold itself accountable to make reasonable progress in a reasonable time.
“Everything” refers to the need to engineer a controlled demolition of the governance apparatus of African countries to embark on a fresh rebuild. That’s because the challenge is not a specific issue. It is an amalgam of political malfeasance, economic malpractice, poor work ethic, and endemic corruption. Across the continent, society will require reengineering on a better footing.
The good news is that there is hope and possibility, but time is of the essence. The timeline for achieving economic emancipation is not unlimited for several reasons, but the main reason is that African countries cannot expect to be a burden on the world without a blowback indefinitely. The impact of the destruction of USAID will be instructive and revelatory for African countries in the short-term horizon. Some have concluded that it is good riddance because the organization was more of a meddler in the internal affairs of African countries than a contributor to improving their socioeconomic status. Time will tell. Bill Gates is very apprehensive about the future of African societies without the disease eradication efforts of the organization.
The way forward for African countries starts with a systematic demolition of practices, methods, and their philosophical underpinnings. Starting with corruption. The idea that the poorest countries in the world can afford to create multimillionaire and billionaire politicians is absurd on the face of it, before you begin to catalogue the nefarious effects on society and the destiny of African countries. Corruption is a significant contributor to the endemic poverty in African countries, as it is the root cause of many of the poor economic decisions made by political leaders since independence. It is also a key factor in the coups d’états and civil wars that have plagued the continent since independence. For African countries to make progress in their quest for economic emancipation, every country must kill corruption. One of the most pernicious effects of corruption is the philosophy of economic development by projects. Road construction, power generation, crude oil refining, steel production, and sports stadiums, to mention a few, are notable projects that countries have undertaken, which have led to significant outcomes, and in many cases, evolved into a state capture scenario. On these projects, the political class that approved the projects profited on the front end from the kickbacks that the executor, i.e., the awardee of the contract, paid out in the agreement to secure the contract. Every contract that African politicians award comes with a 10% to 20% kickback paid to the politicians. That’s step one. Step two is that the project, once implemented, becomes a permanent source of income for the politicians. Step three is that any product the company sells or buys is marked up to ensure that politicians continue to receive a cut. That is the effect of state capture. Eventually, the companies fail due to paying too much for supplies and getting less than the price for the products they are selling. This is the drain on the resources of African countries that has condemned them to perpetual impoverishment, while the political class creates millionaires and billionaires. Any effort to evolve an effective economic engine in African countries must start with “killing corruption.” It is not an easy fix, as corruption will fight back. However, the law is against it, and enforcement of the law will be its demise.
The way forward to “killing corruption” is to treat the scourge as an existential threat, which it is! A new class of enlightened politicians is needed. One that recognizes that politics is not the path to wealth accumulation. Politics is a way to serve people and to improve their lives. Any other motivation for entering the fray of political competition is akin to a poisoned chalice. Killing corruption requires sophisticated tools and a sustained application of them. Lee Kuan Yew, when he was voted prime minister, required all the ministers, including himself, to wear a white robe to the swearing-in ceremonies to signify purity. He also established an anti-corruption agency that reported directly to the Prime Minister. These are structural and symbolic tools that every African country should embrace. However, the tools that will give the enforcement regime the bite it needs include electronic monitoring and surveillance, human intelligence, and financial monitoring. But the icing on the cake in the process is the judiciary. The laws have to be enforced in such a way that “no one is above the law” is the prevailing sentiment in the prosecution of offenders…to be continued in next month’s issue of Unleash Africa Newsletter.
https://fred.stlouisfed.org/data/PCAGDPCNA646NWDB
https://fred.stlouisfed.org/series/PCAGDPKRA646NWDB
https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=A9
