Letter from Mwanza - No 12

The Big Difficult Question!!

I thought I would try and return to the sentiments expressed by the fellow who thought not much had changed despite all the aid, expertise and wazungu involvement. What is really needed to bring so many needy people up to a level of basic decency? The supply of fresh water, enough food, relevant medical help, satisfactory housing and an education programme that gets this young population in a position to look after itself and in time look after the older one, are some of the things which are really needed.

I make absolutely no claim to be expert enough to make a comprehensive or detailed answer, but drawing on my faded memory of Lipsey and Samuelson at ‘A’ level economics, I would like to try by dividing the problem and possible solution into a macro and micro one:

On the macro level, I see no alternative to a long, sustained and corruption-free economic growth strategy. This seems to be a rather glib and easy thing to say; but I really do believe that the ‘western’ economies will need to move in the opposite direction with negative growth if our attempts to combat global warming are to be successful. The challenge in the social/liberal capitalist economies is how to square declining national produce with increasing public happiness. That however is another story!

So what seems to be required in much of sub-Saharan Africa is many years of double-digit growth where increasing GDP will deliver increasing wealth over and above that needed to provide for the increasing population. It is also vital that the proceeds of this increasing wealth get widely and fairly distributed in a targeted manner. Good governance, relevant economic strategies and a new sort of relationship with the wider world are all major parts needed. I’ll leave the first two for future consideration; but would like to make a couple of observations based on being an interested viewer of Africa for some 35 years. The chap I spoke with was right, when he said that all those white 4 x 4 vehicles with ‘experts’ in them coming to ‘help’ have made only marginal differences over many years. If we are honest with ourselves why should they? Africa was not colonised for the benefit of Africa, and post- colonial involvement has been because external countries need something from Africa, not the other way around. Yes money, goods and services do get donated, but never without some sort of strings attached. From a Euro centric point of view, we will say, “well of course there have to be strings attached; because we want to make sure our money is spent properly”. I think this is where change has to occur. If the wealthy countries want to help then they need to either give money to governments transparently and then let the government spend as they think fit. If they don’t want to do this for any reason then they should say no. Yes money will get poorly spent, but hey what’s so new about that. The important fact is that responsibility for the countries development should reside with the country. If they have bad government they have choices, not always easy ones, but they do have them.
I do sense a wind of change in government policies – it’s more of a breeze than a wind, but centralised top down government often out of touch and corrupt is coming under pressure. Initiatives like the ‘wise men’ of Africa group deciding an award for the President with the best record, greater public awareness of scandals and younger people demanding more for themselves, will all contribute to future change.

This really brings us on to what should or could happen at the micro level to enable a surge in economic activity sufficient to deliver significant growth. Last night, we went with Jenny, Joey and another couple of their friends to a Kiti Moto place. For our Jewish and Muslim friends, this is not a location to go, especially on a Friday night!! One of their friends (David or Doude as he is known) talked about his aspiration to be a national politician, and so I asked him what he thinks should be done. We agreed that education and health were crucial issues, but he felt the ability of people to be able to borrow money at reasonable rates of interest was vital. Bank borrowing costs some 20 – 25% pa. I said I sensed that Africans seems to be risk adverse and unwilling, compared for example to many of the Asian community, to re-invest back in their business. I realise I am making a huge generalisation here. Therefore whatever rate of interest you could borrow at most Africans would not partake significantly in any major wealth creation. Whilst agreeing, he felt change was gradually happening. It seems to me absolutely crucial that a more enterprising culture is rapidly developed, and again education will play an important part as will the economic environment set by the government. He also felt that some of the companies were unwilling to take on permanent staff favouring using people on a daily rate so if they are not needed there is no cost. 1930’s Europe and Dockers waiting outside the gates to know whether they have work in the 1650’s and 60’s come to mind. This just can’t be acceptable today.

Tanzania is fortunate in that land issues, such an emotional subject in many parts of Africa, are not contentious here. All the land is state owned, and sold on long leases. So at least if people want to invest long term in a business they should be confident that at least their land tenure is secure. I would also think this should be beneficial for the development on lending as land/buildings as collateral is a good starting point.

So, there we have it – some gems, of a questionably quality, thrown into the pot for African development. Aid given by willing countries without any strings attached, transparent and non corruptible government, a policy of double digit economic growth, targeted government expenditure with priority given to education and health, establishing and developing an effective and cheap method of bank lending, the encouragement of an enterprise culture and the establishment of work practices that lead to increasing productivity both in the manufacturing and service sectors.

So the big question really is “Are the governments and people of both African and the wealthy countries really up for the challenge?”


Kwa heri for now.

Donald
16th March 08