Africa Economic challenge and question desk

[Menelik_I]

This thread is to discuss question related to Africa Economic challenges. However please keep all the imperialism bashing and bleeding hearth commentary out, I believe in adult responsibility and 50 years of ing independence is enough for some adult behaviour.

Unless specified we are talking Africa in General term and somewhat wide brush.

Can such a population be supported? This would mean either enough arable land or an economy that can afford to import food for the population. But is there enough arable land? (I'm genuinely interested, since when the population was in the high 600s my geography teacher said one day that there isn't enough food production capability to support the population to a level considered sufficient by Western standards.)

This a very important question, indeed the current increase in world wide productivity will slow down inevitably, at least until the next major technological breakthrough. When this will happen a Local increase in productivity will be needed and imperative.

There are too ways to do it, either Africa should develop a genuine market economy, thus producing goods and services Americans, Brazilians and such are willing to exchange with. This will require some serious reforms in many countries to free enterprise. The American farming lands are actually shrank in later years and there is a lot of potential in Brazil and Russia ... but like you figured out this an indirect rout

The Emergence of a strong indigenous farming industry, using all the methods that increase productivity elsewhere is needed. A good catalyst is that there are some foods that don't grow in other place, so we must plant them. Also the growth of expatried exotic food market open the door for improvements, since those expat are full of cash

However the biggest problem is institutional in many place, with unclear land property rights or complete lack them. Red tape and such is also a big issue. There is also a catch 22 problem with transportation, as many times transportation costs kills plantations.

But the overall good news is that the unused human capital in Africa is very great, also there is somewhat an over abundance of unused natural resources. The potential is great, the question is whether we can take out the road blocks.

Below is a population density map of Africa, so you can see that the place is not yet overcrowded

[torongill]

There are of course sparsely populated regions, but as far as I can see, that's Sahara, the Namibian desert and the equatorial region, although surprisingly(for me at least) the area around lake Victoria is densely populated. I just had the vague idea that somehow there were problems with arable land(Sahara advancing) and that a lot of the reasons for the fighting were rooted in the fact that good land was scarce. I sincerely hope that Africa as a whole can lift itself up. And of course as with so many other places, if the population manages to overthrow corrupt governments and/or stabilise and stop armed conflicts, development can take place. The challenges specifically for agriculture that I can see is two: some of the produce that African agriculture provides are actually unprofitable by normal means. I'm targetting specifically cacao, since I read a report on it(in some twisted way that proves the world is crazy, I found about it at a comedy site) and the reason the west can afford chocolate is that chocolate plantations are often tended by slave children. The reason is that cacao simply doesn't pay enough - the average non-slave farmer makes something around 80 cents per day. if you think about it, that means that for the farmer to make say 40 dollars per day, say 5 dollars per hour, chocolate has to become fifty times more expensive. That kinda means a Nestle Milka 100 gr will cost at least 20 Euros/dollars. And that will tranfer it from comfort food that everyone can buy to an expensive treat, which will drive the demand for chocolate down, which will make it impossible for the majority farms to operate, unless some technological miracle is waiting around the corner. And that brings me to the second point - infrastructure. Western farming is based on existing infrastructure and specialised industries located in relatively direct proximity. Manure, pesticides, herbicides are produced locally. The food and conservation industry are always close by. On top of that, farmers in the West receive subsidies from the government. and last, but not least, farmers need peace.

[Menelik_I]

I just had the vague idea that somehow there were problems with arable land(Sahara advancing) and that a lot of the reasons for the fighting were rooted in the fact that good land was scarce.

There are local scarcity in certain place and vast swap of abundant land into place, it is kind of mixed bag.

However if the economy was to ever kick start, we could see an actual expansion of arable land, by used of better agricultural methods and extensive use of irrigation. For example in mature countries like the US they even abandon arable land due to excess production and are using corn to make ethanol

A long till there, but nothing would prevent irrigation to green some regions.

Also economic growth could enable very high density cities and thus ''empty'' the interior and free more land for agriculture.

The challenges specifically for agriculture that I can see is two: some of the produce that African agriculture provides are actually unprofitable by normal means. I'm targetting specifically cacao, since I read a report on it(in some twisted way that proves the world is crazy, I found about it at a comedy site) and the reason the west can afford chocolate is that chocolate plantations are often tended by slave children. The reason is that cacao simply doesn't pay enough - the average non-slave farmer makes something around 80 cents per day. if you think about it, that means that for the farmer to make say 40 dollars per day, say 5 dollars per hour, chocolate has to become fifty times more expensive. That kinda means a Nestle Milka 100 gr will cost at least 20 Euros/dollars. And that will tranfer it from comfort food that everyone can buy to an expensive treat, which will drive the demand for chocolate down, which will make it impossible for the majority farms to operate, unless some technological miracle is waiting around the corner.

That is a pesky fact of life that in most situation there is at least of sucker benefiting from your misery it like the problem with Confederate slave owners, they were ''making money'' out of an immoral and destructive system, to the point of slowing the industrialization of the south.

There is also a a lot of bureaucratic inertia going on, for example in Ivory Coast there is a ''National Board of Cacao'', they are the ones that buy the crop from the farmers and then sell it to foreigners ... think corruption meet incompetence.

They pay the growers low prices, take a great mark up for themselves and use the money to create troubles. They also use the ''income'' of the board as guaranty of loans that they blow on ''improvements'' ... needless to say that the biggest Cocoa grower of Ivory Coast is buddy of Luarent Gbagbo.

Without this board it would have been easier for growers to transition to more profitable crops.

And that brings me to the second point - infrastructure. Western farming is based on existing infrastructure and specialised industries located in relatively direct proximity.

I somewhat disagree with the specialized industries, since in this global economy with so much extra capacity getting access to foreign fertilizers without punitive taxes would be a good start.

On top of that, farmers in the West receive subsidies from the government

See the Cacao Board above ... also unless they get the money from oil the taxations to finance the subsidies will be more destructive. It is also the nature of many African countries that the subsidies will be abused for political favour.

last, but not least, farmers need peace.

I can forgot everything if this one is at least present.

[Denny Crane!]

Trying to say that you've had 50 years of indepenence and that it is all about "responsibility" displays a wealth of ignorance on the topic so no you can't just remove all imperialist bashing from the thread to frame the question how you want it framed.

Assuming it is all just Africas problems...OK it takes two to tango but:

(channeling Ziauddin Sardar here, far better than I am)

1. Debt traps and the ensuing capital flight, the role of corps like Monsanto and these development loans

2. IMF and WTO and the influence of the US and the west on these NGOs, foreign ownership and other ties that come with IMF crisis loans.

3. Trade liberalisation, one way open access for american multinationals and businesses. The removal or reduction of barriers to international trade in goods and services like the WTO Agreement on Agriculture and other structural adjustments Programmes (SAPs) that change countries policies which force the allowance of cheap food imports while reducing and limiting support for their own agriculture. The AoA requires WTO members to reduce tarriffs on food imports by24% over a ten year period most SAPs require more liberalisation as well as demand related measures such as privatisation of state run enterprises, elimination of subsidies and price controls, and abolition of marketing boards. Ostensibly the WTO and its agreement were arrived at by consensus and with the participation of developing countries. In fact, the whole agreement was made by the US an EU. AoA has been described as an act of fraud by Oxfam which intensifies rural poverty and destroys smallholder livelihoods. It enables the US, and the EU, to export its goods cheaply to devloping countries in which farmers unable to compete are out of business. The cheap imports come from commercial channels and through dumping of food sold below the cost of production to dispose of surpluses. In Ghana, for example, local farmers are unable to get an economic price for their produce such as corn, rice, soybeans, rabbit, sheep and goats, eve in village markets. The farmers are forced to pay heavily for inputs - expensive imported fertilisers and pesticides and often seeds. Usually they recieve less for their produce. Food prices for the consumers do not fall though, rural people suffer despite increases in production and there is significant deterioration in living standards, primarily amongst the rural poor. As a result countless farmers are forced to move to already overburdened cities to eke out some form of living. Thus local agriculture is destroyed, domestic food production is shattered and the food security of the country is seriously comprimised. This can be seen all over Africa.

Ironically I heard a report today that stated that the demographic shift has now happened in Africa with as many in cities as out.

4. The 'development' of countries where technology driven business enter and caputre the market but the ability of countries to export products is inhibited and barred from US markets. People think that this is all free market but in actual fact the state is deeply involved in shutting off some trade while promoting its own corporations and interests. This is why the WTO and IMF exist and also why someone like Clinton (thats right Clinton the god of the left in the USA) shut down a good candidate from Thailand from heading the WTO.

*Andrew Simms head of the GEP at NEF

5. Tarriffs in the USA and the EU on Rice, Sugar, Coffee, groundnuts with a tarriff of 100% and of course all of this is not just Africa.

Just take a look at the history of haiti.

6. AGOA, Africa Growth and opportunity Act signed into law by GWB in 2001. Supposedly allows duty and quota free access for their products to the American market in exchange for certain concessions to the US and its firms. So what do the African countries get? The US grants access only to certain products that won't negatively affect the US, that means coffee and sugar and other things Africa would really want to export. Or lets look at AGOA duty free access to African textiles and clothing but only products using fabric and yarns produced in the US will have easy access. Products from materals in Africa will be subject to sever contraints. They can withdraw these benefits at any time and raise limits at any time. Being forced to use American raw materials means that they can't compete and so other industries are destroyed.

For doing this and getting all those benefits what does Africa have to do? Eliminate all tarriffs to US products. Open up all markets and regulation to US firms and support all trade and IP laws. Guarantee a minimum wage for child workers and not encourage anything against US foreign policy.

And hell this is scratching the surface of how we in the west are messing with Africa. I'm not saying there isn't a way out, African Countries that are getting rid of their despots are getting smart and playing fast with their trade and developing but they are fighting an uphill battle against the way the act. As long as the AU is dominated by despots like Teodoro Obiang Nguema Mbasogo and Zuma as well as all the other assorted idiots I don't have that much faith with the majority of Africa getting out from under the conditions that the West imposes upon them.

It must begin with a full understanding of the internal and external problems and as I said in another thread, it is pretty useless to discuss the Continent as a whole and do this country by country.

[Menelik_I]

Denis, if all African problem are caused by the West then this thread is worthless, by the simple fact that we cannot influence Western policies. We fought wars ... what else can we do ?

Plus the African Union is and will always be a joke, it is a Despot Tea club like the Arab League.

I'm not stonewalling your points, I responded to your PM and I will respond to this one later.

[Denny Crane!]

Well it isn't about that but if an ordinary African like yourself is to have any hope of making changes then it has to come through recognising both internal and external influences and campaigning against them, Africa is still in a position where grass roots movements can create genuine change and honestly I think a little bit of anti west sentiment would help Africa. A more detailed analysis of what proposals are coming forth from the likes of the IMF and the World Bank or the EU and the USA, which requires a degree of specialisation and skill within governments. Not sure how to achieve this but I'd say to a certain extent it is happening anyway.

Trading blocs did the Far East a world of good in terms of wealth generation and stability so it is a shame the the AU is a joke. As long as your dealing with the despots of the post imperialist age and they are dominant in Pan African Organisations that will have to wait I guess. As it is there is reason for hope, we discussed in another thread the opening of security exchanges, rapid stable GDP growth and other developments. That should lead to investment in infrastructure that breeds more growth. Time will tell.

[Menelik_I]

Well it isn't about that but if an ordinary African like yourself is to have any hope of making changes then it has to come through recognising both internal and external influences and campaigning against them, Africa is still in a position where grass roots movements can create genuine change and honestly I think a little bit of anti west sentiment would help Africa.

Anti-West sentiment is what feed trolls like Julius Malema and it is the wrong thing to do.



It seems that you overestimate the effect of the Western countries over Africa, plus you suppose that the status quo is the only thing that can exist.

Internal policies have a major effect, just have a look at Places like Hong Kong and Singapore, who have completely no weight to speak of off, but adopted policies of growth. There is around the world a wide range of Economic policies, why can't African countries choose one of those ?

Aid and IMF deals are generally bad for Africa, however they are accepted by AFRICAN politicians, so they are in part responsible for them.

I really don't which the AU or any Regional block to continue to exist, they are are Unions of Failure. African countries would gain more in bilateral lateral agreements with the willing.

How point of dissagreement is that proportion of Western Influence in Africa, which I see to be inferior to the effect of Africa domestic policies.

I live in an African country recently were on paper growth was spurring and stock exchange was being built, but after touring it I came to the horrendous realization that it was all ''Cargo Cult Economics''.

The population wasn't involved in this growth, which was in fact the elites building show off toys for foreign investors.

[Denny Crane!]

Anti-West sentiment is what feed trolls like Julius Malema and it is the wrong thing to do.



It seems that you overestimate the effect of the Western countries over Africa, plus you suppose that the status quo is the only thing that can exist.

Internal policies have a major effect, just have a look at Places like Hong Kong and Singapore, who have completely no weight to speak of off, but adopted policies of growth. There is around the world a wide range of Economic policies, why can't African countries choose one of those ?

Aid and IMF deals are generally bad for Africa, however they are accepted by AFRICAN politicians, so they are in part responsible for them.

Well yes but it is only by understanding the damage that they do that you understand enough to tell the IMF etc. to off!

I really don't which the AU or any Regional block to continue to exist, they are are Unions of Failure. African countries would gain more in bilateral lateral agreements with the willing.

How point of dissagreement is that proportion of Western Influence in Africa, which I see to be inferior to the effect of Africa domestic policies.

I live in an African country recently were on paper growth was spurring and stock exchange was being built, but after touring it I came to the horrendous realization that it was all ''Cargo Cult Economics''.

The population wasn't involved in this growth, which was in fact the elites building show off toys for foreign investors.

It will always be that way in the early stages of economic growth but as business grows so will infrastructure investment and tax receipts and the demand for skilled workers. People say the trickle down effect doesn't work but I prefer to talk more about demand and supply and that applies to Labour as much as produce. Having something to invest in and demand for labour will stop capital flight and result in less brain drain. It might not be obvious at first but this is a good thing.

[Menelik_I]

Well yes but it is only by understanding the damage that they do that you understand enough to tell the IMF etc. to off!

You will never see someone more willing to say you to the IMF than me ... by the way have read Africa Betrayed of Attyete about how the first generation of African Leaders blew off ? Combine that with Reading Dambisa Moy Dead aid and you will be equally pissed off

It will always be that way in the early stages of economic growth but as business grows so will infrastructure investment and tax receipts and the demand for skilled workers. People say the trickle down effect doesn't work but I prefer to talk more about demand and supply and that applies to Labour as much as produce. Having something to invest in and demand for labour will stop capital flight and result in less brain drain. It might not be obvious at first but this is a good thing.

What is big for big business is not always good for the population, especially if Elites = Big Business.

The best way to prevent both Brain and Capital flight is to let them work and invest in their own countries ... thing that Crony Big Business friendly policies will inevitably.

Plus more than growth, a genuine free market would provide people with the dignity of being able to work and have dreams. Managed growth might seem ''good'', but what good are they if they include killing the spirit of the population ?

There is a lot of entrepreneurial spirit going around, maybe the local thugs should stop interfering for a change.

[Dr. Croccer]

Step one would to introduce protectionist measures in many countries to halt the destruction of local agriculture and the dependence on foreign products which is crippling many African countries due to free trade (which is really just a one-way road of Western exports and exploited African resources at a terrible rate for the locals). The problem with Africa is that it's heavily dependent on the rest of the world. What economic road Africa will take lies more in the hands of Westerners (and, increasingly, Asians) than in those of Africans themselves, sadly.

[Denny Crane!]

You will never see someone more willing to say you to the IMF than me ... by the way have read Africa Betrayed of Attyete about how the first generation of African Leaders blew off ? Combine that with Reading Dambisa Moy Dead aid and you will be equally pissed off

Heard of them, I'll add them to my reading list.

What is big for big business is not always good for the population, especially if Elites = Big Business.

The best way to prevent both Brain and Capital flight is to let them work and invest in their own countries ... thing that Crony Big Business friendly policies will inevitably.

Plus more than growth, a genuine free market would provide people with the dignity of being able to work and have dreams. Managed growth might seem ''good'', but what good are they if they include killing the spirit of the population ?

There is a lot of entrepreneurial spirit going around, maybe the local thugs should stop interfering for a change.

Big business in Africa wouldn't be such a bad thing if it was African Big Business. Free trade would equally be good if the rest of the world was willing to play nice.

Step one would to introduce protectionist measures in many countries to halt the destruction of local agriculture and the dependence on foreign products which is crippling many African countries due to free trade (which is really just a one-way road of Western exports and exploited African resources at a terrible rate for the locals). The problem with Africa is that it's heavily dependent on the rest of the world. What economic road Africa will take lies more in the hands of Westerners (and, increasingly, Asians) than in those of Africans themselves, sadly.

For once I'm not going to disagree with you except for the use of the word free trade, what we have is a one way protectionist culture in favour of the west. In that scenario the only smart thing for Africa to do is to start getting tough with its own protectionism perhaps by playing the east against the west? I can imagine that by bargaining the USA against China and the EU they might make some headway.

[Menelik_I]

Big business in Africa wouldn't be such a bad thing if it was African Big Business. Free trade would equally be good if the rest of the world was willing to play nice.

At the very least if Africa Countries had an internal Free market economies and signed free trade agreement with the Willing they would make good progress.

You will never achieve these thing by one big stroke, it is only possible by piece meal bilateral agreements and long periods.

Step one would to introduce protectionist measures in many countries to halt the destruction of local agriculture and the dependence on foreign products which is crippling many African countries due to free trade

What Free trade are you talking ? Most African countries already have steep protectionism, Kenya tried this heavily complete with Local ''substitution'' factories and it never worked.

In fact they even had a deal with GM by which no car would be imported and that people would only buy the GM cars ... they had a shortage of cars pretty soon.

One of the point people miss with Free Trade is that it also applies to Tools and Machinery, there is a lot of under utilized equipment in Europe, US and Asia which could can't be cheaply imported in Africa to be put in good use.

[Dr. Croccer]

For once I'm not going to disagree with you except for the use of the word free trade, what we have is a one way protectionist culture in favour of the west..

I.e., free trade in Africa only, protectionism outside of it. Africa is experiencing a very bad economic situation. Foreign companies using it as a playground for all kinds of 19th century-ish practices and imports beyond exploited resources largely non-existant.

It's the very worst of capitalism within Africa, and the fatal lack of it outside of Africa.

In fact they even had a deal with GM by which no car would be imported and that people would only buy the GM cars ... they had a shortage of cars pretty soon.

Last I checked GM wasn't a local African company. This isn't protectionism to support the local economy, it's monopolisation of a sector to appease a foreign corporation which has far too much influence evidently. Again, this is the kind of 19th century practice that is horribly ing up Africa, along with Western protectionism.

[Menelik_I]

Last I checked GM wasn't a local African company. This isn't protectionism to support the local economy, it's monopolisation of a sector to appease a foreign corporation which has far too much influence evidently. Again, this is the kind of 19th century practice that is horribly ing up Africa, along with Western protectionism.

The cars were manufactured in Kenia by teh GM subsidiary.

Plus even if it was an African Company it would have had exploited the local population the same way. Whether the boat kicking your balls is European or African, the result is the same.

[Dr. Croccer]

The cars were manufactured in Kenia by teh GM subsidiary.

Plus even if it was an African Company it would have had exploited the local population the same way. Whether the boat kicking your balls is European or African, the result is the same.

At least the money would've been going in the hands of Africans, who could invest it in other local enterprises. Of course companies kick the balls of the locals, they've done so for hundreds of years. We don't have that so much in the West now because the people objected to it. States became more democratic and the economies became less stagnant and monopolised as well. We gradually grew out of it. You can't have the necessary reforms for an enlightened state and economy without there being any power for it. If the companies are in foreign hands and have a lot of influence, local opinion is often meaningless. India kicked out Coca-Cola only to invite them back in a few decades later because they had no local companies to replace them. An African society would have far more control of and benefit from an African company.

[Exarch]

besides egypt, where are the arable and richest areas of africa in terms of agriculture?

[Menelik_I]

besides egypt, where are the arable and richest areas of africa in terms of agriculture?

I want to answer ... but you are Chinese so this might be for nefarious Purposes

Most of the Wet&Dry Zone has a lot of Arable land, Congo Basin, Niger Basin, Limpopo Basin, Zimbabwe and West Africa coastal Area is very fertile too.

There is still lots of potential for fruit potential Arid areas with proper irrigation.

[Exarch]

I want to answer ... but you are Chinese so this might be for nefarious Purposes

hush you,
soooon my pretties, Muahahahahahahhahahahaha!!!!

Most of the Wet&Dry Zone has a lot of Arable land, Congo Basin, Niger Basin, Limpopo Basin, Zimbabwe and West Africa coastal Area is very fertile too.

There is still lots of potential for fruit potential Arid areas with proper irrigation.

arable land means more crop production and they can support more ppl, meaning more economic growth
a free trade area in africa might even help allow for more peace

[Menelik_I]

hush you,
soooon my pretties, Muahahahahahahhahahahaha!!!!

arable land means more crop production and they can support more ppl, meaning more economic growth

you are right, current problem is under utilization of land, proper modern Farming exist mostly in South Africa and existed in Zimbabwe, if the rest of the land is put to such use it would do exactly that

a free trade area in africa might even help allow for more peace

This ain't happening soon unfortunately, the AU is a piece of crap and bilateral trade agreements would be better.

[Salem1]

I wonder if simply recreating a western society is a good idea... it's not like we're living in paradise here either. I think (or more accurately wish) Africa can serve as an experimental ground while there is still room to work with things. How do you avoid epidemic depression and cultivate a healthy society for example? I wouldn't be so quick to equal economic growth etc., numbers on a chart, with increased ''quality'' of life which really has nothing to do with such things. It's a fake goal even if it creates comfort.