Monday, May 31, 2010

Meddling Without Understanding in Africa

Last year, a group of American evangelists went to Uganda and convinced leaders there that homosexuals had a plot to change the laws and customs of their country to promote homosexual behavior and presumably turn heterosexuals into homosexuals. Such overblown fears don’t really take root in America, which is more tolerant of behavior many people feel is not in line with the majority’s views. We fulminate in letters to the editor, cable debates, protests and the like. Some go farther, but at heart, Americans don’t really believe in killing people whose sexual preferences differ from their own. Such is not necessarily the case in Africa.

Sexuality in Africa is not a subject that is usually publicly debated or discussed. Most traditional African societies do not accept homosexuality, but because African homosexuals haven’t historically tried to push their views into the open, little is usually done about it. I have seen homosexuals in African countries, and from what
I have witnessed, they are tolerated as people in the community who are different, but who don’t make an issue of their variance from the norm.

Unfortunately, there are two strains of activists in America and other industrial countries that make African homosexuality a phenomenon that will no longer be quietly tolerated. One strain is the conservative activists who oppose homosexuality anywhere and believe in a homosexual agenda that seeks to change society toward its image. The activist homosexual community in America may indeed be seeking to change the way our society views them. However, the clash of ideas here and in other Western countries remains mostly non-violent. If you take that confrontational view to Africa, though, the consequences can be much more dire.

The Ugandan parliament is considering legislation that would punish homosexual behavior with harsh punishment, up to and including the death penalty. It also would punish with jail time those who decline to report homosexual behavior. Ugandans, stirred by the thought of homosexuals taking over their society, reacted swiftly and harshly to the threat evangelists told them was before them. The Americans should have sought to better understand African society before rushing to the “rescue” of societies of which they had no working knowledge.

Subsequently, the Zimbabwe government, not known as a tolerant society under President Robert Mugabe, arrested two employees of Gays and Lesbians of Zimbabwe. Police claimed to have seized pornographic material and posters insulting Mugabe.

In Malawi, two homosexual men were arrested, tried and sentenced to the maximum penalty of 14 years imprisonment for “carnal knowledge against the order of nature.” The pair had been arrested in December following a traditional engagement ceremony.

The nature of their arrest points to the other strain of Western activists – those who believe that homosexuals should be equal to heterosexuals in all things and feel they should assert their rights at every public opportunity. This view fails to take into consideration the fact that African beliefs opposing homosexuality are widespread and entrenched, and public actions contradicting these log-held traditions will not be met with the relative tolerance they are in America and other Western nations.

Pushing African homosexuals into the spotlight on the continent is setting them up for treatment foreigners don’t understand. The two men in Malawi have been held at a prison known for its deplorable conditions. Is it fair to subject others to such harsh treatment without understanding what their actions will subject them to? Wouldn’t there be a safer way to press for a change in the African view of homosexuality if that is one’s goal? Direct confrontation in the manner that is done here is more than a non-starter in Africa – it is dangerous for those who pursue that route.

When President Mugabe says he considered gay people as “lower than dogs,” one might find his words despicable, but it should alert anyone hoping to change such attitudes that it wouldn’t be easy to do so and that trying to provoke the regime carries danger.

Here in America, even those who oppose homosexual marriage and equality in all matters for gay people do not accept their mistreatment. When the Ugandan law surfaced, some of the country’s officials were surprised to learn that some of their evangelical and conservative allies in America reacted strongly against what they were considering. Such is not necessarily the case in Africa by and large.

Homosexuals who attempt to imitate confrontational tactics used in America find themselves on their own. Newspapers and television stations, often government-controlled, do not wage campaigns aimed at supporting their cause. Leaders otherwise known for their support for democratic principles, such as Ugandan President Yoweri Museveni and former Nigerian President Olusegun Obasanjo, have public expressed their opposition to homosexuality. Given their views and those of many of their countrymen, which other African leaders do you suppose would speak out in favor of homosexual rights?

Pushing Africans in one direction or another on the sensitive issue of homosexuality requires a better understanding of the social environment in African countries. Otherwise, the consequences for those so influenced can be dangerous and counter-productive.

Thursday, May 27, 2010

Hope for Africa Despite the Gloom Bringers

Back in the 1990s, there were Africa policy people who were labeled “Afro-pessimists” because of their unrelentingly gloomy outlook on Africa’s future. Given the continuing conflicts, denial of rights, manipulation of elections and other negative trends, one could look at the glass as half empty and getting lower. However, you would have to ignore strong positive trends that cannot be easily cast aside.

Even though the global economic crisis crippled economies across the planet and even caused a dip in commodity prices and timidity in investment that slowed African economic growth, the continent has survived with bright prospects moving forward. According to the African Economic Outlook issued by the African Development Bank Group, the average annual gross domestic product growth for 2010-11 is estimated to be 4.5% this year and 5.2% in 2011. That’s up from 2.5% last year.

East Africa is seen as leading the way with 6% growth, while North and West Africa are each expected to grow at 5%, while Central Africa is expected to grow at 4% and Southern Africa at just under 4% because it was the hardest hit region. The African agriculture sector generally experienced good harvests due to favorable weather, but sectors such as mining and manufacturing were hard hit by the drop in commodity prices and aren’t expected to rebound quickly.

Dr. Ngozi Okonjo-Iweala, Managing Director of the world Bank, recently said that sub-Saharan Africa grew faster that both Brazil and India during the first decade of this century and will continue to grow faster than Brazil during the first half of the second decade of the 21st century. Given the need for fiscal retrenchment in the industrial countries of the world, African countries can benefit from the rebalancing of economies and serve as a new source of global demand.

In Liberia, a nation devastated by a long, brutal civil war and a subsequent uprising that chased into exile then-President Charles Taylor, current President Ellen Johnson-Sirleaf recently said her country’s private sector is being stimulated to create jobs to absorb the many young Liberians who are without work, and her government is introducing literacy programs to enable those young people to develop skills to fit the evolving marketplace. Confidence in Liberia, she said, has risen to the point that it is attracting foreign investment. In fact, President Sirleaf predicts that in 10 years her country will be self-sufficient and no longer in need of international assistance.

In the face of continuing attacks from the Lord’s Resistance Army and other rebel groups, Uganda has had to double its power output in the last five years because of the country’s booming economic growth. New power plants have been added in Tororo, Namanve and Mutundwe in Kampala that add to the existing hydroelectric power generation. Moreover, Uganda is pursuing renewable energy sources, such as the production of electricity from sugar cane waste.

Stories of blossoming African companies abound across the continent. Even formerly strife-ridden countries like Angola are seeing an economic resurgence due to a foreign-trained young entrepreneurial class. Madagascar had been a rising economic star until the recent political wrangling led to the overthrow of successive governments. It is hoped that when the latest political upheaval is resolved, the country can resume its upward economic trajectory.

Several African countries are usually listed among the world’s frontier emerging markets. They include Botswana, Cape Verde, Ghana, Kenya, Mauritius, Mozambique, Namibia, Nigeria, Seychelles, South Africa, Tanzania, Uganda and Zambia.
Certainly, there is plenty to criticize if you’re looking for reasons to do so, but Africa’s countries have mostly proven to be more resilient than some had supposed.

Lying ahead is a demographic surge that has already seen Africa’s population grow from 672 million in the year 2000 to 820 million by 2008. Africa is soon expected to join the one billion population club now inhabited only by China and India. Of Africa’s enlarged population, more than 43% is under 14 years of age, making Africa the world’s youngest continent.

Africa has faced wars, tyranny, corruption, short-sighted leadership, pestilence, famine, droughts, floods and any manner of other challenges and continues to rise in spite of them. Not all African countries are succeeding nor will they all succeed in the years ahead. Still, those who do will experience the kind of economic growth and wealth creation that transforms societies.

On the floor of the Senate of Imperial Rome centuries ago, it was once asked: “Can anything good come from Africa?” The answer was yes on that day so long ago, and it is still yes today.

Monday, May 24, 2010

Wait and See on Ethiopian Election

Now that Ethiopia has held its 4th national elections since the removal of the Marxist Dergue government in 1991, Ethiopians and the international community must wait as long as June 21st to see confirmed results. There has been much made of the relative calm of the pre-election period (more on that shortly), but it must be recalled that the violence last time took place after the election, was provoked by a questionable release of election results and was spurred by government troops who killed nearly 200 election protesters.

Prime Minister Meles Zenawi is predicting a win for himself and his ruling Ethiopian People’s Revolutionary Democratic Front (EPRDF) party. However, he also predicted a clear win in the last elections in 2005, and the surprisingly strong showing by opposition parties led to a delay in the announcement of results and suspicion of vote rigging by the government. All is quiet now, but if a similar result occurs when the results are announced next month, there could be further unrest.

Of course, some observers think the electorate expects there to be vote rigging and probably feels that protests are futile. Perhaps, but the voters also may be disappointed in an opposition that has fallen apart since its strong showing in 2005 after the jailing of opposition leaders and other factors causing previous parties to realign. There are three new opposition electoral coalitions in 2010: the Ethiopian Federal Democratic Forum (also known as “Medrek”), the All Ethiopian Unity Organization and the Ethiopian Democratic Party. Birtukan Mideksa, leader of the opposition Unity for Democracy and Justice party remains in jail.

Mideksa isn’t the only opposition party official who was jailed – just the most notable one. While the international focus has been on restrictions on media coverage of the election and on the ability of foreign embassies to observe the voting, there have been reports of government harassment and abuse of opposition parties. The All Ethiopian Unity Party reported that its candidates and supporters were beaten, arrested and prevented from voting in their constituencies in eastern and western Ethiopia.

Human Rights Watch also accused the government and EPRDF of harassing voters and using “repressive legal and administrative measures that the Ethiopian ruling party used to restrict freedom of expression during the election campaign.” According to the human rights organization, local government officials went house to house to intimidate citizens into registering to vote and casting their ballots for EPRDF. They reportedly were threatened with losing their homes or jobs if they failed to follow through.

The international community, including the United States government, finds itself in a difficult position. Human rights reports, such as the annual one released by the U.S. Department of State, consistently show government and ruling party efforts to disrupt the political opposition – to the extent of beatings and jailing of opposition officials, candidates and supporters. Nevertheless, criticism of the Ethiopian government and ruling party never produce strong action because of the alliance of the West with Ethiopia across a number of situations critical to global security.

Ethiopia is a major contributor to United Nations peacekeeping operations (the fifth largest African contributor and the 12th largest contributor overall). Ethiopian peacekeepers have been present in the UN Mission in Sudan (UNMIS), the AU/UN Hybrid Operation in Darfur (UNAMDI), the UN Mission in the Central African Republic and Chad (MINURCAT), the UN Mission in Liberia (UNMIL) and the UN Operation in Côte d’Ivoire (UNOCI). Moreover, Ethiopian intervention in Somalia is seen as a means of bolstering the Transitional Federal Government there without necessitating the presence of Western troops. Furthermore, Ethiopia has gained at least tacit support from the international community in its ongoing border dispute with Eritrea.

Most Western aid to Ethiopia bypasses the government or funds peacekeeping or other vital operations the international community is not interested in seeing ended. Consequently, the United States and other Western countries feel hard-pressed to force electoral or human rights reforms by the Addis Ababa government. Still, repression can only continue for so long without an explosion of some kind. The violence in 2005 was mostly on the part of Ethiopian security forces, but what if Islamist extremists or Eritrea begins to recruit and support Ethiopian militants to overthrow the government?

The Prime Minister already has accused ethnic Somalis in the east and Oromos in the south of being supported by outsiders interested in a violent change of government. Rather than mutely support the Ethiopian government, the West would be better served by using all means of helping Ethiopia move past its current handling of elections and human rights before it is too late.

There are three phases to elections: a pre-election period in which the environment is made either fair of skewed toward the ruling party, the election day voting and handling of ballots and election materials and treatment of voters and the post-election vote counting and release of results. Before we issue that sigh of relief over having dodged a bullet as regards electoral violence in Ethiopia, let’s see what the election results bring this time.

Thursday, May 20, 2010

African Women Face Increasing Insecurity

When Susan Brownmiller wrote her seminal book “Against Our Will: Men, Women and Rape” in 1975, she made the point that when there is insecurity in countries, such as war or civil unrest, one of the first social impacts is a rapid rise in the incidence of rape against women. A collapse of law and order has made women vulnerable since classical times. Now the phenomenon of rape in Africa seems to transcend what we normal y consider social unrest, with potentially significant damage of Africa societies in the years ahead.

Despite the official end of the war in the Democratic Republic of the Congo in 2003, the country is now considered by the United Nations to be “the rape capital of the world.” Margot Wallstrom, the UN’s special representative on sexual violence in DROC, urged the Security Council to punish rapists in DROC, but the perpetrators all too often escape punishment. Last year, more than 8,000 women were raped in DROC, most of them victims of gang rape.

The Harvard Humanitarian Initiative did a study showing that 60% of rape victims in South Kivu were gang raped by armed men, but an increasing number of rapes were being carried out by civilians. The assaults more often than not took place in the victim’s own home.

And this is not a phenomenon limited to DROC. In Kenya, rape was one of the effects of the election-related violence following the flawed December 2007 elections. The incidence of gang rape in the weeks after the elections rose sharply. The Nairobi Women’s Hospital reported at the time that rapes shot up from about four a day to as many as 10, and in one month, there were 140 cases of rape and defilement reported. Half the cases involved girls under the age of 18.

The potent ethnic issues the election of 2007 stirred up did indeed lead to widespread violence, but the rising level of rape was an issue long before that election. An April 2002 article in Kenya urged officeholders in the upcoming election to give more attention to the cultural indifference to rape in Kenya. Women’s activists at the time estimated that perhaps 10% or so of the women raped in Kenya reported their assaults, and that was long before the social explosion of late 2007-early 2008.

South Africa has long since moved past the violence of apartheid, achieving majority rule through peaceful elections in 1994. Nevertheless, in the 16 years since then, the country has experienced the highest rate of rape of any country not in armed conflict. Rape in South Africa is fueled by the practice known as “jackrolling,” named after a gang known as the “Jackrollers” who forcefully abducted women in black townships in 1987-88. This mostly youth phenomenon is almost always committed out in the open, and the perpetrators want to be seen.

Rape as an act of war in Rwanda is well documented. Numerous testimonies document the rapes, gang rapes, sexual torture and sexual slavery, in which women were held for days or even years and repeatedly raped. Many of the armed groups intended for their victims to become pregnant so that they could contaminate the ethnic genetic pool. The result involved husbands who survived the genocide rejecting their wives due to the shame of their carrying a child of rape. Unmarried women, including virgins prior to the rapes, became unmarriageable. Once can understand how this affected the Tutsi and Hutu communities.

Unfortunately, these situations are being seen again in today’s DROC. Clementine, a mother of eight, was given an ultimatum by her rapists, and she chose to accept rape rather than the murder of her husband. Her husband’s response was to leave her for another woman. Yvone, another wife and mother in the country, was gang-raped in front of her husband, who still lives with her but has in effect ended their marital relationship.

The cases of non-war rape by civilians who somehow feel free to rape on the rise on the continent and the strong traditions in many societies that causes rejection of raped women will split families and prevent many new families from being formed. If serious attention is not paid to preventing rape and dealing sensitively with its aftermath, social systems in African nations will be negatively impacted for years to come. The rise in single-parent families never signals social advancement, and indeed often leads to longstanding social ills. The strength of Africa is its family and social networks. If that is destroyed, so will the countries in which this happens. That must be taken more seriously by governments, donors and anyone else who can make a difference.

Monday, May 17, 2010

Heroes of the AGOA Struggles

At last week’s celebration of the 10th anniversary of the African Growth and Opportunity Act (AGOA), there were well-deserved kudos for former House Ways and Means Committee Chairmen Charles Rangel and William Thomas. They both successfully used their positions over the years to support U.S.-Africa trade. Congressman Phillip Crane, as head of the committee’s Subcommittee on Trade as well as his staff, helped improve the legislation. At the time the original AGOA was being considered, there hadn’t been major trade legislation for several years, but these gentlemen were determined to make AGOA reality. Still, there were others who should be considered heroes for the role they played in putting U.S.-Africa trade on the front-burner of American foreign policy.

Some object to calling Congressman Jim McDermott the father of AGOA, but without him, there would be no AGOA bill. If the leaders of the Ways and Means Committee correctly saw the benefit of McDermott’s legislation, they did not invent it, though they did help to refine it. McDermott, a psychiatrist, had an interest in Africa, but admittedly little expertise. Nevertheless, when his chief of staff, Mike Williams, presented the case that Africa was being short-changed in terms of U.S. trade policy, McDermott quickly saw the benefit of the legislation Williams wrote. The mark of a politician who truly believes in the legislation he introduces is that he can put his own ego on the side so that it can succeed. On the day his bill was being debated and voted on, McDermott stood at the back of the room so as not to make himself the issue so his bill could pass, and it did.

The floor leader of the McDermott bill was Congressman Ed Royce. Once the concept was presented to him in the mid-1990s, he latched onto it and became AGOA’s biggest and most active supporter. It was Royce who convinced then-Speaker of the House Newt Gingrich to support AGOA, and the Speaker went to the well of the House chamber to speak on behalf of the legislation, which is an unusual move by the leader of the House. Royce not only convinced Republicans and Democrats in the House to support AGOA, but he also went to the Senate to successfully work the bill there. Royce staffers Tom Sheehy and I worked on enhancing the policy language and worked with other staff to overcome obstacles to the bill’s passage.

Congressman Donald Payne is often lauded for supporting AGOA, but I’m not sure if that many people realize the critical role he played during the initial vote on AGOA. Witnesses that day saw the debate on AGOA take a nasty, partisan turn at one point as some Democrats, who had not yet accepted the benefits of trade and suspected any legislation supported by Republican leaders, began to question the wisdom of the bill. As fragile bipartisan support began to fray, Congressman Payne quietly spoke to members on his side of the aisle to calm their concerns. Had he not been able to stop the political hemorrhaging at that time, there may not have been an AGOA because political polarization would have set in.

I still recall the work former Congressman William Jefferson did to promote U.S.-Africa trade under AGOA. When he was indicted for bribery and later convicted, many of us lamented the loss of such an energetic supporter of trade and entrepreneurial activity. It is not possible for him to appear at any celebration. Even were he free to do so, his legal problems make it politically incorrect to mention him, but he played a major role in the legislative success of AGOA, and we should remember his efforts in that regard.

Rosa Whitaker has become a controversial figure in the AGOA story, but you have to ask why. When the position of Assistant U.S. Trade Representative for Africa was made a provision in the original AGOA, her patron, Congressman Rangel, helped her assume that role even before the bill itself was passed. If she had taken the position merely to pad her resume, you could understand the criticism, but she defined the position for all who would follow her and advanced U.S.-Africa trade through her relentless efforts. She subsequently sponsored a vibrant private sector-civil society coalition in support of AGOA.

The late David Miller of the Corporate Council on Africa led reluctant corporate leaders to support AGOA and put his organization’s prestige and resources behind seeing AGOA and its enhancements passed by Congress. The support of the corporate community involved in business in Africa was vital to building support in Congress. Since becoming CCA’s president, Steve Hayes has continued his organization’s support despite his criticisms of AGOA’s implementation. CCA members such as Tony Carroll of Manchester Trade have devoted their time to helping both the private sector and civil society advance AGOA and its goals.

Civil society leaders such as Mel Foote of the Constituency for Africa, Fred Oladeinde of the Foundation for Democracy in Africa and the late Leonard Robinson of the Africa Society of the National Summit on Africa were all leaders within the group of organizations who came to believe that AGOA offered significant benefits to small and medium entrepreneurs in Africa and America. The role civil society played was indisputably critical in gaining passage of the original AGOA bill and subsequent enhancements.

The late Ray Almeida consistently promoted the voice of Africans in U.S. trade policy deliberations at Bread for the World and the African Development Foundation. AGOA was created as a helping hand to Africa, and while the African diplomatic corps did weigh in on what would make AGOA Effective from the standpoint of government, Ray represented the smallholders whose livelihoods depended on increased trade.

It has been my honor to collaborate with these supporters of AGOA. Working together, we have seen Congress take unprecedented steps to advance U.S.-Africa trade and witnessed African businesses create jobs and build wealth for themselves and their communities. AGOA will only work better if we continue our cooperation across sector and political affiliation lines.

Thursday, May 13, 2010

AGOA: Ten Years Later

Ten years ago, Republicans and Democrats worked together across the political divide to pass the African Growth and Opportunity Act (AGOA) – the first major piece of legislation exclusively devoted to Africa and the first major trade legislation in several years at that time. Ten years ago, African diplomats abandoned their traditional aloof posture regarding legislation involving African affairs and reached out to Congress to approve AGOA. Ten years ago, corporations and non-governmental organizations worked in concert to see AGOA passed and implemented.

With all the collaboration AGOA engendered ten years ago and in years since then, one must ask, why hasn’t AGOA worked as we all hoped it would?

African exports to America have nearly tripled since AGOA was passed, and American exports to Africa have doubled. Looking solely at the numbers, one would say AGOA has succeeded. However, that would ignore the face that more than 90% of U.S.-Africa trade under AGOA involved the oil or mining sectors. That’s not success in the way it was intended. Members of Congress and their staffs (including me at the time) and all of us who have worked for AGOA’s success then and now meant for small and medium enterprises in Africa and America to benefit, which hasn’t happened to the extent intended.

The Office of the U.S. Trade Representative has made clear on numerous occasions that the U.S. government has done all it can to make AGOA work and that it is now up to Africans to take it further. They are partly, but not completely, right.

U.S. Trade Representative Ron Kirk told participants at last year’s AGOA Forum in Nairobi, Kenya, that the U.S. government has extended AGOA more than once and provides more than 6,500 items that Africans can export to America duty free. At the 10th anniversary celebration, he reiterated that “95% (of the tariff lines under AGOA) are not used.”

What Africans have said is that the extensions were all for relatively short periods, which our business people also have said does not provide the certainty they need for long-term, extensive investment. As for the number of items covered under AGOA, the U.S. government continues to focus on training their counterparts in Africa rather than the producers of goods. Like the overall trade statistics, the numbers would make you think we have devoted a lot of resources to capacity building, but in reality, much of that has been wasted like rain in the desert because we aren’t training the right people.

Congressman Dave Camp, Ranking Member of the House Ways and Means Committee emphasized this latter point: “The most generous preferences don’t matter if countries are unable to use them.”

Certainly, African governments could do a better job of working with their private sectors to identify and eliminate barriers to trade, but that isn’t happening to the extent it needs to happen. It must be said, though, that our capacity building efforts have not sufficiently targeted this disconnect between African public and private sectors. If it were so simple and easy for Africans to resolve these issues, they would have done so themselves already.

There are efforts to extend AGOA-like benefits in textiles and apparel to Asian countries such as Bangladesh and Sri Lanka, which already out-produce African countries. This would undermine current non-oil benefits for AGOA producers without enhancing sectors in which Africans could be more productive, especially agriculture. In the past 10 years, very little, if anything, has been done to successfully enhance U.S.-Africa agricultural trade. We are not much further on this than we were in 2000. Without a bustling agriculture trade sector, giving textile and apparel benefits to Asian countries will mean the non-oil, non-mining portion of AGOA will shrink further than it is now.

Watching the members of Congress gathered to celebrate the 10th anniversary of AGOA, it reminded me of the bipartisan campaign to make the legislation as comprehensive as possible without being so broad that it stymied Congressional action. In all the time I have covered Congress as a journalist, worked as a staff member or worked with Congressional offices on Africa issues, I have never seen as much across-the-aisle cooperation as I did during those days. Congressman Ed Royce said the effort to pass AGOA was the highlight of his career.

We will need another bipartisan campaign to figure out how to transition Africa for the time when business people on the continent have to focus on items other than textile and apparel. In the trade preference reform process, we need cooperation and understanding. This is about helping people in developing countries to create wealth and move away from dependence on foreign aid. AGOA can help do that if the right changes are made. For that to be done, the bipartisan Congressional coalition that passed AGOA must be reconstructed.

Monday, May 10, 2010

How Real Is Africa’s Rebound?

The International Monetary Fund’s Managing Director, Dominique Strauss-Kahn, currently is in the midst of his third trip to Africa in the last year. He told a gathering of Kenyans that Africa is rebounding from the recent global economic crisis quite well. “All across the continent, we can see signs of life, with rebounds in trade, export earnings, bank credit, and commercial activity,” Strauss-Kahn said. The IMF’s 2010 World Economic Outlook found that “sub-Saharan Africa is weathering the global crisis well.”

So things are looking up for African people, right? Well maybe not as much as the statistics would indicate.

While the IMF anticipates overall growth in Africa to reach 4.5% this year, that will depend on the global economic recovery. That means the economic crisis in Greece that the European Union and the World Bank Group are trying to avert could reduce that figure. However, it turns out that even if the save-Greece package just approved does work and prevents an economic domino effect, Africa’s long-term recovery may be in danger from another source – African governments themselves.

Oxfam research indicates that developing countries, such as those in Africa, are cutting spending vital for long-term recovery. Budget data from 56 poor countries shows that poor countries are cutting spending on education, health, agriculture and social protection. Overall, budgets in developing countries this year are being cut on average by 0.2% of gross domestic product. Meanwhile foreign aid is not filling the gap because development aid fell by US$3.5 billion last year, and revenues for 2010 are expected to remain below what was received in 2008 before the economic crisis fully took hold.

So how do these cuts affect Africa? Oxfam estimates that 50,000 children in sub-Saharan Africa died last year because of funding shortfalls caused by the global economic crisis. If you cut medical treatment, people will die for lack of medicine and trained medical personnel, especially in vulnerable poor or rural areas.
Since 2000, African countries have voluntarily entered into agreements to boost social spending for the benefit of their citizens. African governments over the years committed themselves to spend up to 20% of their budgets on education, 15% on health, 10% on agriculture and 0.5% on water and sanitation. But some African governments lament that these agreed-upon targets limit budgetary flexibility and should be stricken from future agreements.

At the recent annual African Union and Economic Commission for Africa Conference of Finance, Planning and Economic Development, delegations from South Africa, Rwanda and Egypt argued successfully that any reference to the budget targets should be removed from the conference report.

“These targets do not make any sense,” said Cecil Noel, South Africa’s chief finance director. “I shall be asking my head of state to propose a review of these targets in the AU Summit in Kampala in July.”

Egypt’s Deputy Minister of Finance Hany Dimian echoed that sentiment. “The heads of state have made a colossal mistake. These targets straightjacket the process of budgeting in our countries.”

On the other side of the argument, Nigeria, Kenya, Ghana, Malawi and Cote d’Ivoire fought to retain the targets in the official document. “I worry about the precedence we are setting where we make commitments and drop them when it is expedient,” lamented Nigerian head of delegation, Ambassador Nyoko Toyo.

The African Monitor, a non-governmental organization established in 2006 to monitor and advocate in relation to G8 commitments to Africa, reports that last year 44 countries on the continent continued to import at least a quarter of their food, retention of girls in education and overall quality of education remains weak and people living with HIV-AIDS too often lack access to life-saving medicine. The refusal of African governments to spend to upgrade their education, medical and economic systems will keep them dependent on donor aid, which has been declining for years and will continue to decline.

The G8 nations have made promises to deliver certain percentages of aid to African countries and have failed to honor their commitments. How will African governments credibly demand that donor countries keep their word on development aid when many are in the process of breaking theirs for the very same issues?

This situation seems akin to eating one’s seeds rather than planting them. The Bible says you reap what you sow, or in this case, what you refuse to sow.

Tuesday, May 4, 2010

Draining African Finances

The longstanding charge that African leaders too often drain their country’s financial resources is once again surfacing because of a U.S. Senate investigation, but this time an American accomplice is under the spotlight as well.

The Senate inquiry, being joined by the Gabon Ministry of Finance, is looking into a failed deal by the Government of Gabon to purchase cargo airplanes that allowed US$9.2 million to be transferred to the private bank account of the late President Omar Bongo in Malta. Bongo, Africa’s longest-serving head of state with 41 years in office until his death last year, apparently amassed millions in diverted U.S. funds through that Malta account, along with his son, Defense Minister Ali Bongo.

A French magistrate also has been investigating Bongo’s assets in that country, which include more than 30 properties, nine luxury cars and cash in more than 70 bank accounts. Under Bongo’s government, French companies dominated Gabon’s economy through the widespread use of kickbacks and bribes. Meanwhile, Bongo’s people are among the world’s poorest.

In the Malta case under investigation, an American lobbyist has been implicated in laundering millions in “suspect funds.” According to the Senate investigators, lobbyist Jeffrey Birrell, using a corporation he formed known as The Grace Group, funneled funds to the personal account of then-President Bongo. Birrell allegedly used other foreign accounts as well to transfer money to Bongo or his cronies. For his efforts, he allegedly was paid approximately US$1 million.

Unfortunately, this is not an isolated case of money siphoned from the accounts of an African country. Global Financial Integrity, a program of the Center for International Policy, released a report entitled “Illicit Financial Flows from Africa: Hidden Resource for Development,” covering 1970-2008. That report estimates that US$854 billion in illegal capital flows left the continent during that 39-year period, and correcting for current reporting techniques, the total could reach US$1.8trillion during that period.

So much attention is paid to bribery and theft by government officials, but the report found it to total about 3% of illicit flows. Criminal income from drug trafficking, racketeering, counterfeiting comprise between 30-35% of the total, while commercial tax evasion, mainly through trade mispricing, constitutes 60-65% of the total. The report found that this illicit flow is facilitated by an international network of tax havens, secrecy jurisdictions, disguised corporation, anonymous trust accounts, fake foundations and money laundering techniques.

Corrupt African officials are not working alone in this effort; there is a cadre of people in the international community only too eager to make money off the misery of people in the countries from which money is systematically drained. Aid money and other income come into countries through one door and go out another into personal bank accounts. For a long time the blame rested solely on corrupt African leaders, but it is all too clear that many others make this corruption possible. Recognizing the destructive nature of this corruption, 34 nations signed the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions in November 1997.

However, of the 34 signatories and nations that have conformed their laws to prevent bribery and other corrupt practices, neither China, nor India nor Malaysia – major economic actors in Africa – are included. Where there is a willing buyer, there is a willing seller, and gaining business advantages and avoiding costs are major incentives for foreign financial interests to corrupt African officials or facilitate already-corrupt officials.

“The enormity of such a huge outflow of illicit capital explains why donor-driven efforts to spur economic development and reduce poverty have been underachieving in Africa,” states the GFI report, which estimates that developing countries lose US$10 through illegal capital flows for every US$1 they receive in external assistance.

The criminals who bankrupt governments and deny African citizens services to which they have a right must be stopped if the Millennium Development Goals and other development benchmarks can ever be realized. Here’s a hint in the effort to find them: they’re not all Africans.