Wed, Feb 17, 2016
“While $134B flows in each year, predominantly in the form of loans, foreign investment and aid; $192B is taken out, mainly in profits made by foreign companies, tax evasion and the costs of adapting to climate change." - Health Poverty Action.
The presence of some of the world’s fastest growing economies in Africa serves as fodder for the Africa rising narrative. A walk around capital cities of Nigeria, Kenya, South Africa, Angola, and others, will put a stamp on the discourse that Africa is rising at a significant rate. The crane-filled skylines, construction of road networks and railway lines, multi-million dollar mansions and business malls erupting across major towns and cities, and growing technologies are just but a few indications of the continent’s ascent to prosperity.
But even as people across the globe engage in discussions about how fast the continent is growing, ironically, the other discourse that goes hand in hand with this narrative is the astounding number of people who are still grappling with deep-rooted poverty in the continent.
One can only wonder why there is still a widening gap between the rich and the poor and why Africa is still struggling with poverty despite the fact that it is home to a major percentage of raw materials that are in hot demand around the globe.
During the recent World Economic Forum in Davos, African leaders argued that powering Africa will answer the continent’s growth in future. According to them, powering Africa will create jobs, cause industrialization and business expansion.
Whereas powering Africa would contribute a lot to growth on the continent, we argue that for Africa to grow sustainably, it will need to pursue comprehensive methodologies that address all the bottlenecks to development. We contend that to understand what the areas for reform are, governments will have to first understand the reasons why Africa has been held back for so long.
Here, we have assorted the issues that Africa needs to pay attention to in order to be at par with the rest of the world in terms of prosperity.
The argument that civil wars, like terrorism, contribute to poverty is a no-brainer. Wars disorient people and leave them destitute. They also disconnect businesses from their clients. Moreover, roads and communication networks are destroyed or barred which further cripples these businesses. Industries collapse, people loose jobs and investors lose confidence in the affected country thus pushing the affected region down the economic slopes.
Then, of course, there is the trail of deaths and scores of people left injured not to mention the loss of property which adds to the increase in poverty levels in areas marred by wars and terrorism.
According to the 2015 Global Terrorism Index, the cost of terrorism to the world was $52.9 billion in 2014. This is the highest number since 2011. 32,000 people died due to terrorism acts in the same year.
These terrorist acts have not only resulted in deaths and injuries but have also affected the socio-economic divisions in the country.
Reports from the oil producing country say that business activity in regions like Kano had dropped by 80% by 2015. Apart from business disruption, the revolt has caused sporadic migration, abandonment of professions and jobs, discouraged foreign investment, food scarcity and dehumanized people. All these factors put together will attract poverty in the region.
Nigeria, which became Africa’s largest economy in 2014 is experiencing economic challenges with World Bank’s Global Economic Prospects 2016 predicting that the country’s economy will continue to slow down.
With such high economic impacts and deaths, poverty is inevitable.
This has contributed to the plight of Africa today. Senior leaders in government and private sectors alike have resorted to taking bribes.
A survey by the Transparency International(TI) indicated that most African governments are not able to meet their citizen’s expectations due to rampant corruption.
The respondents said that corruption in the region was increasing despite the campaigns and activism by civil society and the population. The police were identified as the most corrupt group across the region.
At least in every news item, one story covered is about how a high-ranking official is under investigations over corruption allegations. While this is good news to many, the laws on corruption are lenient allowing those caught in the act an easy passage.
According to Control Risks’ annual survey ‘International attitudes towards corruption’, Africa is increasingly aware of the corruption problem and even the importance of managing it within the region.
Africa is increasingly aware of the corruption problem and even the importance of managing it within the region. While the culture is strong, what is not is the political will and legislative framework to deal with corrupt cases especially those involving senior political leaders.
In an interview with Mark Doyle of BBC President Ellen Johnson-Sirleaf of Liberia revealed that she underestimated the level of corruption in her government when she took the leadership position.
"Maybe I should have sacked the whole government when I came to power," she said. "Africa is not poor," President Johnson-Sirleaf told the reporter, "it is poorly managed."
"Africa is not poor," President Johnson-Sirleaf told the reporter, "it is poorly managed."
In some instances, acts of corruption have been used to fuel civil wars and terrorism.
Even up to today, some African households cannot afford basic education for their children. Although some governments in the region have taken up the matter of basic education provision as a government project, many areas lack schools and even where schools are, they are sparsely located posing a challenge to the young children who would rather help at home than make the long walk to school.
Inadequate skills and knowledge cripples the economy as there is no skilled labor to drive the nation.
"[The] education that Africa needs is one that is skills-based, technologically grounded and globally competitive," Said Adejumobi, head of the governance and public administration division at the United Nations Economic Commission for Africa, while speaking to CNN.
education that Africa needs is one that is skills-based, technologically grounded and globally competitive.
For Africa to be competitive, there is a need to invest in reinventing its education and research systems.
A majority of African youth are not employed today due to inadequacy in education and technical skills. Corruption in form of nepotism has also affected the rate of employment on the continent.
You can find more information about education in Africa and its challenges by reading some of our articles below.
Health and poverty are interconnected. When a continent is not able to create quality health infrastructure and system for its own people, it risks falling into a trap where the economy remains stagnated.
Poverty is both a cause and a consequence of poor health. Poor living conditions increases the chances of poor health. In turn, poor health entraps communities in undying poverty.
One of the consequences of diseases is that it depletes individuals, households and communities’ energy to work to build their lives and that of the society. With less individuals working to make their lives better, poverty creeps and entrenches its roots.
WHO reports that approximately 1.2 billion people in the world live in extreme poverty-surviving on less than one dollar per day.
Diseases especially communicable ones spread more rapidly in communities that are poor and do not have access to basic amenities. Take for example the spread of Malaria which can easily be managed through simple yet vital but scarce utilities like mosquito nets and repellents.
HIV/AIDS, cancer among other diseases have also contributed to increased poverty levels in Africa. These diseases, apart from ‘decapitating’ the victims, leave families and communities in debt which further worsens their ability to sustain themselves.
In this case, nothing much can be done. Being placed in a geographically disadvantaged location only calls for innovative ideas to utilize the available resources to advance lives.
A significant number of African countries suffer because they are landlocked- geographically unlucky.
A country like Switzerland is landlocked but it is surrounded by stable economies, creating a platform for trade. On the other hand,
most landlocked countries in Africa are surrounded by unstable and conflict-filled countries.most landlocked countries in Africa are surrounded by unstable and conflict-filled countries. These factors injure the economy of the landlocked countries. Uganda, a landlocked country bordered by South Sudan and Democratic Republic of Congo stands as a good example. These neighbors feature civil wars all year.
Although Africa boasts of indigenous and numerous resources, they are poorly distributed among countries and within states/regions in those countries. Despite that, governments have not adopted strategic ways to redistribute such wealth to the citizens.
Wealth distribution is an issue, but what is even more disturbing is how great and promising resources like oil and precious minerals are exploited by foreign investors and big corporations which pay little or no taxes to the countries in which they operate. Such practices have left Africa twirling in poverty.
In the recent past African leaders have been heard arguing that International Aid has curtailed Africa’s growth efforts. During the recent fourth World Government Summit in Dubai, President Paul Kagame of Rwanda said that donor support should not be relied on forever but instead be used to build institutions and the economy.
“Our vision is to make sure we are able to stand on our own feet and develop our country, attract investment and do business. There is no reason why we can’t grow intra-African Trade to the levels we see in America or Europe. What is good is not necessarily being small but good management of whatever you have, small or big,” he said.
"There is no reason why we can’t grow intra-African Trade to the levels we see in America or Europe."
Whereas, some non-governmental organizations have helped Africa through support in health, education, governance and in other sectors, some firms have been accused of using stories of desperate Africans to advance their own selfish goals.
The Kibera slum in Kenya is one good example. Kibera, the largest slum in Nairobi and second largest urban slum in Africa is located just 5 kilometers (3.1miles) from the capital, Nairobi. The slum is filled with a sea of NGO’s which have not done so much for residents who continue to scavenge for a living in these tough economic times.
Another outlook into Africa’s failing economy is the loss that Africa is experiencing as the foreign aid-giving countries suck Africa dry of its resources. The outflow costs to Africa surpass the inflows
The outflow costs to Africa surpass the inflows that get to the continent in form of aid. Health Poverty Action highlights that Africans are losing almost six and a half times what their countries receive in aid each year.
Video source: Health Poverty Action
“While $134 billion flows into the continent each year, predominantly in the form of loans, foreign investment and aid; $192 billion is taken out, mainly in profits made by foreign companies, tax dodging and the costs of adapting to climate change. The result is that Africa suffers a net loss of $58 billion a year. As such, the idea that we are aiding Africa is flawed; it is Africa that is aiding the rest of the world,” the report argues.
Africa is also to blame when it comes to misappropriation of aid funds and corruption among the officials.
Introducing fair trade policies for African countries to trade with nations abroad will grow Africa’s economy much faster than aid would. Unfair trade strategies have rubbished Africa’s growth exertions.
The US, the European Union are protecting key industries that Africa could compete with like agriculture, thus it has become more difficult to trade in this sector.
Poverties Organization argues that instead of the international communities protecting their benefits, they should give preferential market conditions to poor countries for export or agricultural development. This, ‘Poverties’ adds would provide them (African nations) a path to fast development, and hopefully diffuse the benefits to inner regions. This will have a direct effect in the internal market, help it to thrive and alleviate poverty in African countries that are landlocked.
The discourse on poverty in Africa is like a jig-saw puzzle: Africa as a region is rich but her people are poor.
Although Africa is rising, poverty is curtailing the continent’s growth efforts. As a region, Africa needs to address the negligence of sound economic policies. Corruption, selfish personal interests, thirst for power, religious and ethnic differences are clogging the pipeline within which development would have flowed.
Governments, regional communities and private sector should develop effective strategies based on regional needs and partner with like-minded corporations local or foreign to drive Africa’s Development wheel forward.
Africa has the potential to rise above any other continent if only it laid emphasis on shunning corruption, providing basic amenities including water, food, shelter, energy, education and security for all. If we look keenly at what is coming to Africa in terms of aid and what is going out of Africa in terms of profits, tax evasion and debt payments, Africa can be summed as wealthy. In fact, Africa is financing other continents.
Africa is a wealthy continent. Let us all strive to grow the region to live its name, ‘Africa a land of wealth!’.
Kajuju Murori is an enthusiastic writer with a bias towards development stories that ignite positive change among individuals in the society.
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