Tag: Development

Rethinking African infrastructure: investing in the small for big results

The Africa Development Bank estimates that Africa needs as much as 175 billion US dollars a year by 2025, to close the infrastructure gap, which is cited as a significant constraint on its growth.

The notion of the infrastructure gap has driven African governments to borrow and spend billions on roads, railways airports, dams, and other large, ambitious infrastructure projects. However, this binge of infrastructure is starting to be questioned and rightly so. The continent is dotted with shiny infrastructure projects which are struggling to justify themselves as they have not created the growth, employment, revenues and development promised. Many have been vehicles for corruption and have burdened taxpayers with enormous debts which we are struggling to repay.

Much of this large infrastructure is built on the “build it and they will come” principle. That these huge projects will attract investment, industry and generate economic activity that will ensure that they can pay for itself. It is time to rethink this approach. Does Africa need Infrastructure, yes, however we need to rethink our approach to infrastructure. Investing in “small” infrastructure, that provides immediate benefits to citizens and drives quality of lie and economic development. Rural roads, urban roads, last mile internet and electricity connectivity, pedestrian infrastructure, community healthcare infrastructure, warehousing, and cold storage.

Build it for those that are there.

On May 31st, 2017, President Uhuru Kenyatta opened the first phase of the largest infrastructure project in Kenya’s history, christening it the ‘Madaraka Express’. It was the Chinese built Standard Gauge Railway (SGR) which parallels the old colonial line from Mombasa on Kenya’s coast through the capital Nairobi to Lake Victoria and on into Uganda. President Kenyatta hailed the railway as a developmental gamechanger stating that ‘Large and vibrant towns will grow along its length, new factories and hotels, and service businesses will employ hundreds of thousands of young people. Farmers will earn more as their produce makes its way to buyers faster and cheaper’. Not only has none of this come to pass, but the railway has also been losing money and bleeding the country dry with debt payments. In the 2021-22 financial year the railway reported an operating loss of 31 million US dollars while the country made 209 million dollars of debt payments for the railway.

Across the continent this tale is repeated mega infrastructure projects, justified as the foundation upon which Africa’s future development will be based. Mega railways, airports, ports, dams, and power stations, that will kickstart manufacturing industries, transform large scale agriculture and make the continent more attractive to investors. These projects, by and large have not done so, instead becoming a drain on the public purse, threatening critical services and other development projects as we try to pay back loans.

It is clear from the mess that many of us have gotten ourselves into, that Africa needs to rethink the “build it and they will come philosophy” for how it invests in infrastructure, and the type of infrastructure it invests in.

Thinking small: Rural Roads, warehousing, pedestrians, and the last mile.

What small infrastructure should African governments be investing in. It should be small infrastructure that enhances the productivity and growth of the majority of livelihoods in the economy. It should infrastructure that improves the daily lived experience of citizens. It should be infrastructure that drives the growth of local economies and industries. And there are a number of options that would serve one or more of these objectives.

  1. Rural Roads

Much of the mega-infrastructure investment on the continent has focused on transcontinental highways meant to spur intra-African trade, expressways to beat the traffic menace in cities and superhighways for national prosperity. However, most African countries remain primarily agricultural economies. ‘Agriculture employs approximately 65–70% of the African workforce, supports the livelihoods of 90%of Africa’s population, and accounts for about a quarter of the continent’s GDP’[1]. Enhancing rural transport networks will improve access to markets, particularly for small farmers allowing them to get their produce to market quicker and cheaper. It will reduce the cost of getting goods and services to rural communities and make travel to regional centres easier. All critical to improving opportunities and livelihoods for local communities.

  1. Warehouses

This is a subject I have written about previously, certified warehouses that can properly store agricultural goods, would reduce post-harvest losses. Africa loses approximately 100 million tonnes or $4 billion worth of food to post harvest losses. If not lost that food would reduce the cost of food, improve availability and boost incomes throughout the value chain from farm to fork. Proper storage would save lot of this food. Beyond just improving food supplies, certified storage would improve farmer access to credit and markets as certified storage is the foundation of commodities exchange systems.

Beyond agriculture, certified warehouses with refrigerated facilities would enable the provision of healthcare by enabling the storage of medicines and vaccines that can then be distributed to local facilities or clinics at short notice.

  1. Small urban infrastructure

Infrastructure in African cities is a perennial problem, causing epic traffic, hurting businesses, and creating unfortunate living conditions for many. What this requires isn’t investments in superhighways and expansive public transport systems, but people focused infrastructure. As previously written, “78 per cent of Africa’s population commutes by foot and on bicycles every day,[2]”. Investing in sidewalks, footbridges, cycle lanes, road crossings, footpaths etc. will save lives and make the lives of millions of people easier.

Second investing in “aesthetic” infrastructure such as parks, streetlights, signage, and street markings. This may seem frivolous, but it serves a purpose, people need green spaces for their mental and physical well-being, well-lit and marked streets enhance safety, service delivery and facilitate businesses. Improving the liveability of cities by investing in small urban infrastructure will serve to improve quality of life and the business environment boosting urban economies.

  1. The last mile

The last mile can be broadly defined as the final stage of a network or transportation network before its final destination. It is the fibre cable that brings internet to individual buildings, the electricity line that connects homes to the grid, the telco tower providing cell service and the road leading to your front gate. Investment in the last-mile is about making sure those that would be bypassed by dispassionate cost-benefit analysis. This investment in the last mile does not mean governments must spend billions building power cables and fibre lines. Innovative structures, such as Kenya Universal Service Fund, which uses funds from fees and levies paid by telecommunications companies to fund the building of infrastructure and provision of services in underserved areas. This is why Kenya has 98%[3] of the population covered by a mobile network, which in turn has opened access to mobile money and internet services making Kenya a global digital leader.

Conclusion: building small to enable the big

People often talk about Africa’s fundamentals (large young population that is underserved market), when making the case for large investor attracting infrastructure. However, what they forget, is that those fundamentals will remain theoretical unless those people have livelihoods and growing incomes. Shifting infrastructure investment to serve those people and create those incomes is a much more powerful magnet for investment than any argument based on theoretical potential.

African leaders spend a lot of time talking about the Asian Tigers and the extraordinary economic growth. What they often fail to mention is that those countries, invested in creating domestic demand growth by improving the incomes of their populations. Through land reform, education and strategic investment, they created the domestic demand that provided the base upon which their industries could grow. Investing in people and local economy focused is one of those strategic investments.

For Africa, investing in enabling “small” infrastructure, that improves people’s lives and livelihoods shall do more to boost our economies than massive billion-dollar projects aimed at theoretical investors for potential future growth. Boosting domestic livelihoods, incomes and demands is self-reinforcing, it creates demand which local industries can respond to and that investors want to tap into. Which will, in future, justify infrastructure mega projects that are built to support real economic development.

 

[1] Africa Development Bank, https://www.afdb.org/fileadmin/uploads/afdb/Documents/Publications/AEB_Volume_8_Issue_3.pdf

[2] UNEP https://www.unep.org/news-and-stories/press-release/better-infrastructure-and-policies-can-protect-billion-african

[3] Kenya National Bureau of Statistics, 2023 Economic Survey, p.303

2023 from an African policy perspective: opportunities amidst global headwinds and risks.

There is an old joke about Russian history, that every chapter ends with the sentence “and then it got worse.” Its an apt joke when thinking back on 2022 and looking ahead to 2023. In large part because Russia making things worse has been a feature of the last 12 months and will continue to be so in 2023.

From an African perspective, 2022 was a tough year. Just as the world was opening up and getting control of the Coronavirus, Russia invaded Ukraine sparking off a geopolitical and energy crisis, stoking already rising inflation to alarming levels. This prompted western central banks to respond by raising interest rates and the value of the dollar soared, hurting Africa by increasing the cost of all imports, fuel and food included.

And then it got worse.

2023 will be another tough year in many respects. Inflation, energy turmoil, China’s economy will not prop up the global economic growth and, geopolitical competition between the US, China, and Russia will continue play out in Africa.

Thus, policy makers on the continent must navigate these global headwinds. However, as I have written about before, there is opportunity in crisis and if policy makers on the continent are brave enough and imaginative enough, a bleak global picture can be turned into one of green shoots for Africa.

The Economy – growth can be found

The economic challenge facing Africa this year is not to be envied. Inflation will continue to be a significant problem across most economies continuing to make food, fuel, electricity and other necessities more expensive straining households and businesses alike. Debt crises already in progress in Ghana and Zambia are likely to spread to other countries on the continent who have over borrowed and spent irresponsibly. Sluggish global growth (or recessions) will drag down growth on the continent. Add to this Africa’s two largest economies, Nigeria, and South Africa, will be focused on two general elections.

Thus, policy makers have two goals. First, to navigate a tough economic environment. This must involve blunting inflation through a combination of short-term interventions that protect citizens and business from the worst impact and long term strategies to fix structural issues that make Africa vulnerable to imported inflation (you can read a more detailed analysis here). Second is the debt problem, like Zambia, countries at risk of debt crises must proactively engage their creditors, and bond holders to get ahead of crises and maintain confidence in their economies and if possible, get some debt forgiven or terms changed to make their payback less burdensome. In addition long term debt frameworks should be put in place to end the cycle of debt accumulation, crises, begging, and forgiveness, otherwise, in another decade we will be back in the same place. Finally, the need to cut unnecessary spending and combat corruption is obvious but I will not spill any more ink on the subject.

The second economic imperative is to find growth, and this is where imagination and boldness is needed. If growth is not going to be driven by the global economy, borrowing or government spending we must find it with innovative policy home, domestically and regionally, and there are a number of strategies that can be employed.

  • On the regional front, this is the perfect opportunity to double down on the African Continental Free Trade Agreement (AfCFTA), to build continental trade links that can be alternative source of growth. If this is aligned with the strategic investments in areas like warehousing  intra-African trade could be significantly stimulated.
  • An area of untapped potential is tax reform. Our complex, badly policed tax systems leak revenue and offer opportunity for corruption. Reforming our tax systems and moving towards an African multinational tax consensus could unlock revenues for governments and unleash the potential of African business.
  • Reforming domestic credit policies to unlock lending to MSME’s and small farmers could unlock the significant potential of Africa’s small businesses and small farmers that could drive employment, business growth and agricultural productivity.
  • Finally, International capital markets will be distorted for some time with many unwilling to invest in Africa. It will thus be important to put in place policies that encourage domestic investors (e.g., pension funds, mutual funds, etc) to engage with and invest in African businesses and commodities.

Global economic conditions will be unfavourable for some time. However, I firmly believe that should not hold Africa back. With intelligent and creative economic policy, Africa can stoke growth in its domestic and regional economies.

Geopolitics – wary opportunity

This is a subject I have written on previously. The world is changing, the USA is more focused on competition with China and containing Russia, and this great power competition will be played out on the continent as well. The EU and Britain are concerned with solving domestic issues such as immigration and energy access and this will shape their approach to Africa. And there is rise of regional powers (India, Japan, Brazil, turkey, Australia, Saudi Arabia etc.)  who will all be interested in expanding their relationships with the continent.

From a geopolitical perspective, Africa first must be wary. During the cold war we became a playground for superpower competition and that cannot be allowed to happen again, African interests must come first, adventurism must be resisted.

However, this also opens opportunities. If we can understand the interests and goals of various geopolitical players, we can use that to our advantage where interests are aligned. For example:

  • As the US and West seeks to diversify its supply chains and sources of raw materials outside of China, Africa could use this to attract investment into alternative industrial supply chains in Africa, and better deals for raw materials especially the rare earths, cobalt, and lithium critical for electronics.
  • Deeper engagement with the middle powers and attracting their investment could give Africa an alternative source of investment outside of China and USA and dilute their influence.
  • Strategically leveraging the fifty-four votes at the UN and other global bodies could be used to put African voices in strategic places (the UN security council, G20, COP, IMF etc.) to help shape the global agenda.
  • Critical issues, like immigration in Europe or the need to offset carbon emission in the middle east or Australia can be used to leverage investment in critical areas on the continent. E.g., immigration can be stopped with job creation, or carbon emissions could be offset by green energy in Africa. Where can the funding for that come from?

2023 – tough but doable

2023 will be a tough year not just for Africa but the world. This is should not be an excuse for a lack of progress and development on the continent. We must use our own agency and through policy. With intelligent, forward looking and sometimes creative policy, we can achieve positive results despite an unfavourable global environment. In crisis and adversity there is opportunity, it is time for Africa to start taking advantage of those opportunities and 2023 is the perfect time to do so.

Using Africa’s black gold to fund a green future 

“Stabilizing the climate will require strong, rapid, and sustained reductions in greenhouse gas emissions, and reaching net-zero CO2 emissions.” highlights IPCC Working Group I Co-Chair Panmao Zhai.  

The latest Intergovernmental Panel on Climate Change (IPCC) report makes for sober reading. The climate crisis is unequivocally caused by human activities and is affecting every corner of the planet’s land, air, and sea already. The fact sheet on Africa does not make for pleasant reading we will experience more heatwaves, more floods, more unpredictable weather, and more extreme weather events. The whole continent is vulnerable, our largely rain-fed agriculture, underdeveloped infrastructure, existing inequalities, and poverty will all amplify the impacts of climate change that are now certain.  

In a previous article, I advocated that we use climate change as an opportunity to harness science and technology and equip our farmers with tools to feed the continent in an era of shifting weather patterns. To leapfrog fossil fuel energy and lay the foundation of Africa’s economic and social development on green sustainable energy. 

This is still the case; however, not only must Africa innovate to mitigate the impacts of Climate change on the continent, but we also must fund it. The global commitment to provide US$ 100 billion a year is falling woefully short. Furthermore, as the Coronavirus pandemic has shown, when crisis strikes, Africa is left to fend for itself. As the impacts of climate change become more pressing and deadly, the rich world will focus increasingly on solving their own problems just as they have done with Covid vaccines.  

Thus, Africa must develop a financing strategy not based on the generosity of the rich world, the philanthropy of global billionaires, the whims of development banks or the iniquity of global markets. To do that Africa will have to make use of its own resources, and, in a delicious irony, Africa’s black gold, the oil, gas and coal can be used for this purpose. Not by burning it or digging out of the ground and selling it. But, by leaving it where it is and selling it as a carbon offset.  

The Financing Dilemma  

Because developing countries would be hardest hit by climate change yet have the least resources to invest in mitigation measures or invest in clean energy and sustainable solutions to our development needs. The developed world committed to mobilizing the finance necessary to do this. As a result, at COP16 the developed world agreed to an Accord, that states that: “developed country Parties commit, in the context of meaningful mitigation actions and transparency on implementation, to a goal of mobilizing jointly USD 100 billion per year by 2020 to address the needs of developing countries”.  

This goal has never been met. And with the impacts of the Coronavirus pandemic and the resources devoted by the developed world to their own needs, I am not hopeful that funding will materialise. Furthermore, the financing solutions being proposed are the same old, same old of “mobilising external financing and private-sector solutions,” which can be translated as getting money from donors and banks. That’s a formula that has not worked for 70 years.  

Using our black gold 

Africa’s natural wealth, especially oil has often been more of a curse than a boon, added to that, it is humanity’s use of those hydrocarbons that are the cause of the problem we find ourselves in. Thus, Africa finds itself with an odd problem, it would be mad not to exploit these resources, they are a vital source of income. However, it is that very exploitation that will come back and bite us as a cause of climate change.  

It is estimated that Africa has: 

  • 499 billion MMBtu (Metric Million British Thermal Unit) of proven gas reserves (7.1% of global proven reserves), 
  • proven reserves of 125 billion barrels of oil.  
  • Proven reserves of 36.7 billion metric tonnes of coal  

At the time of writing, the price of oil is US$ 68 per barrel, US$ 3 per MMBtu of Gas and US$149 per tonne of coal. Meaning that Africa has about 8.5 trillion dollars’ worth of Oil, 1.4 trillion dollars’ worth of gas and 5.4 trillion dollars’ worth of coal. While that may be their value, to get their true value you would have to factor in a heavy discount for the cost of developing the fields/mines, the profits of the oil, gas and coal companies and the environmental degradation and impact of their extraction. Beyond that, as the world moves away from hydrocarbons, these assets will become increasingly stranded as the world strives to buy less of them.  

Selling the oil without burning it  

Increasingly companies and governments are investing in carbon offsets and offset credits. A carbon offset broadly refers to a reduction in Green House Gas (GHG) emissions – or an increase in carbon storage (e.g., through the planting of trees) – that is used to compensate for emissions that occur elsewhere. A carbon offset credit is a transferrable instrument certified by governments or independent certification bodies to represent an emission reduction of one metric tonne of CO2 or an equivalent amount of other GHGs.  

The oil, gas and coal under African soil have an approximate equivalent of 53.7 billion and 114 billion and 91 trillion metric tonnes of carbon dioxide respectively1. Currently, carbon offsets sell at $3-5 per tonne, using a conservative price of $3 Africa’s oil, gas and coal assets would be worth $275 trillion. That may seem low but the price of carbon offsets is expected to rise to between $20-$50 within the next 10 years bringing them in line with the oil prices which would more than double those estimates.2 

Thus, rather than developing these assets, Africa can sell the potential carbon emissions as carbon offsets. Africa would sell the potential emissions from all that oil, coal and gas to companies and governments that want to emit carbon. This would do three crucial things. First, it would lock that carbon in the ground, if we are ever going to solve the problem of climate change, we must stop burning fossil fuels. Even though Africa has contributed the least to the current problem we can make sure we never become part of the problem by leaving that carbon in the ground. Second, it would give Africa an income stream that is wholly owned by Africa. No oil companies, no production sharing contracts, no royalties, and no drilling and mining projects that destroy ecosystems. That money can be spent financing Africa’s own green and sustainable industrial revolution and mitigating the effects of the damage already done by investing in our agriculture and infrastructure to ensure that they can cope with a changing climate. Third, it would remove our dependence on the generosity of the rich world, debt, or capriciousness of the market, giving Africa true ownership of its climate response.  

To make this a reality much smarter people than I would need to figure out key elements of turning our hydrocarbons into carbon offsets.  

  1. A mechanism for certifying hydro-carbon reserves and quantifying the potential carbon emissions.  
  2. A pricing strategy that does not put too many offsets onto the market at the same time to ensure that viable prices are kept.  
  3. A verification and enforcement mechanism to ensure that any reserves sold as an offset are not exploited and sold by those looking to have their cake and eat it too.  

Keep it in the ground  

Africa has contributed the least to climate change, yet we will bear some of its worst consequences. We cannot rely on the rich world to live up to aid and financial mobilisation promises if Africa is to deal with the dual challenge of climate change. That dual challenge is to ensure that our own development does not contribute further to climate change and that we put in place measures to deal with the consequences of global warming. We are not responsible for the past of others, but we must seize responsibility for our future.  

Selling the potential carbon emissions from African hydrocarbon reserves can be a critical tool in meeting that dual mandate. It will keep the GHG in the ground and maximise Africa’s contribution to ensuring a net-zero world. And it would give us the revenues to fund sustainable development and climate mitigation, on our terms, designed by Africans for Africans rather than at the World Bank or the Gates foundation.  

It may seem crazy, but oil, gas and coal may be just what Africa needs to stop climate change.  

Charity is not policy.

Our donors, who art abroad, hallowed be thy purse. Thy aid come in dollars and pounds. Thy will be done in our countries, as promoted by Bono. Give us this day, our yearly funding. And lead us not into self-reliance. But deliver us from ourselves. For thine are dollars, the pounds and the euros, forever and ever. Amen – Elnathan John – Becoming Nigerian: A guide

On the 24th of February Ghana became the first country to receive a shipment of Covid-19 vaccines through the multilateral Covax facility. Throughout the pandemic (and one could argue throughout the post-colonial period) Africa has been the worlds charity case. Asking for and receiving billions of dollars of donations of PPE, sanitation supplies, and now vaccines. While all of this is lovely it is highly problematic. Relying on the generosity of the developed world to help us respond to crises or define our development agenda is tantamount to giving up our agency over those same issues, and it allows our political leaders to outsource responsibility for development or crisis response.

While the lack of vaccines, testing capacity, PPE is blamed on hoarding by the rich world, which is true, it should also be blamed our own inability to manufacture vaccines, testing materials or PPE. This is down to the bad leadership which outsourced development policy to those, with money and good intentions with pet issues, those who think that intellectual property is more important than responding to a global pandemic.

As millions around the world get vaccinated and Africa, reliant on the charity of others gets left behind to become the Covid continent. Hopefully, it brings us to the realization that charity is not policy. Over the last year, I have devoted much (virtual) ink to looking at how Africa could re-imagine capitalism for itself, forge a post-pandemic vision of development, stimulate our economies and measures we could take to respond to the crisis. All of that is useless, if we do not take responsibility for our own development and recognize that charity is not policy.

The problem with charity as policy

The problems associated with development aid and assistance charity in Africa are well documented. The creation of bloated self-serving bureaucracies that have little or no impact while allowing ex-pats to live charmed lives on the continent. Trillions of dollars spent with little to show for it. The self-serving nature of most spending which is spent on consultants and companies from the originating country. The use of aid to push various geopolitical agendas and to buy the support of African governments. However, this is not the most corrosive aspect of aid and charity on the continent that comes in two forms.

First, it robs us of our agency. Our development agenda is decided in London, Berlin, Washington, Beijing, and Geneva, in board rooms at various foundations and charitable organizations. It rarely has anything to do with what the “targeted” African communities actually want or need. Should massive infrastructure projects be the focus of our development spending, maybe, or maybe not, but that agenda was driven by the multilateral development organizations. The various development fads of microlending, SME/entrepreneur/youth/gender empowerment, digital identity etc. have all primarily come out of western research and institutions. If African development is not driven by the stated wants needs and aspirations of its people, then it does not serve them but the agenda of others. Charity serves the agenda of those doing the giving, not the receiving.

Second, aid and charity enable governments to outsource their responsibilities. Why should the Nigerian government bother to provide real services to the people of the oil-rich Delta region when the Oil companies will spend billions in building schools, clinics, and roads as part of their CSR. Why bother devoting real resources and policy to healthcare, health research and public health finance if the Gates Foundation, US-AID, The Wellcome Trust, and other donors are all pumping money into it. When you outsource responsibilities, you lose control of them as others decide what the focus of the money will be. Thus, our health systems have severely undeveloped but critical elements (like blood services, non-communicable disease prevention, mental health treatment, pharmaceutical research development etc.) because donors have other issues (and more often specific diseases or issues) that they care about.

The impact of this is all too clear to see. Development when funded by aid and Charity is done to us rather than by us. And, when problems that are not a priority for donors, like a global pandemic, come to the fore we find ourselves without the capacity to properly deal with them.

Conclusion – taking back our agency

After its independence in 1947, India made a very deliberate choice, facing serious health challenges among its large population, one of the critical things that India needed to vaccinate millions of people against TB, Smallpox, Polio, and other infectious diseases. However, at the time, much like Africa today, India was reliant on the importation of often expensive pharmaceuticals and biomedicals. The Indian government very deliberately set about investing in indigenous pharmaceutical companies, enabling them to build up R&D capabilities and most importantly the capability to produce pharmaceuticals in India. By the 1990s when India’s economy was being opened up these companies combined rapid growth in their own large domestic markets with global partnerships and continued investment and supportive policy from the government to become global players. The greatest example of this is the Serum Institute of India (SII), set up in 1966 to produce immunobiological’s, it was a beneficiary of the Indian government’s policy and today is the largest vaccine producer in the world. The majority of the Covid vaccines delivered to Africa are made by the SII.

Doing away with charity as policy means taking a lesson from India’s book. Making, deliberate choices to invest in areas that will wean us off dependence. It may take us 20 years to build up the infrastructure to produce our own vaccines, but it will mean that the health of our people will no longer be reliant on whatever others have to spare to deploy programs like COVAX or GAVI.

This thinking isn’t just limited to the health sector but will require us to make very deliberate choices and investments in the design and deployment of our education systems, climate policy, food security, transport, and science and technology. Not just for jingoistic, populist reasons that sound good on the campaign trail, but to free critical aspects of our development from whims of charity and geopolitics and put them in the hands of Africans. If we do not, when the next crisis rolls around, Africa will once again find itself left behind, begging bowl held out dependent on the charity of others.

Forging social safety nets for Africa

Social safety nets are often seen as luxuries for rich countries. However, as we Kenyans say “2020 has shown us things”. Across Africa, the coronavirus has seen governments across the continent implement a raft of measures to cushion their citizens against the socio-economic impacts of the coronavirus pandemic. For instance, Togo rolled out an expanded digital cash transfer program called Novissi and South Africa has expanded its existing welfare and unemployment benefits system. And these are not isolated policies. Having shown that social safety nets are possible. The question shifts, from can Africa have social safety nets, to what should longer–term African social safety nets, that alleviate poverty and confer dignity look like. 

The need for a social safety net  

 The world of work and employment is changing. Formal employment is less common, and most Africans do not earn a living in formal jobs with regular paychecks. The informal jobs and agricultural work that provides the bulk of jobs on the continent often provide uncertain incomes. Compounding this is the fact that African socialism (also known as the black tax) is becoming harder. Incomes are more and more stressed, and it is becoming harder for individuals to extend support to the family, and the community that has in the past functioned as an unofficial safety for many.  

What is needed is an expansion of the African community spirit of Ubuntu to the core of our formal social contract, with the state through well designed social safety nets, and we can do this by designing and implementing sustainable safety nets.   

Defining a social safety net  

 The start of designing a safety net is defining its purpose. Which should be, in my mind, at its core about putting in place a floor beneath which society says its members cannot fall. It is not intended to replace work, or even disposable income, but rather to ensure that people do not fall into deprivation and desperation.  

The second critical issue is simplicity, which covers two key issues.  

1 – Simplicity of targeting. That the people for whom the safety net is intended are clearly defined, e.g. households that earn less than a clearly defined threshold, or even all adults over the age of 18.  

2 – Simplicity of access. A social safety net does not function if the people it is meant for cannot access it. Thus, unlike countries like the USA or UK, we cannot develop notions of the deserving or undeserving poor, which lock millions out of critical support. Thus, the means of accessing these support systems must be easy to understand, easy to find and easy to navigate.  

The third critical issue is the sustainability of funding. This means identifying and defining a long-term funding mechanism. Not a donor or simple year on year budget allocation that is subject to political changes every year. But a dedicated mechanism like a specific tax, or a percentage of royalties from natural resource extraction, will ensure significant funding over the long term. In addition, a broad, sustained funding mechanism fosters a broad feeling of everyone having skin in the game and creates broad social and political support for a safety that will ensure its long-term acceptability and stability.  

Forging the net  

So, with those critical elements in mind, what does an African social safety net look like. Each country would undoubtedly choose its own unique combinations, there are options on the table that are doable and can be made distinctly African. Not copying western systems but shaping them to our needs. Such as a universal health care system based on the provision of quality primary healthcare, that cushions people from the often crippling costs of healthcare and vastly improves the quality of life. Or a basic minimum income that lifts people out of poverty and gives them a basic level of peace and dignity. Or even community/locally based support systems that are run and funded by communities and directed to the things and people that they consider most pressing with central governments providing additional funding.  

Social safety nets are not a panacea for the socio-economic problems that the continent faces. However, they can be an important piece of the suite of solutions that drive our development. But beyond that social safety nets can reshape the relationship between African citizens and their governments. Moving away from the colonial relationship that, persists in far too many countries of the ruler who sometimes hands out goodies to the ruled masses. To one based on the government genuinely looking out for its people, recognizing their dignity, and placing it at the core of our development.  

Where next for Africa: a new vision for new development policy

As Africa continues to battle the public health crisis and the socio-economic impacts of the COVID-19 pandemic, I have been amazed, befuddled and despondent all at the same time at the responses we have seen. How African medical professions have responded and coordinated with resources and budgets that are tiny in comparison to their international counterparts. How nations like Togo have moved to cushion their citizens and the ingenuity and innovation shown by individuals and companies have all given me hope. The hope that we have the imagination, drive, and generosity to confront and overcome any challenge. However, the police brutality and human rights abuses and in some cases the outright denial of the virus by some has also given me pause for thought and reminded us how easy it is for our demons to take advantage of a crisis.  

Like many, in both my work and my writing I have been preoccupied with, as Dr King once put it “the fierce urgency of now”. How do we stop the virus, protect livelihoods, and reignite our economies? These are all valid concerns that deserve significant thought and effort. However, it strikes me that we also could and should be thinking beyond the pandemic. Crafting a vision for our continent that takes advantage of the extraordinary opportunity before us.  

The global pandemic has broken norms, systems, and preconceptions, which had limited the range of possible actions and policies we were able to pursue. Out of crisis comes opportunity. 70 years ago, Europe used the devastation of a world war to remake itself as a bastion of social democracy and regional cooperation. That required vision. People who recognised that despite the devastation, there was an opportunity to break with the past and reimagine what Europe could be. And went on to sell those visions to politicians, and people to create a shared vision that could be worked towards. Today the member states of the EU may squabble, but they do not plunge into periodic globally destructive wars and their citizens enjoy a near border-less continent with broad strong social safety nets. 

What is our vision for our countries, regions, and continent? What can we rally around, work towards and achieve for us and our children? There is an opportunity to build a better Africa out of this global disaster and we must seize it.  

The system is broken, and the opportunity is open 

The global Coronavirus pandemic has fundamentally broken or changed a number of aspects of global politics, economics, and policy norms that Africa can take advantage of.  

1. Capitalism is being questioned  

Markets are powerful things that can do a lot of good. However, this pandemic has reminded us that when markets are skewed and inequalities exist those will be amplified by crisis, and, more fundamentally that markets cannot do everything. Public goods and services, like public health, cannot be privatised and subjected to market efficiencies without consequence. Markets must have limits. Out of their failure during this crisis, we can remake them, to be fairer and draw boundaries around where the logic of markets ends and the public good takes precedence and we can remake the social contract to have fair markets and strong public services reinforcing each other.  

2. Social safety nets are possible.  

Before the crisis things like basic income, housing for all, or UHC were all dismissed as too expensive, too unwieldy (especially for African governments) and potentially undermining hard work and personal responsibility. In a crisis that was no one’s fault, we have seen governments design and deploy large scale social safety nets like cash transfer programs and rapidly expand public health systems to protect the most vulnerable and deal with the crisis. This is can also be a reality beyond the pandemic, Basic incomes and universal health coverage can be done and will be powerful tools for ending poverty.  

3. We can make things  

The pandemic disrupted global supply chains and across the continent things that were once easy to import suddenly had to be made here. Lo and behold we have discovered that we can make things like Personal Protective Equipment, Ventilators and even our own tests. If we can make things, we must make sure we never end up in a situation where we cannot produce the medicines and medical supplies we need, where we cannot supply our construction industries or stock our shop shelves. In short, there is an opportunity to rethink our industrial policies (as I have previously written about) around industries and businesses that now recognise the need for resilient local supply chains.  

4. Corporate tax is cool again  

With all the government spending that is going on around the world, it will eventually have to be paid for somehow, and there are few better sources of revenue than the multinationals adept at gaming the system. As countries around the world clamp down on tax avoidance and evasion Africa can do the same. Reshaping its tax systems (as I have written about previously here) to tax profits where they are made. An Africa that can replace aid and debt with sustainable revenue is an Africa with her destiny in her own hands.  

5. Global political space 

Global geopolitics, for so long defined and defended by the USA is fragmenting. With the USA becoming more insular, China on the rise but untrusted, a Europe busy trying to hold itself together, Africa has an opportunity. To reject the notion that we are a playground for global power games and redefine ourselves as a leader on issues like climate change, tax and trade that have for so long befuddled others and negatively affected Africa. Even forge a new alliance with emerging and middle powers around the world who do not hold ambitions of domination but of shared prosperity and calm. 

6. We are young and hungry  

Millennials around the world are despondent cohort, our working lives defined by recessions, pandemics and polarising politics. However, in Africa, this is not necessarily the case. I am constantly amazed by the determination and refusal to give up that the continents young people display. Young African’s are inventing, innovating, and breaking barriers in culture, business, science, and politics. Rather than being depressed like our western counterparts we can be Generation Hope. We must harness the hustle, embrace the creativity, and nurture the deep yearning for a better tomorrow. A crisis of the magnitude we are experiencing now opens the door for us to experiment, to leap into the unknown led by a generation of hope.  

That vision thing  

In these opportunities, brought about by an unprecedented crisis, I see the space to construct a new development vision for our continent. A vision anchored in the dignity of our people. A vision that looks to achieve our own moon shots of ending poverty, disease, and desperation, where our fates are decided in our capitals rather than those in foreign lands. And where prosperity Is not built by climbing over the backs of others but through our innovation and drive that allows us to stand on the shoulders of each other.  

My writing usually addresses dry development policy subjects like budgets, trade, and labour policy, but fundamentally development policy is anchored in a vision of a better future. For the last 30 or so years, those visions in Africa have been stunted by uninspiring inhuman aims such as achieving middle–income status or industrialisation. The pandemic allows us to once again centre our development visions on the dreams of our people. Visions that we can identify with, rally around, work towards together and proudly proclaim our individual roles however small in achieving those goals.  

Without an underlying inspiring vision, our development policy is lost. It is misdirected into white elephant projects, filled with other people’s priorities, and spelled out in consultant gobbledygook and buzzwords. The crisis of the pandemic offers an opportunity to reclaim and reframe Africa’s development vision, let us seize it.  

Which Way for Africa? Development Policy in a changing world

Global political-economic realities are shifting. China’s economic growth has slowed to its lowest levels in 26 years. And in the rest of Asia key economies such as India and Japan are also facing lower than expected growth. Germany, Europe’s biggest economy is cutting growth forecasts as the EU struggles to find growth and grapples with Brexit. In South America, the two largest economies of Brazil and Argentina are struggling with a recession and debt respectively. And while the US economy is riding high at the moment it is beset by recession fears, and dominated by nationalist sentiment. Politically, the geopolitical certainties that have defined the post-cold war world (a strong and engaged USA, a non-aggressive China, a stable Europe, powerful multilateral institutions, and global norms that are respected and adhered to) are crumbling. All of this implies that the global economy and geopolitics that will be less stable, less cooperative and more competitive, right at the time when the global challenges of climate change, inequality and poverty require cooperation and consensus.

These dynamics have significant implications for African policymakers and leaders. As Africa is confronted by a changing world, we need to change our approach to and strategies for our development. We must ask ourselves what these changes mean for Africa, and how can we, as African’s take advantage of the oppurtunites and mitigate the risks.

What does this all mean for Africa

For Africa, these shifting global dynamics have three significant consequences.

  1. The path to development exploited by the Asian tigers is likely closed. This path relied on increasingly open global trade and capital flows to drive export-led development and Foreign Direct Investment. Globalisation is under pressure from an increasingly protectionist developed world that is seeking to protect its own stressed working and middle classes by restricting trade (or engaging in trade wars) and the decline in the influence of global norms and institutions that had sought to broaden the reach of global markets. This means that development strategies based on the Asian model of export-led growth driving industrialisation, employment and growth are less likely to succeed.
  2. The increased geopolitical competition will see Africa become a stage for global power competition, as they search for access to new markets, resources and diplomatic allies. This dynamic is already in full swing if one looks at the competing Africa strategies of the USA and China and a new focus on Africa from the EU and Russia.
  3. The traditional multilateral forums and institutions, like the UN, World Bank and IMF that helped drive development and have in large part defined development economics and policies since the 1950s, are losing influence and relevance. This means (hopefully in my view) that there will be more space for innovative approaches to development.

A shifting approach

A changing world requires a changing approach to the world from Africa, including our approach to development.

More space for new thinking

As stated earlier, the global multilateral institutions that have defined development thinking for decades are losing their influence and thus relevance. Beyond this, the great powers (namely the USA, China, EU and Russia) are primarily focused on domestic issues like faltering growth, fractious populist politics, inequality, and geopolitical competition in the Middle East and Pacific. What this gives Africa is the ideological and intellectual space to redefine development. Rather, than follow the lead of the World Bank or try to copy the Asian tigers, we have the opportunity to Africanise development (something I have previously talked about here). To decide what matters to us, how African’s envision their future and how we are going to get there.

Internal markets

As globalisation falters and countries become more protective around issues of trade, immigration and capital flows, we cannot rely on global trade and FDI to drive our development, something that African countries currently spend a lot of time trying to attract. Furthermore, outside of Asia, there are no significant high growth markets where we can build demand for African goods. What this means for us is that we can focus more attention on our own internal markets. On policies that foster intra-African trade, promote the growth of SME’s, enhance Agriculture, investing in science and technology and face up to the challenges of climate change together.

Focusing on our own markets and fostering growth that isn’t dependent on western capital looking for returns or Chinese demand for raw materials, will likely prove to more sustainable over the long term. It won’t be instantaneous and no one should expect miracles in the short term, but African markets are one of the last underdeveloped markets with high growth potential if we do not take advantage of our own markets someone else will.

Engaging smartly with competing powers

As the world shifts from being a unipolar dominated by the west/USA to one where there are competing world powers and interests, African leaders would do well to learn from the lessons of the cold war, and not latch themselves to one side or the other for better or worse. Rather, we need to understand and engage with the West and East strategically and cooperatively, acknowledging our own relative weakness in terms of economic, political and military power and having very clear achievable strategic goals. Using, smart consistent engagement with world powers to get the capital we need to help fund development.

A whole new world

A changing world can be seen as a problem or an opportunity. For Africa, I see it as an opportunity. One where we can reshape the development of the continent to one that happens on our own terms with the benefits accruing at home. However, it will be a problem if we do not change our approach to engaging with the world and development in a new global context. We may find ourselves at the mercy of global powers, with wasted investment in development strategies that are not applicable anymore. For the opportunity to become reality will require a coherent vision and then the boldness and imagination to execute it from our policymakers. Something, I have no doubt the continent possesses, the trick will be to harness it.

Africanising Elections

“There is nothing more dangerous than to build a society with a large segment of people in that society who feel that they have no stake in it; who feel that they have nothing to lose. People who have a stake in their society, protect that society, but when they don’t have it, they unconsciously want to destroy it.” – Martin Luther King Jr.

As a Kenyan, every time I watch our chaotic, polarising, sometimes farcical elections, which usually end up with the same cast of politicians with their tired approaches to development in charge. I ask the same question, I saw in a newspaper cartoon, several years ago. Is democracy bad for Africa or are Africans bad for democracy?

The more I ponder the question the more I realise that the answer is neither, but rather if African democracy is flawed, it is because it isn’t African enough. In a previous post, I wrote about how the argument that democracy does not deliver development is wrong, and that we need to think of democracy as not just elections, but broad and continuous participation in governance by citizens. In this post, I want to address the first part of that argument. Elections are not democracy, but they crucial pillar of democracy, the ultimate decision-makers in our governments are chosen through this process. If Africa is to develop and craft courageous new policy approaches to the challenges of the 21st Century it must solve its leadership problem, and that starts with elections.

Changing how we vote and what we vote for may not only help make African democracy more relevant to the African context but by making representation more diverse we can elect the leadership we need and ensure that all Africans feel like they have a stake in their democracies. Many African states have focused on reforms to other parts of the democratic infrastructure such as separation of powers, an independent judiciary and devolving power away from central authorities. These areas of reform are vitally important and must continue, however, if we do not address our electoral infrastructure the whole democratic system will be fundamentally weak and susceptible to the strongmen, dictators, and tyrants that we need to consign to the dustbin of history.

The problem with African elections

Liberal democracy has its roots in the history of the West. The Athenian idea was that citizens (men at the time) should elect their leaders. The innovation of the Romans separated and limited the powers of the leaders to prevent tyranny. The Magna Carta of England made the king a subject of the law rather than the other way around, and so on. The history of the West is in the DNA of democracy and it is a system which Africa inherited as it shed colonialism and that was pushed by the western powers in the 1990s as many African states were encouraged to make democratic reforms. And, many did so, holding elections to determine who will be running the country.

The problem is, that history and the type of elections they bequeathed, namely winner take all elections are not entirely relevant to African states. Winner takes all elections have a number of negative impacts.

First off because only one man can win (it is unfortunately usually a man) the stakes are so high that people are willing to do anything to win. This usually involves having to raise outrageous amounts of money to run a campaign and then having to make that money back while in office it’s a recipe for corruption. Or employing underhanded tactics such as rigging, voter and opposition intimidation, spreading fake news and refusing to accept the results of elections, fundamentally undermining the system to invalidate their opponents’ victory. Winner takes all elections also tend to leave behind a feeling of division and resentment in ethnically diverse societies. When the candidate you support loses, in societies where voting blocs are often based on identity such as ethnicity or religion you feel like your tribe or clan has lost, leaving you feeling marginalised and much more susceptible to radicalism and open to drastic solutions, such as supporting the overthrow of the government you do not feel a part of.

African countries spend a lot of money on elections trying to ensure they are free and fair, which is all good and well until those expensive elections breed division, corruption and rigging. This isn’t an argument to stop holding elections, rather its an argument to reform elections and electoral systems with more creativity and shaped to the African context.

Changing how we vote – One man one vote, with a twist

Elections are based on a simple principle, that every citizen has a right to decide who runs their country. In most African electoral systems, you only vote for one person, and your vote is counted once. This need not be the case, in democracies such as Australia and Ireland they employ ranked or preference voting systems. Which not only considers the choice of the voter but also their preferences about all the candidates, by having ballots where citizens rank the candidates in order of preference. Thus, not only is your vote cast for your preferred candidate, your preferences live on even if your first choice is not a front-runner.

A simple example of this is to imagine a race for a member of parliament (MP) where there are four candidates. Candidate A wins 40% of the vote, Candidate B 30%, Candidate C 20% and Candidate D 10%. In a first past the post system, which most African countries employ, the candidate with 40% of the vote would become the MP, but 60% of people didn’t vote for them, leaving you with a democratic problem. Does the candidate represent a broad enough cross-section of his constituents? In a ranked voting system, after the first round of counting the candidate who won 10% would be eliminated as there is no mathematical possibility of them winning, but the votes would live on, through whomever the voters have chosen as their second choice. Thus, if half of candidate D’s voter’s choose Candidate C and the other half Candidate B it would now be   40%   35% and C 25%. In the third round of counting you eliminate Candidate C and if his voters express a third preference that is 80% for Candidate B and 20% for Candidate A. They would respectively have 60% and 45% of the vote and Candidate B would be the winner, because more voters expressed a preference for that candidate over the other candidate.

Meaning that to win elections candidates would have to appeal to all voters rather than just a simple plurality. Furthermore, cynical strategies like trying to divide the opposition vote by backing spoiler candidates would backfire as those votes could still eventually count against them. Most important a ranked voting system gives the voters a greater voice and ensures better representation as the candidate who is preferred by the most voters would win, rather than the cleverest campaigner.

Changing whom we vote for – ending marginalisation

As spoken about earlier the diverse nature of African societies, means that marginalisation is not only a possibility it is an unfortunate reality in far too many African states. Minority groups find themselves either completely locked out of the political process or having to become junior partners to larger groups in some form of coalition. This is due to the combination of a first past the post electoral system and single-seat constituencies, where a constituency or district is represented by only one person. There is no reason why this must be the case, why should representation be limited to one specific form, in Germany and Lesotho they employ what is called mixed member proportional representation. Where people cast 2 votes one for a candidate to represent a constituency another for a party that they feel best represents your views. Parties that achieve a minimum number of votes nationally (at least 5% in Germany) get a seat in parliament in proportion to the votes they have received. This allows voters to elect who they think will represent their community best, as well as who they think would do best nationally. In addition, it means that small parties, the ones that represent minority interests, the ones who may not be able to win an individual seat, but can get a share of the national vote are represented and can ensure that those minority voices, which may have been marginalised previously are heard.

Mixed member proportional representation is a way of trying to ensure that representation is as diverse and representative as possible, that the concerns of the big groups do not drown out the concerns and interests of minority groups.

Publicly funding candidates

It is not just enough to change how we vote and what we vote for. To get the kind of responsible leadership we need, we need to give the candidates without the ability to raise huge amounts of campaign cash the opportunity to put their case to the people and that means funding. Some countries on the continent have tried some form public funding for party’s policy in an effort to make political parties less susceptible to corruption. This hasn’t really worked as parties are happy to take whatever cash they can get their hands on, legitimate or otherwise, while candidates who aren’t willing to play the dirty cash game are unable to afford to campaign are either discouraged from running, or get drowned out by their better-funded opponents. Having a pool of public funds which candidates, who meet certain criteria – such as committing to publicly disclose all non-public funding that they receive – can receive would give them the ability to put their case to the public. And it would give the public a choice. Money talks, especially in elections, and should give everyone a voice.

Africanising elections

Prior to colonialism and its practice of centralising power in the state and its chosen representatives, many African societies had consensus seeking, conciliatory methods of exercising power. Chiefs and king (where they existed) were generally not tyrannical autocrats, they were constrained by, and had to listen to their people through various mechanisms (such as Botswana’s Kgotla). Rather than doing away with democracy or allowing its continual erosion on the continent we should instead be looking to strengthen it. Draw upon our socio-cultural history of responsive people-based leadership to inspire an Africanisation of democracy, to make it more relevant and effective on the continent. Doing this requires addressing the issue at the heart of democracy, elections.

The winner takes all, money-fuelled, to-the-death contest that elections have become on much of the continent is problematic as it deepens divisions within society and feeds the cycle of bad leadership on the continent. The three mechanisms suggested here, could have the effect of making every individual vote more meaningful, make elections more inclusive and give candidates from outside the tired mainstream a viable chance to win.

Elections may not be seen by many as a development policy issue, however, I believe it is. It is through elections that we have perpetuated the cycle of bad leadership, that has led to ineffective and counterproductive policy and development outcomes. I have previously written on Africa’s leadership problem and the need for citizens to take more responsibility for and elect and support the right type of leaders. But in order to do so they must have the electoral tools available for them to do so, ranked voting, mixed member proportional representation and publicly funded candidates are tools that not only put more control in the hands of the voting public but also enable diminish the incentives to vote for the devils we know and increase the incentives for a new type of politician to run.

Democracy and elections are loud and passionate, and that is because important things are at stake. Africanising elections means making them more relevant to voters by tailoring them to the societies and realities we actually live in rather than 18th century Britain and America. Better, more relevant, and African tailored electoral systems could mean, better leadership and accountability, which will mean better policy and developmental outcomes, its something worth trying.

Africanising Development

Development is about more than money, or machines or good policies – it is about real people and the lives they lead – Paul Kagame, President of Rwanda

Development in Africa is largely determined outside the continent. The ideas of modernisation and socialism that dominated post-independence thinking and policy were western in origin and backed by the ideological agendas of the cold war superpowers. The triumph of neoliberalism in the 1980s and 1990s in the west pushed developmental liberalism upon the continent, embodied in the policies of free markets and Structural Adjustment programs. Recently the millennium development goals (MDG’s) and sustainable development goals (SDG’s) did not originate on the continent but rather in the meeting rooms of think-tank’s and multilateral institutions such as the UN, World Bank and OECD.

When Asia embarked on its extraordinary development journey it did so not only by adopting the ideas of others but also by localising them. Focusing on what they saw as the appropriate goals and focus of development. As the world moves into an ever more uncertain 21st century Africa remains in thrall to foreign ideas of development. If the continent is to move forward, if Africa’s development story is to be successful, then we must develop African centred ideas of development and the policies to pursue them. To do that we have go back to the start, ask ourselves what and who development is for and what our priorities are, on that we can build development policies that are for Africa, and made by Africans.

A brief history of development

In the 1960’s as most African nations were gaining independence, one key aim was socio-economic development. With the aim of bringing African economies and standards of living up to 20th century standards. At this time the primary thinking in the development world (aid donors and development institution) and in governments was modernisation theory. The theory holds that modernisation is a prerequisite for development, and that developing countries must evolve from traditional to modernised societies in order to develop. This entails the transmission of capital (aid and FDI) and the replication of economic, social, political and legal values and institutions from the developed world to the developing world. Thus policy makers attempted to copy the modern institutions of the west and rapidly industrialise. This was not very successful as the failed development policies and strategies of the 1960’s and 1970’s show. Merely copying modernity did not replicate it, as it fails to account for the conditions that led to that modernity and the fact that the same conditions that existed in the developed world did not exist in Africa.

In the 1980’s and 1990’s in line with the rise of free market neoliberalism, and the end of the Cold War, liberalisation democratic political reform because the focus of development, driven by the nations of the West. The idea was that African economies had failed to grow because they did not have free markets and the liberal democrat institutions to ensure that those markets functioned fairly. Thus Africa was subjected to a series of market liberalisation structural adjustment programs where aid and debt assistance was made conditional on downsizing the governments role in the economy, privatising services and state companies and opening up countries to international trade. This again obviously did not work, many would argue that it took away the little government protection and safety nets that African’s had and subjected them to whims of international markets and allowed a rich few to get even richer by buying up cheap state owned companies under the guise of privatisation.

Thus in the 2000s recognising the failure of market liberalisation and modernisation before it the MDG’s emerged. The UN, OECD and World Bank had been working on a set of ideas and goals to reduce global poverty, and they combined their efforts to come up with 8 key development goals with which to pursue this goal. While there has been some progress under the MDG’s and later the SDG’s they still bear the hallmarks of the two previous development initiatives. They are driven by donors and international development institutions and have little local ownership by the countries they are intended for.

Thus the story of development theory and policy in Africa over the last 50 odd years has been essentially foreign, with abrupt shifts in thinking and focus when political and ideological views shift in western capitals and development institutions. What this has meant is that as African’s we have had little ownership of our own development. It has been something defined elsewhere and either thrust upon us or unthinkingly adopted without taking into account the views, history, culture and aspirations of the people it is intended for. Thus to Africanise development we must break this pattern, we must start thinking of development as something that comes from within rather than, an act of copying those who have gone before or accepting ideas without question.

Who is development for?

In all the talk one hears about industrialisation, jobs, infrastructure and even development, what one rarely hears is the voice of the people for whom it is all supposedly intended. At the core of development must be the people and their needs and wants. Africa’s development policies should not start in think tanks, ministry meeting rooms or development bank boardrooms, but with Africans. We must start with broad conversations both within and across nations by asking ourselves, what is it that we as Africans want? What future do we imagine for our children, what are the key challenges facing Africans as individuals and as communities. There are a number of ways of doing this (which I suggested in previous post) from town halls, to online comments and hangouts, to kgotlas and barazzas. These questions would serve to ground Africa’s development in the aspirations and needs of its people. If development is meant to better the lives of citizens then their concerns must be at it its centre, and then only way to ensure that is by asking them.

What is development for?

Development is about numbers. Or at least one could be forgiven for thinking so. The MDG’s and SDG’s are replete with goals and targets. Politicians and policy makers are always quoting GDP growth numbers, job numbers, kilometres of roads or railways built. You could be forgiven for thinking that development is a statistical exercise. This misses the fundamental point of development. It is, or at least should be, about the people, their quality of life and their dignity. If development continues to be about the numbers or the shiny new roads and railways rather than how they positively impact the lives of the people, then those numbers will continue to be largely meaningless. Those numbers must be rooted in what they mean for people. Are the jobs that have been providing a viable income, are the roads and railways built opening opportunities for ordinary citizens, is increased food production putting more food on tables and is GDP growth being felt at all levels of society.

Numbers are great, they can help measure progress and expose problem areas. But they are not what development is for, and when using those numbers, we must be careful to ensure that they are rooted in reality, the reality that development is about improving people’s lives.

What are the priorities?

At the core of economics is a simple concept, scarcity. How best are goods, services, labour and resources used and distributed within society when it is not possible to provide for everyone’s needs and wants. Development policy is similar, it is impossible to do everything at the same time and this necessitates choices. Do you invest more money in education or healthcare, which region do you build roads in first, which industries do you choose to promote etc. The East Asian tigers chose to prioritise traditional industrialisation, while a country like Costa Rica has chosen to prioritise environmental sustainability, healthcare and education alongside economic growth. The question is what are Africa’s priorities, what is our development focus. Over the last decade the priority has been the SDG’s, closing the infrastructure gap, industrialisation, jobs, intra-African trade, agriculture and energy provision. The problem is when everything is the priority nothing gets properly done, it is simply an impossible task to do everything well at once. Thus, policy makers have to prioritise, pick a development focus and do it well. That focus should be informed by the previous questions of what people actually want out of development.

Africanising development

Africanising development is not about discarding all ideas and theories of development if they do not come from an African source. Rather it is about grounding the continent’s development policy in the aspirations of its people, taking ownership of it. The three questions of who is development for, what is development for, and what are our development priorities would help better define development in African terms, ground it in the aspirations and needs of its people and better focus the efforts of governments and policymakers. For too long development in Africa has been about what other nations, institutions and experts think is best for Africa, rather than what African’s think is the best path for themselves. Africanising development means taking responsibility and ownership of the future of our continent and to do that we need to approach it from the bottom up, give all African’s a stake in it by making them active participants and owners of their continents future.

Give the People Money: Ending African Poverty with a Basic Minimum Income

“In this new century, millions of people in the world’s poorest countries remain imprisoned, enslaved and in chains. They are trapped in the prison of poverty. It is time to set them free… Overcoming poverty is not a gesture of charity. It is the protection of a fundamental human right, the right to dignity and a decent life” – Nelson Mandela

In my first post I outlined what I see as the goal of development. Which is to give everyone ability to live their lives with dignity. Which means an adequate and improving quality of life, economic opportunity and security, physical security and good governance. The antithesis of this is poverty, and ending poverty is Africa’s core developmental challenge.

Poverty, as defined by Professors Lilian Chenwi and Danwood Chirwa is ‘a state in which a person is unable to live a long, healthy and creative life, nor to enjoy a decent life worthy of self-respect and respect of others’ [1]. The simpler definition is having to live on less than US$ 1.9 a day. According to the World Bank approximately 43% or 330 million African are living in poverty.

Poverty is hard, grinding and often degrading. It manifests its itself in hunger and malnutrition, poor health, lack of education, and social and political discrimination. Poverty is often self-perpetuating, with those born into it often remaining in it because of the lack of opportunities and resources. Poverty is insecure as those living in it are most likely to be victims of violence and conflict. Poverty is the worst and most degrading form of underdevelopment, consigning its victims to unnecessarily harsh lives and wasting their potential. If nothing else, then Africa’s development must be defined by how it pulls its people out of poverty and allows them lead fulfilling lives and reach and exceed their potential.

To end poverty, we have to empower the people living in it. Those living in poverty are not there by choice, it is an accident of birth and circumstance. They lack the resources and the opportunity to climb out of poverty. The solution is thus simple, to provide Africa’s most underserved citizens with these resources and opportunity and we can do that by giving them money. By ensuring that every person living in poverty has a Basic Minimum Income (BMI), which they can use as they see fit to improve their lives. There is growing evidence from Africa that this works. That a BMI not only enables people to improve their circumstances but also to invest in their futures and it has positive impacts on health, education and security. If Africa is serious about ending poverty, then we have to seriously consider the option of a BMI.

Basic Minimum Income – the concept and evidence

The concept

A BMI is a relatively simple idea. It is a cash transfer that gives everyone in society who needs it enough money to live on. A BMI aimed specifically at relieving poverty would have 4 key characteristics that separate it from traditional welfare programs:

  • all members of society living below the poverty line are eligible to receive it,
  • the BMI is unconditional, you do not have to work, or go for any training to receive it,
  • it is enough to cover the basic needs of those who receive it,
  • It is guaranteed for as long as they are under the poverty line.

At its core the BMI is about guaranteeing a minimum standard of living throughout society through cash transfers to all those who for whatever reason are below the poverty. By its nature it is not discriminatory as it is available to all, neither does it subject the poor to the humiliations and bureaucratic nightmares of means testing, forced job hunts or training that are the hallmarks of modern day welfare systems.

The evidence

A BMI or some variant has or is being tried in various places across Africa, most notably South Africa, Namibia and Kenya, and the results show that not only does a BMI reduce poverty it also has significant impacts on the health, education, security and quality of life of those who receive it.

In South Africa the Social Security Agency (SASSA) distributes what are called social grants. Which are cash payments given to the most vulnerable groups in society and there are seven types of grant that the agency gives out.

Research done on the impacts of the social grant system has shown a number of significant impacts. First that social grant system has been sufficient to lift many households out of poverty (page 37 of this study). Second, the research shows that the grants in particular the child support grants have been crucial in reducing poverty in women headed households and empowering them in their homes and communities. Furthermore, the child support grant has enabled parents to be more positively involved in their children’s education, such as reading to them and helping with school work and ensure that their children were properly nourished and received healthcare. UNICEF studies has further shown that the child support grant has had a positive impact on school attendance and healthcare as well as reducing risky adolescent behaviour such as unprotected sex, drug and alcohol abuse and criminal activity.

In Namibia, in 2008 they piloted one of the worlds first basic income projects called the Basic Income Grant (BIG) in the Otjivero settlement and Omitara town. Both of which were noted for high rates of poverty, insecurity and poor health. The grant was simple, each person would get a monthly unconditional cash grant of 100 Namibian dollars (about US$7). With the grants for those under 21 going to their primary care giver, which was usually their mother. The report on the impacts of BIG shows details its positive impacts which are notable not only for being positive but also for how many areas of people’s lives it impacted.

  • Severe poverty was reduced by 54% and food poverty was reduced by 56% in one year.
  • There was a 36.5% drop in crime in crime in the areas where BIG was trialled.
  • Just six months after BIG was introduced child malnutrition dropped by 52%.
  • Drop-out and non-attendance rates at schools went from 30-40% to 5% after the introduction of BIG as parents were now able to pay school fees.
  • In contradiction to the arguments that a basic income would discourage work employment actually rose by 9% after the introduction of BIG.
  • BIG also helped people start and grow their own small businesses, as the extra income was used by people to start and/or invest in their own businesses as well increasing demand in the area as people now had some money to spend.
  • BIG also allowed people to save and invest in their futures. 40% of those who received the grant saved it. 31% used some of the money to fix their homes, 9% invested in livestock and 11% paid back debts.

Unfortunately, in 2010 due to politics the program was ended and essentially forgotten. What stands out is that it was able to achieve so much in reducing poverty and improving living standards over such a short period of time.

In Kenya a U.S. based charity called Give Directly which champions unconditional universal income cash transfers, trialled them in a village in Western Kenya between 2011 and 2012. With recipients receiving around US$ 274 over the course of the year, and the results are very similar to those in Namibia:

  • The transfers significantly reduced hunger, 30% overall and 42% for children.
  • The transfers enabled the recipients to invest in livestock and their own small businesses. With income from livestock increasing by 48% and income from self-employment increasing by 38%.
  • The transfers increased consumption and thus economic activity in the village.
  • The transfers led to increases in the psychological well-being of the recipients and their families.
  • Notably (again), despite the assertions of many critics the transfers did not increase spending on alcohol, tobacco or gambling.

The examples in South Africa, Namibia and Kenya show remarkably positive impacts not just in poverty reduction but in improving healthcare, education, the well-being of children, women’s empowerment, employment, security, small business start-ups and growth, and long-term savings and investment. Furthermore, the predictions that “they would just spend it on booze and gambling and entrench laziness” were also shown to wrong. These results show two things first that poverty is not a result of being lazy or bad, rather it is a result of being stuck in a poverty trap, where the lack of resources (namely money) prevents people from being able to live with dignity and plan for the future. Secondly, the impoverished are not stupid, given the resources and the opportunity they can and will make the right choices for them, their families and their communities.

How can we do this in Africa?

If the evidence shows that a BMI is an effective and empowering tool for poverty reduction in Africa the question then becomes, how can we do it? The usual response is that we can’t. That African nations do not have resources to fund such a program given the high levels of poverty on the continent and that governments have to invest in a number of areas such as infrastructure, education, healthcare, security etc. which over the medium to long-term will reduce poverty. My response to this is threefold, first, that poverty is an issue now and every single day for hundreds of millions of Africans. Secondly that short-term significant decreases in poverty will not increase economic growth but make it more sustainable over the long-term and third if we get creative we can find the money for BMI.

Finding the money

One idea for funding a BMI is called a negative income tax. The idea is that a progressive income tax system be implemented where people earning below a certain income threshold receive a payment from the government rather than paying tax to the government. This is offset by those who earn above the threshold who pay progressively higher taxes depending on their income. However, this requires a broad and deep income tax system which due to the lack of formal employment on the continent many African countries do not possess.

My personal preference is not to tax the income of Africans, but to tax the profits of those making money off of Africa, through more efficient and increased resource and foreign profit taxes. In a previous post I discussed how through reforming its tax systems, African countries could get more tax revenues from the extraction of natural resources and the profits made by foreign corporations in Africa. For too long Africans have not benefited from the wealth of their land that helps fuel the global economy and the profits made in Africa by global corporations are spirited away to the benefit of shareholders in New York or London. If African nations taxed those profits and resource extraction properly, much if not all of the money needed to fund a BMI could be found, governments would be able to continue to fund all the other things they use ordinary tax revenue for and the people of Africa would finally see the benefits of the fruit of their land. Furthermore, as the examples show a BMI would itself increase the tax revenue of governments. With disposable incomes people would be able to buy goods and services, save, invest and start businesses all of which are taxed by governments around the continent. And as people rise out of poverty, and their incomes grow and become more secure they can be gradually taken off the BMI, which would over time reduce the size of the payments that governments would have to make.

Africa will rise when we end poverty

The English writer Eli Khamarov once said that “poverty is like punishment for a crime you didn’t commit”. The hundreds of millions of Africans living in poverty are the victims of this cruelty, and through no fault of their own they have, as Nelson Mandela put it, been deprived of “a fundamental human right, the right to dignity and a decent life”. Since independence African leaders and policy makers have unfortunately made choices and implemented policies which have failed to break and, in some cases, caused and entrenched the cycle of poverty on the continent. However, Africa need not be defined by its poverty, Africa does not have to be the basket case of the world. There are still options and policies, like BMI, that our leaders and policy makers could make that could end poverty in Africa.

Some may ask, why this policy? East Asia and the West pursued the traditional poverty eradication path of industrialisation and this is what Africa is trying. However, there are two key issues of pursuing poverty eradication through economic growth and industrialisation. First, industrialisation takes time, even the quick industrialisation of East Asia took at least 3 decades. Secondly industrialisation is a painful and unequal process. In both East Asia and the West industrialisation has been accompanied by highly unequal distribution of wealth, terrible labour conditions and it hasn’t pulled everyone out of poverty, hence the need for social safety nets. And to this day there remains pockets of citizens in the worlds most industrialised economy who live in relative poverty. In addition, a BMI does not mean you must abandon a nations aspiration for industrialisation or socio-economic growth, rather I believe it would speed it up. It would help push people out of poverty now rather than in 30 years. It would ensure that no one is left behind by a changing economy. And importantly to the process of industrialisation would create a significant number of people with disposable income who will be able to buy locally produced goods and services.

The evidence shows that when empowered, when given the resources and the opportunity Africans living in poverty can and will rise. The solutions to the unfulfilled potential of our continent lies not in SDG’s, or debt fuelled infrastructure or the benevolence of the developed world, but in giving our people the tools to fulfil and surpass their own potential. To do that we must invest in them, we must address our central developmental challenge of poverty by ending it. To do so we have to be creative and brave. Exploring and implementing policies like a basic minimum income is a way to do so. Ending poverty in Africa will turbocharge economic and social growth, and it will also allow hundreds of millions of Africans to live lives of dignity, and if nothing else, that is development.

[1] The Protection of Economic, Social and Cultural Rights in Africa (2016), edited by Danwood Mzikenge Chirwa, Lilian Chenwi, p.12-13