'Africa is where Bastiat is needed most'
Tuesday, October 25, 2005
Speech by Franklin Cudjoe on globalisation, governance and Bastiat.
Good evening distinguished ladies and gentlemen. There is a lot of talk around the world of the importance of globalisation but not until I got the opportunity to travel outside Africa did I fully appreciate its power.
This speech was thought of in Africa, drafted on the fringes of the Pacific Ocean, typed on an American computer, that uses Taiwanese chips, and a Korean monitor, assembled by Bangladeshi workers in a plant in Singapore, transported by Indian lorry-drivers, you are hearing it through a microphone invented by (Emile Berliner) a German immigrant to the United States.
These facts demonstrate the great benefits that can come when ideas and products are free to travel the world and have made me more concerned than ever at the hostility shown by many African leaders towards globalisation and the economic freedom it brings - sadly this antagonism is encouraged by many outside Africa who should know better.
5 days from today, Tanzanian President Benjamin Mkapa will step down after constitutionally respecting his term limits. He would be the third African leader in recent times to have honourably left office after Nelson Mandela of South Africa and Jerry Rawlings of my country, Ghana.
Although it is good news that he will hand over power as required by the law, there are signs that he may not really accept it and might be looking for a way to come back because he is making the point that African leaders should discard the political system the Colonialists left and brew "home-grown" democratic institutions that will reflect the needs of the continent.
This message particularly smacks of a return to pre-independence rhetoric of seeking first the political kingdom and all other things being secondary – a notion that fed the overwhelming urge to perpetuate oneself 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 as he and his cohorts have given him a de facto third term.
These ideas are as dangerous today as they ever were. At this time when the continent strives to come out of the cold after the expansive powers of postcolonial governments have meant the increasing politicization of life, the real need of the day on my continent is for economic freedom. Alas the economic situation is so bad in so many African countries that young able bodied men are fleeing their own governments, trekking through the vast and dangerous Sahara desert, struggling over heavily guarded barbed wires to look for better opportunities into Europe. Unfortunately, many die on the pilgrimage of freedom.
Furthermore, in what is being revered in certain quarters as wise words from an elder statesman to his colleagues in Africa, President Benjamin Mkapa is warning African leaders to be wary of the present competitive global political and economic order and that globalisation threatens to "exploit, denigrate and humiliate Africa". But one might ask whether Africa’s problems are really caused by globalisation.
African countries greatly increased exports to the US in 2004, generating revenues of over $26 billion in that year.
Globalisation can hardly be blamed for the low volume of trade within Africa, which is a mere 10% of all Africa’s trade. With 750 million people living in a continent, the potential for the expansion of trade must be enormous. Trade has hardly been tried within the poorest continent where tariffs are almost 50% with hundreds of road blocks manned by highway robbers in official custom attire.
What is it that motivates Nigeria, which calls itself the giant of Africa, to ban the importation of 96 products from Ghana when both countries have duty free and quota free access to the US markets for 6,500 of their products? So what sort of globalisation does Benjamin Mkapa want Africans to be wary of?
But the West is also guilty here as there is little incentive to encourage trade since foreign aid takes care of the elites who make economic decisions.
It is widely reported that an African child dies of hunger and malnutrition every three seconds while in the same period African leaders steal $14000 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 % 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 called it free car loans because five years ago they received $20,000 each but are yet to pay them back.
Isn't it insulting that the bill for this lavish behaviour is passed on to the disrespected poor as they struggle to pay for instance a 40 pc tax on fuel prices that is used to support, amongst other things, government parastatals which consume almost one-third of the country’s fuel.
One would have thought that African leaders would be better advised to use resources they generate to build the infrastructure that will increase the volume of trade within the continent and thereby improve economic activity, but alas 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 neighbour has abundant food and how it is that Zimbabwe that used to be the food basket of Southern Africa is 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 partly because import duties and red tape make fertilizer eight times as expensive as in Europe? For the same reasons ordinary African pay ten times more for air travel than those in other continents
Every ordinary African faces innumerable government created bottlenecks in any enterprise they attempt. As the government becomes the majority employer it reduces the range of employment opportunities and government’s limitless public borrowing crowds out the private sector's access to capital.
Even the World Bank, one of the few remaining organisations still doling out free money to governments now confirm, that of the 20 countries in the world where it is most difficult to do business, 17 are African.
Are we going to return the bad old days after independence when my parents joined long and winding queues to buy bread and other edibles to last for a few days? When severely malnourished children survived on palm kernel nuts and when my mother, a fish trader, could not raise a loan of $150 for her business.
Just as Frederic Bastiat reminds us that when goods fail to cross borders, soldiers will, capital is a coward flying to safer investments with respectable returns. African Governments watch helplessly as 40 pc of private African investment is outside the continent when the equivalent figure for Asia is only 3 percent.
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. This harnesses local knowledge, the creativity, diligence and thrift that is natural to Africans.
Bastiat had sounded the warning long ago about the size of government. His desire was to see an end to legal plunder by doing away with the whims of governmental administrations, their socialized projects, their centralization, their tariffs, their government schools and their state religion. Africa is where Bastiat is needed most. Thank you.