Africa at the G8 meeting

LONDON – Prime Minister Tony Blair is going to give the G8 summit the same kind of energy he famously gave to the launching of the misconceived war against Iraq. The question is will he be any more able to hit the target accurately than he was in that case?

He has certainly prepared himself better. Instead of relying on fast-written, poorly researched, intelligence reports, he has spent over a year studying Africa as the chairman of his Commission for Africa. Along with mainly African commissioners he presided over a first rate team of economists who came up with well-informed drafts that not only were the most perceptive observations of all the many reports on Africa over the last two decades, but were well written to boot. However, that is not enough. I still don’t think Blair gets it quite right.

Africa is not a basket case, as the subtext of the report keeps suggesting. After a disastrous period during the 1970s and 1980s a lot of African countries are now doing reasonably well – Senegal, Mali and Ghana have had steady 5% growth rates for some years now. Mozambique, in the wake of a murderous civil war, has not just secured its peace but has regularly attained growth rates of between 7 and 9%. Nigeria is also around 6%. Botswana with its growth rates of near 10% – the world’s fastest growing economy during the 1990s – has shown what can be done by a country over-dependent on one much desired export, in this case diamonds.

Whilst the other oil and diamond economies – Nigeria, Angola, Sierra Leone and the Congo – ripped themselves apart in resource wars, Botswana has ploughed ahead, using its revenues to diversify its economy and to develop an impressive welfare and health system. And then there is Tanzania and Madagascar turning in a regular 6% annual growth each year.

All of these countries are not only democracies, they have presidents committed to not serving more than two terms in office. This, to me, seems the litmus of success. Uganda may have done extraordinarily well the last 19 years under Yoweri Museveni but now that he has made it clear he wants a third term, although it means re-writing the constitution, the on-going political stability of the country seems in doubt.

So what does Africa need to continue to go forward? Blair says debt relief, a doubling of aid and a better trade deal. The battle for debt relief for the poorest countries has already been won. Gordon Brown, the British Chancellor of the Exchequer twisted the arms of the G7 finance ministers in June to write off multilateral debt for the 18 of the poorest countries. But maybe he has ruined their commercial credit worthiness in the process.

As for aid, why the need to double it? Is it meant for those who are not doing so well? That would be self-defeating. If they can’t match their fast-growing peers it is because they are not on top of their problems – they have spent too much energy and sweat on wars. Or they have not got on top of their macro economic priorities – reducing inflation, privatizating money-losing state enterprises, raising the tax take, limiting corruption and giving priority to education.

And for those doing well? As I saw recently in rapidly developing Tanzania and Uganda there is only so much aid a country can usefully absorb. Tanzania is receiving $1bn a year in aid and using most of it rather well. Some more would be helpful in the building up of infrastructure, such as new ports, roads and airports but too much, too fast would lead to bottlenecks, inflation and corruption. Tanzania doesn’t have the skilled manpower to support a growth rate of more than 7% a year. What Tanzania needs, like all of Africa, is more surety of aid – to make sure that projects started are completed and then sustained, and more private investment.

As for trade, the G8 are all over the place, with Blair pushing a number of highly complex initiatives. If Africa continues to depend on waiting for the Doha round to bear fruit it will wait a long time, as it bargains to limit Western crop subsidies in return for lowering its own trade barriers. These negotiations are labyrinthine, and will always be weighted, whatever the outcome, in favor of the rich.

A better idea would be for Africa to call the bluff of the West and demand an absolutely level playing field in which both sides dismantle all subsidies and tariffs, and quickly too. In Tanzania I saw with my own eyes how African peasants, a growing number armed with their cell phones, respond to the free market. It is a challenge they can meet and prosper with.