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Of Tigers, Debt Merchants and 2020 Vision

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The former president of the African Development Bank, Donald Kaberuka, has dismissed as “nonsensical” any suggestion that Africa may have over-borrowed, saying instead that with better debt management and higher domestic revenue mobilisation, the continent can take on more debt. But Kaberuka fails to make the link between the increased borrowing and the revenue problem.

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Of Tigers, Debt Merchants and 2020 Vision
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The public debt burden has dominated economic debate in 2019. Public debt is likely to be even more topical in 2020, both domestically and globally. As at end November 2019, 31 out of 70 countries in the IMF’s roster of low-income countries are listed as either in or at high risk of debt distress. Another 26 are listed as being at moderate risk, leaving only 13 that are still at low risk. Last week, the IMF approved a $2.9b bailout for Ethiopia, one of the high distress risk countries.

I first called out the Jubilee administration’s borrowing binge six years ago. Up until two years ago, the IMF and the World Bank were still giving it the thumbs up. (Very often we forget that these institutions are lenders and therefore conflicted on matters debt.) A few weeks ago Donald Kaberuka, the immediate former president of the African Development Bank (AfDB) and erstwhile Finance Minister of Rwanda, dismissed as “nonsensical” any suggestion that Africa may have over-borrowed:

“The idea that Africa is drowning in debt is nonsensical . . . If we can improve on our own domestic revenue mobilization, if we can improve on our public debt management and if we can improve on our debt management capabilities, the continent is able to take a bit more debt, especially at this time when the markets are looking for yield.”

This is an interesting argument. You may also have heard it from the Jubilee administration—the problem is not too much debt; it is the Kenya Revenue Authority (KRA) that is failing to meet revenue targets.

Kaberuka, who I gather is an economist, wittingly or otherwise, fails to make the connection between the borrowing binge and the revenue problem. Only a most incurious economist would look at revenue and debt trends such as ours (see chart) and conclude that they are completely unconnected. Although I have written about the connection on more than one occasion, it is worth recapping. There are two dimensions to the connection: an accounting one and an economic one.

Let’s start with the accounting. Let’s say we start with a GDP of Sh10 trillion which is 80 per cent private economy and 20 per cent government. Let’s then say the government is raising Sh2 trillion, which is 20 per cent of GDP, in tax revenue. Suppose the government goes to China and buys a railway worth Sh500 billion on credit. The GDP will now be Sh10.5 trillion. We will be told that the economy has grown by 5 per cent. But the railway has not added anything to the economy, and nor is it paying tax, so the government still collects Sh2 trillion, but which is now 19 per cent of the Sh10.5 trillion GDP. If this is repeated every year, by year five, the GDP will have expanded to Sh12.8 trillion and the tax revenue-to-GDP ratio will be down to 15.7 per cent.

This is a purely accounting view, which assumes that government investment is neutral, neither helping nor harming the economy. This is not as far-fetched as it might at first appear. For example, it could simply reflect government investments with long gestation periods. Indeed, we have been told that the new Standard Gauge Railway (SGR) is one such long-term visionary project whose benefits will be realised by our grandchildren. But for no harm to occur, two conditions need to obtain. First, all the borrowing needs to be foreign. Use of domestic resources means diverting these from the private economy, and that is harmful. We call this crowding out. Second, there are no repayments, because repayment of foreign debt amounts to sucking money out of the economy, also harmful. Neither obtains.

Let us start with repayments. This year, we have budgeted to pay Sh139 billion ($1.39 billion) in foreign interest, a tenfold-plus increase from Sh11b ($130m) in the 2012-2013 financial year, the last year of the Grand National Coalition government. And this does not include the hefty payments of the principal on the SGR loans that kicked in this year. The use of domestic resources is also a very significant factor. Half the debt that the Jubilee administration has accumulated is domestic. The crowding out extends beyond credit. With so much money to spend liberally, trading with the government becomes the most profitable business, diverting other economic services away from, and inflating the costs for the private sector. This could not be better demonstrated than by the case of Kenya’s banking industry.

Chart 2Last year, the industry made a consolidated profit of Sh110b, and Sh119b in interest from government securities. Considering that lending to government is virtually costless and risk-free, this implies that banks made all their profits from the government, and lost Sh9b on the business they did with the rest of the economy. The contribution of interest on government securities has increased steadily from 37 per cent in 2013 to 108 per cent in 2018 (see chart). But we also see that the banks’ profitability has declined. Profits declined by 40 per cent in 2017, following the capping of interest rates in late 2016. In 2018 profits were 14 per cent lower than in 2013. If banks are not making money from the private economy, it stands to reason that government revenue will also take a hit.

How much public debt is too much?

Debt experts have sophisticated models that are supposed to tell us. These models are built around “present value.” Present value is the sum of a forecast, such as a cash flow, and in this case annual debt repayments, discounted by a rate of interest or other relevant discount factor, used to give an estimate of current worth. If two similar countries borrow the same amount of money on similar terms, one invests wisely, and the other plunders it all, the net present value of the debt will be the same. It should not surprise then that the IMF’s models were giving the Jubilee borrowing binge the thumbs-up even as the Eurobond went walkabout and one Josephine Kabura was mocking us with tall tales of cash stuffed in gunny bags.

Chart 3For the financial health of a country, a simple rule of thumb is to ensure that debt service does not grow faster than government revenue for too long. If the debt is invested productively, the investments expand the economy, the government generates more tax revenue from the expanding economy, which it then uses to service the debt. How long is too long? That is a matter of exercising sound judgement. As John Maynard Keynes famously quipped, in the long run, we are all dead. But the question becomes moot when the trend looks like what we see in the chart—debt service heading north, revenue heading south. You do not need present value calculations to see that this trend cannot go on for much longer. Sooner or later, something will have to give.

Expect to hear a lot about fiscal consolidation in 2020.

Fiscal consolidation is defined as policy measures that aim to reduce the deficit and stop the accumulation of debt. The substance of it is what we used to call structural adjustment but, following the 2007 financial crisis, it became necessary to invent a new name—it just wouldn’t do to speak of Spain, or the UK for that matter, as implementing structural adjustment.

A fiscal consolidation strategy is predicated on the expectation that governments can find ways of bringing down deficits without hurting growth. Budget deficits are, in essence, the pumping of money into the economy, which ought to stimulate growth. Conversely, fiscal consolidation amounts to withdrawing money from the economy, which would dampen growth. The problem is that economic slowdown hurts revenue, meaning that the government has to constrain expenditure even further to meet its deficit reduction targets.

The first strategy entails counteracting the contractionary effect of fiscal consolidation with expansionary monetary policy. Simply put, what the government takes away, the Central Bank puts back in circulation. The Central Bank has a couple of tools to do this, principally by buying bonds and lowering the cash ratio and liquidity requirements for the banks (the percentages of assets that banks are required to have in cash and near-cash assets such as Treasury bills and bonds). Shovelling money out of the door is also expected to reduce interest rates, which besides making borrowing attractive for businesses and consumers, can substantially lower the interest cost of domestic debt. But unlike fiscal stimulus where the government is the spender, monetary stimulus depends on market response. The policy makers hope the money will stimulate production, but it could just as well suck in imports, or leave the country to seek higher returns elsewhere, thereby depleting foreign exchange reserves and putting pressure on the currency.

The second strategy is to find “off-balance sheet” financing of public investment. The default alternative these days is the so-called public-private partnerships (PPPs). Simply put, PPPs are the public equivalent of equity financing. Instead of the government borrowing to build a hospital for instance, a private investor builds, and the government leases it. But PPPs have their drawbacks. First, to make them attractive to private investors, PPP projects are usually structured in such a way as to ensure that the investors cannot lose money—“de-risked” in financial lingo.

Second, PPPs are seldom commercially viable so, more often than not, the Government usually has to part-finance the project in order to achieve an attractive rate of return for investors. Third, PPP financing cherry picks projects with commercialisation potential, which typically will be projects that benefit more developed areas or better-off people in society. In economics, we call such policies “regressive”, meaning they transfer resources from the poor to the rich. Fourth, PPPs have a very high corruption risk—we need look no further than the stink that is the medical equipment leasing scheme known as the Managed Equipment Services (MES) project.

Another scheme is to shift debt and deficit financing from the national government’s books to quasi-government agencies, such as has recently been done by amending the law to allow the Kenya Roads Board (KRB) to issue bonds leveraged on the fuel levy revenues that are earmarked for road construction. Assuming an interest rate of, say, 12 per cent, each shilling of fuel levy revenue can be leveraged to borrow 8 shillings. Already, the KRB has published an expression of interest for transaction advisors to raise Sh150 billion. Suffice it to say that Greece used financial gymnastics of this nature to first be admitted into the Eurozone and to subsequently fake compliance.

PPPs have a very high corruption risk—we need look no further than the stink that is the medical equipment leasing scheme known as the Managed Equipment Services (MES) project

How much public finance does development require? There is perhaps no better place to benchmark than with the Asian Tigers.

Chart 4In the 70s, Thailand and South Korea were raising 13 and 15 per cent of GDP in tax revenue, well below Kenya’s 18 per cent, while Malaysia and Singapore were doing better at just over 20 per cent (see chart). But where the East Asians stand apart is that each of them was able to put at least a third of their revenue into investment. The real miracle here is how they managed to keep their recurrent budget to a maximum of 10 per cent of GDP, out of which they were also heavily investing in education. As economists Mahbub ul Haq and Khadija Haq observed, beneath the East Asian economic miracle lay an education miracle.

Chart 5It is also a miracle of public finance, specifically, public thrift. We hear a lot about the high saving and investment rate part of the story. What we do not hear about is the role of government in that story. In the early seventies, East Asian and African countries had similar national savings rates, but even then East Asian governments were contributing more to national saving and investment, although African governments’ contribution was also significant (see chart). A decade later, East Asian governments were still contributing over a third of national investment, while for African and other LDC governments this contribution fell to 11 and 6 per cent respectively. Consequently, we turned to foreign resources. By the early 80s, Africa was investing 20 per cent of GDP more than half of which was foreign-financed, while the East Asians were investing 30 per cent, 90 per cent of which was domestically financed.

In the 70s, Thailand and South Korea were raising 13 and 15 per cent of GDP in tax revenue, well below Kenya’s 18 per cent, while Malaysia and Singapore were doing better at just over 20 per cent

The East Asian experience is telling us that when people were too poor to save much, it is the government, and not foreign resources, that closed the gap between private savings and investment requirements. In economics, we postulate that saving is determined primarily by income, and investment by rate of return. As these public investments paid off, they boosted private income and consequently private saving. When countries save more, they need less, not more foreign resources to finance investment. Donald Kaberuka is telling us that we need to raise more revenue to enable us to borrow more. Is he ignorant or dishonest?

During his tenure, the AfDB became the lightning rod for infrastructure-led growth, a fallacy that this column has discussed before. In fact, the nonsensical comments echo sentiments in the AfDB’s 2018 Africa Economic Review, to wit:

“For much of the past two decades, the global economy has been characterised by excess savings in many advanced countries. Those savings could be channeled into financing profitable infrastructure projects in developing regions, especially Africa, to achieve the G20’s industrialisation goal. That this mutually profitable global transaction is not taking place is one of the biggest paradoxes of current times.”

You may want to note that the objective is to “meet the G20’s industrialisation goal.” The irrepressibly prescient Franz Fanon read in the tea leaves:

“The national bourgeoisie will be quite content with the role of the Western bourgeoisie’s business agent, and it will play its part without any complexes in a most dignified manner.”

And therein lies the rub.

David Ndii
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David Ndii is a leading Kenyan economist and public intellectual.

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The Pitfalls of African Consciousness

It took time to digest Beyonce’s Black Is King. Conclusion: it fails to deliver us. Instead, it’s just another capitalist construction of the world.

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African American imaginings of Africa often intermingle with—and help illuminate—intimate hopes and desires for Black life in the United States. So when an African American pop star offers an extended meditation on Africa, the resulting work reflects not just her particular visions of the continent and its diaspora, but also larger aspirations for a collective Black future.

Black is King, Beyoncé’s elaborate, new marriage of music video and movie, is a finely-textured collage of cultural meaning. Though it is not possible, in the scope of this essay, to interpret the film’s full array of metaphors, one may highlight certain motifs and attempt to grasp their social implications.

An extravagant technical composition, Black is King is also a pastiche of symbols and ideologies. It belongs to a venerable African American tradition of crafting images of Africa that are designed to redeem the entire Black world. The film’s depiction of luminous, dignified Black bodies and lush landscapes is a retort to the contemptuous West and to its condescending discourses of African danger, disease, and degeneration.

Black is King rebukes those tattered, colonialist tropes while evoking the spirit of pan-African unity. It falls short, however, as a portrait of popular liberation. In a sense, the picture is a sophisticated work of political deception. Its aesthetic of African majesty seems especially emancipatory in a time of coronavirus, murderous cops, and vulgar Black death. One is almost tempted to view the film as another iteration of the principles of mass solidarity and resistance that galvanized the Black Lives Matter movement.

But Black is King is neither radical nor fundamentally liberatory. Its vision of Africa as a site of splendor and spiritual renewal draws on both postcolonial ideals of modernity and mystical notions of a premodern past. Yet for all its ingenuity, the movie remains trapped within the framework of capitalist decadence that has fabulously enriched its producer and principal performer, Beyoncé herself. Far from exotic, the film’s celebration of aristocracy and its equation of power and status with the consumption of luxury goods exalts the system of class exploitation that continues to degrade Black life on both sides of the Atlantic.

That said the politics of Black is King are complicated. The picture is compelling precisely because it appears to subvert the logic of global white supremacy. Its affirming representations of Blackness and its themes of ebony kinship will resonate with many viewers, but will hold special significance for African Americans, for whom Africa remains an abiding source of inspiration and identity. Indeed, Black is King seems purposefully designed to appeal to diasporic sensibilities within African American culture.

At the heart of the production lies the idea of a fertile and welcoming homeland. Black is King presents Africa as a realm of possibility. It plays on the African American impulse to sentimentalize the continent as a sanctuary from racial strife and as a source of purity and regeneration. Though the movie does not explicitly address the prospect of African American return or “repatriation” to Africa, allusions to such a reunion shape many of its scenes. No doubt some African American viewers will discover in the film the allure of a psychological escape to a glorious mother continent, a place where lost bonds of ancestry and culture are magically restored.

The problem is not just that such an Africa does not exist. All historically displaced groups romanticize “the old country.” African Americans who idealize “the Motherland” are no different in this respect. But by portraying Africa as the site of essentially harmonious civilizations, Black is King becomes the latest cultural product to erase the realities of class relations on the continent. That deletion, which few viewers are likely to notice, robs the picture of whatever potential it may have had to inspire a concrete pan-African solidarity based on recognition of the shared conditions of dispossession that mark Black populations at home and abroad.

To understand the contradictions of Black is King, one must examine the class dynamics hidden beneath its spectacles of African nobility. The movie, which depicts a young boy’s circuitous journey to the throne, embodies Afrocentrism’s fascination with monarchical authority. It is not surprising that African Americans should embrace regal images of Africa, a continent that is consistently misrepresented and denigrated in the West. Throughout their experience of subjugation in the New World, Black people have sought to construct meaningful paradigms of African affinity. Not infrequently, they have done so by claiming royal lineage or by associating themselves with dynastic Egypt, Ethiopia, and other imperial civilizations.

The danger of such vindicationist narratives is that they mask the repressive character of highly stratified societies. Ebony royals are still royals. They exercise the prerogatives of hereditary rule. And invariably, the subjects over whom they reign, and whose lives they control, are Black. African Americans, one should recall, also hail from the ranks of a service class. They have good cause to eschew models of rigid social hierarchy and to pursue democratic themes in art and politics. Black is King hardly empowers them by portraying monarchy as a symbol of grandeur rather than as a system of coercion.

There are other troubling allusions in the film. One scene casts Beyoncé and her family members as African oligarchs. The characters signal their opulence by inhabiting a sprawling mansion complete with servants, marble statues and manicured lawns. Refinement is the intended message. Yet the conspicuous consumption, the taste for imported luxury products, the mimicry of European high culture and the overall display of ostentation call to mind the lifestyles of a notorious generation of postcolonial African dictators. Many of these Cold War rulers amassed vast personal wealth while their compatriots wallowed in poverty. Rising to power amid the drama of African independence, they nevertheless facilitated the reconquest of the continent by Western financial interests.

Black is King does not depict any particular historical figures from this stratum of African elites. (Some of the movie’s costumes pair leopard skin prints with finely tailored suits in a style that is reminiscent of flamboyant statesmen such as Mobutu Sese Seko of the Congo.) However, by presenting the African leisure class as an object of adulation, the film glamorizes private accumulation and the kind of empty materialism that defined the comprador officials who oversaw Africa’s descent into neocolonial dependency.

Black is King is, of course, a Disney venture. One would hardly expect a multinational corporation to sponsor a radical critique of social relations in the global South. (It is worth mentioning that in recent years the Disney Company has come under fire for allowing some of its merchandise to be produced in Chinese sweatshops.) Small wonder that Disney and Beyoncé, herself a stupendously rich mogul, have combined to sell Western audiences a lavishly fabricated Africa—one that is entirely devoid of class conflict.

Anticolonial theorist Frantz Fanon once warned, in a chapter titled “The Pitfalls of National Consciousness,” that the African postcolonial bourgeoisie would manipulate the symbols of Black cultural and political autonomy to advance its own narrow agenda. Black is King adds a new twist to the scenario. This time an African American megastar and entrepreneur has appropriated African nationalist and pan-Africanist imagery to promote the spirit of global capitalism.

In the end, Black is King must be read as a distinctly African American fantasy of Africa. It is a compendium of popular ideas about the continent as seen by Black Westerners. The Africa of this evocation is natural and largely unspoiled. It is unabashedly Black. It is diverse but not especially complex, for an aura of camaraderie supersedes its ethnic, national, and religious distinctions. This Africa is a tableau. It is a repository for the Black diaspora’s psychosocial ambitions and dreams of transnational belonging.

What the Africa of Black is King is not is ontologically African. Perhaps the African characters and dancers who populate its scenes are more than just props. But Beyoncé is the picture’s essential subject, and it is largely through her eyes—which is to say, Western eyes—that we observe the people of the continent. If the extras in the film are elegant, they are also socially subordinate. Their role is to adorn the mostly African American elites to whom the viewer is expected to relate.

There are reasons to relish the pageantry of Black is King, especially in a time of acute racial trauma. Yet the movie’s mystique of cultural authenticity and benevolent monarchy should not obscure the material realities of everyday life. Neoliberal governance, extractive capitalism, and militarism continue to spawn social and ecological devastation in parts of Africa, the Americas, and beyond. Confronting those interwoven realities means developing a concrete, global analysis while resisting metaphysical visions of the world.

This post is from a new partnership between Africa Is a Country and The Elephant. We will be publishing a series of posts from their site once a week.

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Fractures and Tensions in the Anti-Racism Movement

Continental Africans have a lot to learn from their African American cousins in relation to race politics and white supremacy, not least because the phases of oppression developed by white supremacists simply keep mutating.

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Sometimes tensions between continental Africans and their African American brethren mount over trivial things due to their ostensibly deep-rooted differences. But really these differences ought not be so significant as to weaken the quest to confront and defeat racism wherever it is found. The deaths of Trayvon Martin, George Floyd and Breonna Taylor are all testimonies as to why white supremacy is so toxic.

African Americans are undoubtedly best equipped to read, analyse and deconstruct white supremacy, having been on the battle lines for over four hundred and fifty years. From centuries of slavery to Jim Crow segregation, systematic lynching, civil rights activism and disillusionment and the present age of mass incarceration, African Americans have seen it all, and continue to suffer the devastating effects of living in the trenches of institutionalised racism.

Being minorities in a white-dominated United States, contained in bleak urban ghettoes that are now undergoing steady gentrification, they also have to endure the traumas of constant police brutality. They are a community under siege on multiple fronts as their neighbourhoods are being decimated by fractured and disappearing families, targeted gentrification, mass incarceration, drug abuse and despair.

During the COVID-19 pandemic, death rates among African Americans have been disproportionately higher than other racial groups and this had led to considerable public outcry. Again, their position within American society demonstrates their obvious vulnerability. They are especially vulnerable not only to disease but also have relatively few means of redress.

The #BlackLivesMatter movement has received mixed reactions within the community as many argue that it lacks grassroots support and is being sponsored by white liberal donors and sympathisers. Since the era of Martin Luther King Jr., Malcolm X, Medgar Evers, Kwame Toure (formerly Stokely Carmichael) and Huey Newton, amongst others, there has not emerged a cohort of black leaders with the vision, commitment, sincerity and energy to match those illustrious forebearers.

After the civil rights movement of the 1960s, the assassinations of Malcolm and Martin, the penetration of radical activist groups by the FBI, and the heroin epidemic that blighted black neighbourhoods, the political momentum has arguably not been sustained.

Following the gains of the civil rights movement, Ronald Reagan and Bill Clinton further inflicted harm on the black community through a series of repressive legislation that birthed the age of mass incarceration, chillingly covered by the author and academic Michelle Alexander in her bestselling book, The New Jim Crow: Mass Incarceration in the Age of Colorblindness.

The scourge of crack cocaine must also be added to this already malevolent social equation. Families and neighbourhoods were denuded of health, social services, stability and financial viability. Knowledge, wisdom, and wholesome experience were substituted with fear, paranoia and degeneracy.

Hip hop as a cultural form was in its ascendency, having managed to crawl out of the neglected borough of the Bronx. Just like funk, R&B and other black music forms, this particular genre also aspired to be therapeutic, or at least soul-lifting. For a while, it represented the angst and perplexities of the “hood”, and subsequently, the righteous rage of the bona fide political rebel. But after experiencing phenomenal success, it fizzled out in an anti-climactic tsunami of bling, bombast, shallow consumerism and toxic misogyny.

For the first time in recent memory, blacks were able to produce a music utterly devoid of soul meant to soundtrack the last days of an era indelibly marked by Babylonian excess and decadence. In South Africa, droves of no-talent copycats, seduced by the grand spectacle flashed by mainstream American hip hop, discarded their indigenous traditions and sheepishly adopted American mannerisms.

Hip hop as a cultural form was in its ascendency, having managed to crawl out of the neglected borough of the Bronx. Just like funk, R&B and other black music forms, this particular genre also aspired to be therapeutic, or at least soul-lifting.

A source of tension between Africans and African Americans is the type of black people who are admitted to the United States to live and work. Radical black Americans claim that since the supposedly unfavourable experiences of white supremacists with radicals, such as the redoubtable black pioneer Marcus Garvey, who was originally from Jamaica, and activist Kwame Toure, who came from Trinidad and Tobago, white supremacists in the US have been careful with the type of people they admit from the Caribbean and Africa. An argument is made by black American radicals that only those who readily support and uphold the tenets and institutions of white supremacy are now being admitted.

Those same black American radicals point to the fact that the first black president of the United States, Barack Obama – who is not considered a foundational black American (FBA) by any stretch of imagination – whose father was of Kenyan origin, did nothing for black folk but went out of his way to benefit the LGBTGI community and immigrants, particularly from Mexico and other countries in the region. Obama, they claim, was not accountable to black America, and did not want to be accountable because he had not been made by black America.

Kamala Harris, the current vice presidential candidate of the Democratic Party, has a father originally from Jamaica and an Indian mother. According to radical black Americans, Harris is bound to create the sort of problems they encountered with Obama. They argue that the ever-calculating white media attempts to present her as a credible political representative of black America because she apparently looks like them. But all similarities end there. The white media is trying to foist Harris upon the black electorate with claims that she attended Howard University, a historically black college. But black radicals are not having any of it.

Instead, they (black radicals) dug into Harris’s past professional conduct and discovered that as an attorney working for the state of California, she notched an alarmingly high rate of prosecutions, convictions and incarceration of black people. Indeed these frightening rates could only please white supremacists and not black folk. So black radicals claim that if she is voted into power under a Joe Biden ticket as vice president, black folk are not to expect anything better from her. Before they give her their vote and support, they are asking her for tangible deliverables.

As of this point, Harris isn’t talking. Black radicals claim the days of black political representatives receiving their vote merely because of the colour of their skin are long gone. They now preach the mantra of “tangibles” to any prospective black political representative.

On the question of political and cultural representation in the present culture of hoods created by blacks, there does not appear to be a music genre that can inspire and transform lives as in the days of yore. Policies and strategies of integration pursued by US governments (which were meant to fool everyone) in the wake of the civil rights movement deceive no one. The partiality, inequality, division and bigotry are there for everyone to see.

However, the lives and accomplishments of Nat Turner, Harriet Tubman, Ida B. Wells, Marcus Garvey and a host of other pioneers are not always accorded their rightful place in the American public mind. And only “woke” folk know the true meaning of Pan-Africanism.

Black radicals claim the days of black political representatives receiving their vote merely because of the colour of their skin are long gone. They now preach the mantra of “tangibles” to any prospective black political representative.

On the African continent, befuddled by disemboweled US hip hop culture and the hype of #BlackLivesMatter, we attempt to take hesitant steps towards the blinding glare, unsure of how to act or how we would be received. The derelict hoods of the US seem to mirror our own mismanaged and misgoverned countries, which have variously been described as failed states.

African Americans, on the other hand, are filing into Africa at encouraging rates, tracing their genetic ancestry back to the motherland, often settling permanently along the coast of West Africa, longing to ingest melanin-rich air indefinitely. Away from relatively melanin-deprived political and cultural environments, they genuflect before myriad departed ancestors in rituals of ineffable spiritual communion: “We have come home, receive us steadily into the ceaseless warmth of your unfathomable bosom.”

Lost African youth, on the other hand, see these rejuvenated American returnees and hear the conflicted sounds of Lil Wayne, Kid Cudi, Fetty Wap, ASAP Rocky and Lil Nas X and sense Eldorado, a tortuous and deadly path of escape from the Western media-created images of their insufferable hell holes.

On both sides, namely black America and Africa, mass confusion often abounds, creating expectations that remain largely unfulfilled and hungers that are unlikely to be satiated.

First, in the recent past, the Western media manufactured false narratives about the Dark Continent. Now, children of both black America and Africa often neglect to discover the real truth about their heritage, leaving them both to re-live the unimaginable horrors of their past anew, only that this time around, they are locked in mental prisons entirely of their own making.

Undoubtedly, continental Africans have a lot to learn from their African American cousins in relation to race politics and white supremacy. In this regard, a great deal of humility and restraint is required. As things stand, African Americans have too much on their plate already. The chameleonic properties of racism are remarkably protean. American society was built on the prolonged enslavement of blacks, hence the rise of American Descendants of Slaves (ADOS) activism. Then there was Jim Crow oppression and the destructive infiltration of the civil rights movement and other strategies of containment and suppression specifically targeting blacks.

Under the auspices of ADOS and its growing drive for social transformation and reparations for black Americans due to the multiple forms of suffering caused by slavery, the term African American is becoming obsolete. Black American, once fashionable and then passé, is returning as the appropriate term to call peoples of African descent in the United States. This group makes it abundantly clear that they are quite distinct from Africans and people from the Caribbean based in the US – a distinction that justifies their quest to secure the fruits of reparations. While initially it might prove to be a compact strategy for obtaining reparations, it blurs the Pan-Africanist vision and makes it arguably less potent. In this regard, ADOS, or foundational black Americans (FBA), as they now prefer to call themselves, may be viewed as somewhat shortsighted and unduly materialistic, which throws out of the window the accomplishments of the likes of W.E.B. Dubois, Marcus Garvey and John Henrik Clarke.

On the African continent, befuddled by disemboweled US hip hop culture and the hype of #BlackLivesMatter, we attempt to take hesitant steps towards the blinding glare, unsure of how to act or how we would be received. The derelict hoods of the US seem to mirror our own mismanaged and misgoverned countries, which have variously been described as failed states.

The phases of oppression developed by white supremacists simply keep mutating, refining tactile mechanisms of suppression even before their intended victims are able to anticipate them. These strategies have had centuries of experimentation to improve themselves. And then they possess false ideologies to camouflage themselves. Black resistance, on the other hand, is often reactive, kept on its hind legs, forever on the defensive due to the fact that oppressive mechanisms are constantly shifting. This is black America’s greatest challenge – to move successfully from a defensive posture to a proactive one while at the same time keeping in mind the many lessons learnt from centuries of struggle.

The Haitian Revolution, which birthed the first independent black country in the Western hemisphere, continues to be a shining example. In order to accomplish its success, it had to purge itself of its internal doubters and dissenters.

Currently, as mentioned earlier, black America has very few, if any, leaders within its ranks that possess undeniable mass appeal and grassroots support. It is also fractured by numerous ideological factions and tendencies that make it difficult to identify and pursue a cohesive agenda. Furthermore, the various institutions of racism have become more diverse and entrenched.

Nonetheless, all is not lost; true revolution has always been the art of the impossible and black America generally has proven itself, time and again, to be uncommonly resourceful and courageous.

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Time Out for the Millennium Dam?

The countries involved in the Grand Ethiopian Renaissance Dam are three of the largest in Africa and they could all benefit from coordinated action instead of belligerence and a zero-sum game.

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The African Union-led process to arrive at a conclusive agreement on the filling and subsequent operation of the Grand Ethiopian Renaissance Dam (GERD) did not yield the expected results. Negotiations between legal and technical experts from Ethiopia, Egypt and Sudan to draw up a binding document concluded without consensus at the end of August. Meanwhile, with the heavy rains, the dam has started filling up naturally.

This is a major issue around which Ethiopians have unified as the country confronts existentialist challenges to its federal polity. Sudan perhaps hopes for the best deal as it grapples with internal upheavals, a reduction in oil prices and the aftermath of its separation from South Sudan. Egypt is the most stable of the three countries but seems to be trying to reach out to Libya and possibly Ethiopia.

The reaction in Egypt and Sudan is quite different from the #It’smydam social media campaigns in Ethiopia where nationalist fervour is being stoked, with idolised singer Teddy Afro creating a new song celebrating the GERD as Ethiopia’s pride. Egypt on the other hand is focusing on getting international opinion on its side and has released a short video in several languages.

Constructed in the western Benishangul-Gumuz Region, in 2011, the GERD was initially named the Millennium Dam. Scheduled for completion in 2022, its 6.45 GW generating capacity will make it the world’s seventh largest and the biggest dam in Africa.

The White Nile and the Blue Nile meet in Khartoum in Sudan and flow into Egypt. The White Nile rises in the Great Lakes of East and Central Africa. The Blue and shorter Nile rises in Lake Tana in the Amhara region of Ethiopia and flows to Khartoum, gathering waters from the Dinder and Rahad rivers. Ethiopia had never previously tapped the Nile resources while Sudan has the Al-Ruṣayriṣ and Sannār dams on the Blue Nile. Egypt on the other hand has almost its entire economy dependent on the River Nile having harnessed it through the gigantic Aswan dam project.

Egypt opposed the GERD from the start as it felt that its share of the Nile waters would be diminished. Up until now the waters of the Nile have flowed unchecked through Sudan to Lake Nasser. Ethiopian reports indicate that the GERD will have no impact on annual flows to Egypt but this issue has yet to be resolved and even though the differences between the two countries have been narrowed down, mutual suspicion between the two populous neighbours has been revived, with Ethiopia fearing that Egypt might sabotage and undermine the project.

Moreover, both Egypt and Sudan fear that water flows will reduce to below their requirements during the dry season, negatively impacting the two countries. For its part, Ethiopia believes that it has patiently negotiated but that a common position on dry season flows is difficult to achieve. The country wants to start operating the dam as filling the reservoir may take up to five years, and considers that the dry season issues can be dealt with concurrently. And although the three countries seem to agree that , how to deal with this issue is now in contention.

The GERD project was of particular interest to the former prime minister of Ethiopia, the late Meles Zenawi, who foresaw that environmental factors would prevent Ethiopia from obtaining the support of the OECD (Organisation for Economic Co-operation and Development) countries and the World Bank. Ethiopia therefore opted to fund GERD fully from its own resources. Borrowing from the Indian example, the country issued development bonds, tapped into the diaspora and obtained small domestic contributions.

The US$4.8 billion GERD contract was awarded to Salini Impregilo of Italy. The novel fundraising contributed US$3 billion while China provided US$1.8 billion for the turbines. Ethiopia has committed nearly 5 per cent of its GDP to GERD and is therefore unlikely to want a delay or disruption in the completion of the project.

Meles had often discussed Ethiopia’s development with me when I was India’s ambassador to Ethiopia and the African Union from 2005 to 2009. He showed great interest in India’s large hydroelectric projects and we discussed the country’s engagement with its diaspora for development, Diaspora Bonds, and India’s terms of engagement with donors following the sanctions that were imposed after the 1998 nuclear tests. Our discussions on the Great Ethiopian Railway plan also focused on carbon-neutral electricity and since Ethiopia is not endowed with coal or oil (unlike Sudan and Egypt), harnessing water resources has become the country’s focus. The smaller dams on the Tekeze, Finchaa, Gilgel Gibe, Awash and Omo rivers are the trendsetters; located in the south of the country and close to Kenya, Djibouti and South Sudan, power exports are under consideration.

Ethiopians recall that Egypt has since the 4th century monopolised the use of the Nile waters and used the edicts of the Coptic Church, whose Patriarch was shared with Ethiopia until 1959, to curtail their usage. Ethiopia’s development plans include exploiting the waters of the Nile but the Nile Basin Initiative and its regional version, the Eastern Nile Technical Regional Office, have been unsuccessful in convincing the partners that the project is technically sound and beneficial to all. In 2015, the three countries signed a declaration to abide by “the spirit of cooperation”. Egypt in particular thinks this spirit is lacking; it has committed itself to a negotiated process but the caveat that “all options remain on the table” causes anxiety in Ethiopia.

Egypt seeks access to 55 bcm of water as its Nile rights in perpetuity, based on its increased share in the 1959 treaty with Sudan. The 1929 Anglo-Egypt Treaty ceded almost all Nile rights to Egypt, overlooking the rights of British colonies in Sudan, Uganda, Kenya and Tanganyika as well as Ethiopia. Technical discussions indicate a flow of 49bcm to Egypt, slightly more than the 48bcm provided in the 1929 Treaty. Ethiopia refuses to agree to a fixed figure and wants ad hoc decisions since droughts may not allow for such flow levels. It views the Egyptian stand as based on colonial treaties that were signed without Ethiopia’s agreement. Egypt is facing serious challenges due to pollution, climate factors and a growing population but it too did not consult Ethiopia when it built its giant Aswan High Dam. Technical discussions have taken place in various forums for the last eight years where Sudan has been assiduously wooed by both its neighbours. The need for a dispute settlement mechanism on technical issues remains a core concern.

In June 2018 Prime Minister Abiy Ahmed made a visit to Cairo and pledged mutually beneficial regional cooperation on the basis of scientific evidence. Although the confidence-building visit seemed to have been a success, by 2019 Prime Minister Abiy was talking of mobilisation to counter Egyptian threats. Between November 2019 and February 2020, US President Donald Trump interceded with an initiative, pursued by Treasury Secretary Steven Mnuchin, but it reached an impasse with Ethiopia leaving the final negotiations. Egypt approached the United Nations Security Council (UNSC) in June 2020 but the UNSC was informed that the AU had been seized of the matter. It is this AU effort which now needs to succeed but is faltering. Meanwhile, the US has suspended aid to Ethiopia in an effort to coerce the country to accommodate Egypt.

Ethiopia and Egypt are well placed to lead an African development process through the use of water resources for mutual benefit. An inclusive regional perspective which will bring the Nile basin countries into a sharing of knowledge and resources is vital for having sufficient water, energy, and food for all Nile Basin countries. Egypt depends on the river for 97 per cent of its water requirements and Ethiopia has invested in its future. Can the northeastern quadrangle of Africa create a new paradigm? The concept of an Eastern Development Corridor proposed by former Egyptian Assistant Foreign Minister Mohamed Higazy seeks multipronged cooperation for a development corridor with dams, irrigation, riverine transport, power distribution and access for Ethiopia to Egypt’s Mediterranean ports.

While Egypt is committed to negotiations and will seek the best possible deal, its occasional jingoism is matched by Ethiopian exhilaration. Egypt believes that the other countries have failed to restrain Ethiopia from filling the dam. This is why the country keeps returning to the UN Security Council option and, with Sudan, will play the Arab card unless the AU is able to bridge the differences.

It appears that South Africa as AU Chair is keeping the UNSC from acting until the AU effort is complete. Meanwhile it is a challenge to South Africa’s ability to keep aligned AU members whose animosity pre-dates the AU itself. Egypt’s twin identities as a member of the Arab League and as an African country are being tested. The country persuaded the League to support its stance when it went to the UNSC in June. Djibouti and Somalia, two Arab countries which border Ethiopia, did not concur fully with the resolution while Ethiopia remains critical of “blind” Arab League support for Egypt. The Arab Committee that was formed to follow up on the matter at the UNSC includes Morocco, Jordan, Saudi Arabia and Iraq, countries which now have weightier US-Israel-Arab matters at hand.

Has Ethiopia outrun Egypt as Emad Al-Din Hussein wrote in the Al-Shorouq newspaper? Or is Egypt running too fast for its own good? Its options may expand if belligerence is replaced with a more visionary approach rather than a zero-sum game. Will Egyptian calm meet with the appropriate Ethiopian response?

The countries involved in the GERD are three of the largest in Africa and they could all benefit from coordinated action. The GERD exists and will function as Ethiopia has determined. Meanwhile the mistrust is deepening as Ethiopia feels empowered to alter past equations. The dry season issue is best left to a technical committee which will monitor the real situation during every season and work on actual water flows. If trust is restored and public belligerence diminishes, the mutual interests of the three countries may be served. With their large populations and growth indicators, Egypt, Ethiopia and Sudan could be the growth segment of Africa. The immediate need is to avoid diplomatic disagreements from degenerating into physical conflict. In the medium term the three countries could be persuaded to be partners for growth and in this Kenya can play a positive role by engaging all parties, since in 2021 South Africa will cede the AU leadership to DR Congo, a country which may not have an abiding interest in the issue.

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