Friday, February 02, 2018

Post-colonial Africa

 At least 10 million of the 16 million Zambians live in poverty. The Global Hunger Index says that Zambia is the country with the third hungriest population. Hunger levels are alarming in the country, as well as in the Central African Republic and in Chad. About half of Zambia’s population and half of the people of the Central African Republic are undernourished. Last year, Gregory Chileshe of Christians Against Poverty said that the hunger is a consequence of unemployment. The ‘pangs of poverty’, he said, ‘will flatten the people to inhuman conditions’.
Zambia is not a poor country - if you look at its resources. It is the eighth largest supplier of copper to the world. Last year, Zambia produced 850,000 tons of copper, 100,000 tons more than in the previous year. The price of copper remains high. There is plenty of money to be made from this precious resource. The five copper firms that dominate mining in the country have Zambian names, but are not Zambian companies. They are owned by the Canadian firm Barrick, the Canadian firm FQM, the UK firm Vedanta, the Swiss firm Glencore as well as by China’s Non-Ferrous Metals Mining Corporation. These are major mining companies that leech Zambia of its resources and - through bribery - earn the loyalty of the pliant government. These companies declare only a fraction of their earnings. About two-thirds of their earnings are ‘mispriced’ - and the money sent off to tax havens.
In the Copperbelt Province of Zambia, 60% of the children in grades one to four cannot read.  Why is this so? Why is the country rich in resources unable to teach its children elementary skills?
The UN Children’s Agency - UNICEF - has just released a stunning report about illiteracy. It suggests that north of Zambia - from South Sudan to Niger - the illiteracy rates of children are stunning. Current the highest illiteracy rates are in Niger (76%), Chad (69%), South Sudan (68%) and Central African Republic (64%). In these countries, children cannot read nor write. UNICEF suggests that the reason is that this region has long been a site of conflict. It is true that this belt that runs across the width of Africa has struggled with wars of one kind or another. Niger, for instance, is faced with a virtual military occupation by France and the United States, whose militaries are on the ground to defend the uranium mines for French companies. War certainly creates chaos. The UNICEF report is correct in its emphasis on war. But war is not a sufficient explanation. War is itself a symptom of a much more dangerous underlying reality.
They are also in places where the nation-states have been unable - for whatever reason - to harness the resources on their own. The ruling elites in these nation-states have turned over their sovereignty to enormously powerful multinational corporations. The profits made by these firms - by the sale of Zambia’s copper or Niger’s uranium - is far beyond the GDP of these states. These companies declare only a fraction of their earnings. Global Financial Integrity studied five African countries (Ghana, Kenya, Mozambique, Tanzania and Uganda) to show that these countries lost at least $14.5 billion to such financial shenanigans. The UN’s Economic Commission of Africa estimated that the illegal financial flows out of Africa amounted to $50 billion per year. Most of this money vanishes into tax havens. The ruling elites in these African states accede to these firms often because they are bribed to turn a blind eye to the corruption of multinational companies. Transparency International suggests that the bribery amounts total around $3 billion for all of Africa. The United Nations has suggested that 99.5% of bribes are paid to African officials by non-African firms.
The ruling elites are selling the countries cheaply. The rate of return earned by Western-based resource extraction firms is considerable. Bribery certainly pays off.

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