Tuesday, February 25, 2014

Promises ...always promises

Soaring economic growth in many African countries is coming at the expense of the poor, according to a new report, ‘Africa Rising?’ Despite a decade of high growth across the continent, the wealth created is not being equally shared and so progress in human development in Africa has been disappointingly limited, according to the report by Christian Aid and Tax Justice Network-Africa.

But the growing gap between rich and poor is not simply the result of the rich getting richer, the authors say. They also point to money escaping offshore in illicit flows as well as tax systems that are failing to redistribute wealth and in some cases even disadvantaging the poor.

“Inequality has been exacerbated by the growth model in many countries which has seen a concentration of income,” said Alvin Mosioma at Tax Justice Network-Africa. “It also reflects the inability of governments to tax the proceeds of growth, either because so much is given away in corporate tax breaks, or has escaped offshore into tax havens. Until tax dodging is tackled effectively, nationally and internationally, and illicit finance flows from the continent halted, economic inequality will continue to rise.”

Standard Chartered said that the 16 percent annual increase in African revenue in the past five years is “sustainable.” Viswanathan Shankar, chief executive officer for Europe, the Middle East, Africa and the Americas  of the London-based bank explained “There is huge interest in Africa; it is a continent of hope and of rising world interest,” Shankar said. “If you look at World Bank data 7 of the top 10 fastest-growing economies over the next 10 years are projected to be in Africa.”

Standard Chartered was the biggest arranger of syndicated loans in sub-Saharan Africa in 2013, its deals included raising $3.25 billion in a seven-year term-loan for Nigerian billionaire Aliko Dangote’s Dangote Industries Ltd. and $1.99 billion in three- and five-year financing for Aspen Global Inc., a Mauritius-based company with interests in medical products. Standard Chartered’s operating profit from Africa grew 9.8 percent in the first half of 2013 to $357 million, while revenue climbed 16 percent to $853 million, making up 8.7% percent of overall income. Growth in Africa will be led by Nigeria, Ghana, which has a history of good economic and political governance, Kenya and Angola and the increasing use of financial products like bonds, loans and mortgages.

Meantime while the financial sector boasts of promising profits in the future a lack of electricity continues to be a major problem in parts of Africa. According to the Washington Post, only 14 percent of people get any electricity at all in Tanzania, and across sub-Saharan Africa, nearly 590 million people lack access to power. This problem has had severe effects. Indoor air pollution from wood stoves kills 3.5 million people per year, more than AIDS and malaria combined.

The legacy of Belgium’s empire left just a few dozen Congolese university graduates and an economy built chiefly to supply Belgium with raw materials. Even today, there is just 2,000 km (1,250 miles) of paved road in a nation the size of Western Europe. Millions of Congolese are estimated to have died and the country was decimated between 1885 and 1908 after King Leopold II declared Congo his personal property. The king's troops were ordered to collect the hands of victims, often shot for resisting slave labour, to prove they had not wasted bullets. Leopold even imported Congolese for a human zoo to show life in the country he never visited.
Adam Hochschild, author of "King Leopold's Ghost" describes Leopold's unrestrained plunder of Congo, told Reuters he has been surprised at many Belgians' ignorance of what happened in colonial times. Belgium may not be the power it once was, but its people are among the richest Europeans. Much of that prosperity can be traced to the colonial past, when the country stood among the globe's most successful trading economies. Over the first six decades of the 20th century, ivory, rubber, copper and diamonds all flowed from Africa to Belgium. The royal family's wealth is reflected in its sprawling palace, extended by Leopold and modeled on Versailles.
In the more than half-century that Belgium ran Congo from 1908 to 1960, hundreds of thousands of Belgians worked there in everything from business to colonial administration yet exports from Congo were little more than 280 million euros last year.

Promises turn into lies if they are not kept. It is too easy to come up with an impressive list of things to do, knowing too well that it's just a pipe dream that will fizzle out. For far too long citizens have fallen for those with the rhetoric and have paid dearly. The time has come to interrogate what they say to us. It does not help democracy or our future if we allow politicians to continue making promises they won't honour. We have been told how millions of our people will be employed and how corruption will be squashed, but all the talk is short on detail. In the global world in which we live, it is imperative that we look beyond our borders.

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