With its two-trillion-dollar economy, recent discoveries of billions of dollars worth of minerals and oil, and the number of investment opportunities it has to offer global players, Africa is slowly shedding its image as a development burden. "While global direct investment has shown some decline, dropping by 18 percent in 2012, in Africa foreign direct investment rose by five percent," Ken Ogwang, an economic expert affiliated with the Kenya Private Sector Alliance (KEPSA), which has a membership of over 60 businesses, told IPS.
"Underhand dealings in the mining of diamonds and other rich minerals
here have fuelled poverty." -- economic analyst, Jameson Gatawa
Since 2012, Kenya has made a series of mineral discoveries, including
unearthing 62.4 billion dollars worth of Niobium - a rare earth
deposit. The discovery in Kenya's Kwale County has made the area among
the world's top five rare earth deposits sites, and allows Kenya to
enter a market that has long been dominated by China.
In 2012, Kenya discovered 600 million barrels of oil reserves in
Turkana county, one of the country's poorest regions. It was announced
on Jan. 15 that two more wells struck oil, increasing estimate reserves
to one billion barrels of oil.
But Kenya, East Africa's economic powerhouse, is not the only African nation that has made fresh mineral discoveries.
"The recent boom in new mining discoveries in countries such as
Niger, Sierra Leone and Zambia will attract billions in foreign direct
investments. Other countries like Mozambique, Tanzania and Uganda will
similarly attract billions due to petroleum discoveries there," Antony
Mokaya of the Kenya Land Alliance, a local umbrella network of NGOs and
individuals working on land reforms, told IPS.
Last year, both Uganda and Mozambique discovered oil. In 2006, an
estimated two billion barrels of oil reserves were discovered in western
Uganda, but last year's discovery brings Uganda's total oil deposits to
3.5 billion barrels. Mozambique's first oil discovery last year is
estimated to be 200 million barrels.
Ogwang predicts that these discoveries will soon see African
countries dominating the list of the 15 fastest-growing economies in the
"More African countries, Kenya being a model example in East Africa,
now favour a market-based economy, which is highly competitive and the
most liberal economic system.
"In this system, market trends are driven by supply and demand with
very few restrictions on who the actors are. [It is] a favourable
environment for foreign investors," he said, referring to the local
mobile phone industry, which has been dominated by foreign investors
because of its favourable regulatory policies.
"As a result, growth in this sector is phenomenal. In the first 11
months of 2013, Kenya's mobile phone money transactions were 19.5
billion dollars, which is more than the country's current
18.4-billion-dollar national budget."
Ogwang says that even more importantly, African countries are increasingly strengthening their partnerships with the East.
Statistics by the Africa Economic Outlook, which provides
comprehensive data on Africa economies, show that China is the largest
destination for African exports, accounting for a quarter of all
Trade with Brazil, Russia, India and China - the economic bloc
referred to as BRICs - now accounts for 36 percent or 144 billion
dollars of Africa's exports, up from only nine percent in 2002.
In comparison, Africa's trade with the European Union and the United States combined totals 148 billion dollars.
But Terry Mutsvanga, director of the Coalition Against Corruption, an
anti-corruption lobby group in Zimbabwe, cautioned that Africa will
first have to rein in its corrupt politicians before its resources can
enrich its own people.
According to the World Bank, some of the world's poorest people live
in Africa, with one out of two Africans living in extreme poverty.
"Without Africa dealing with the cancer of political corruption
blighting the continent and robbing it of revenue from mineral resources
through corrupt politicians receiving bribes from investors ... the
continent shall [continue to have] the worst poverty levels globally,"
Mutsvanga told IPS.
Independent economic analyst Jameson Gatawa from Zimbabwe agreed.
"Underhanded dealings in the mining of diamonds and other rich
minerals here have fuelled poverty. The rich are getting richer with the
poor becoming poorer," Gatawa told IPS.
For 54-year-old Sarudzai Mutavara, a widow who lives in the midst of
Zimbabwe's Marange diamond fields, poverty remains a daily reality.
Zimbabwe is one of the world's top 10 diamond producers. But six out
of every 10 households in Zimbabwe, a country of about 13 million
people, are living in dire poverty. This is according to a 2013 poverty
assessment report by the Zimbabwe National Statistics Agency.
"Here in Marange, the diamond wealth has not [helped] in any way to
change our lives for the better, but rather for the worse as we have
strayed further into poverty," Mutavara told IPS.
The Democratic Republic of Congo (DRC) is another African country
rich in diamonds, with its mineral wealth estimated in the trillions of
dollars. But according to the United Nations, about 75 percent of its
people live below the poverty line.
More than half of these have no access to drinking water or to basic
healthcare. Three out of every 10 children are poorly nourished, with up
to 20 percent of them predicted to die by the age of five.
While Ogwang says Africa's best economic years are yet to come, it
remains to be seen if the billions of dollars Africa has in natural
resources will trickle down to people like Mutavara.
Commentary and analysis to persuade people to become socialist and to act for themselves, organizing democratically and without leaders, to bring about a world of common ownership and free access. We are solely concerned with building a movement of socialists for socialism. We are not reformists with a programme of policies to patch up capitalism.
- Burkina Faso
- Cape Verde
- Central African Republic
- D.R. Congo
- Equatorial Guinea
- Guinea Bissau
- Ivory Coast
- São Tomé and Príncipe
- Sierra Leone
- South Africa
- South Sudan
Sunday, January 19, 2014
The Rich Get Richer But Few Signs Of Trickle-Down
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