Monthly Archives: July 2014

Lessons from the 2014 joint UN/AU Economic Report on Africa – By Chofor Che, published at, 23 July 2014

The 2014 Economic Report on Africa (the 2014 Report) was launched in Yaoundé on the 17 July 2014 under the patronage of Cameroon’s Minister of the Economy, Planning and Regional Development. Present at this launch were top ranking civil servants, economists, private sector actors, academics and members of the international community interested in investing in Africa in general and in Cameroon in particular. The report, published by the African Union Commission (AUC) and the United Nations Economic Commission for Africa (ECA) focuses on various case studies of states across the African continent, especially Africa’s failure to become adequately industrialized.

The 2014 Report is entitled ‘Dynamic Industrial Policy in Africa: Innovative Institutions, Effective Processes and Flexible Mechanisms.’ According to ECA, the title is a rational addition of the ideas propounded in past editions especially that of 2011 on the part the state has to play in economic transformation. The 2014 Report also pivots on the 2013 Report which focuses on linking Africa’s vast raw materials with industrialization.

According to the 2014 Report, poor industrialization in Africa is due to the fact that African states tend to blindly copy industrialization policies from other states especially states in the West. Other factors which have contributed to Africa’s erroneous industrialization image include a lack of collaboration with other actors especially the private sector and academia.

Apart from exposing Africa’s porous industrialization policies, the 2014 Report paints a positive image of other states in the South like Rwanda, South Africa and Nigeria that have made great strides towards industrialization. The 2014 Report also proposes institutional measures for adequate industrial policies in Africa especially the Central African region, which remains the least industrialized region on the continent. It calls on African states, taking into cognizance limited resources, to invest in adequate infrastructure that would accommodate serious demands of growing industrial sectors.

There is no gainsaying that Africa is in need of policies which reflect the local realities. Governments of States especially in the Central African region have vehemently refused to put in place industrialization policies which promote free markets. Countries like Cameroon, Chad, Equatorial Guinea, the Democratic Republic of Congo, Congo Brazzaville and Gabon continue to export raw materials which could easily be processed at home if these countries were adequately industrialized. The private sector in these states also remains underdeveloped, especially as available human resources remains inadequately trained. Heavy taxes also cripple industrial start ups especially in the Central African region. There are several Africans who have returned home in a bid to start up industries, but the porous industrial policies in place would not allow them flourish.

To make sure that growth is both beneficial and long lasting to all strata on the continent of Africa, states, especially states in the Central African region; need to put in place industrial policies that fit their own local contexts as suggested in the 2014 Report. State Constitutions need to put in place a firm legal foundation upon which adequate industrialization can grow. The constitutional basis for true industrialization then needs to be backed up with legislation grown from consultations with legislators, academics, senior civil servants and members of civil society. Apart from legal instruments, there is also a need for firm administrative and judicial institutions to have clearly defined mandates of formulating and pushing through such policies especially policies which promote free markets. It does not suffice to just have legal instruments and institutions in place. Those who are called upon to follow up on industrialization policies in Africa must be adequately trained with state of the art skills.

A canker worm eating into the fabric of the already poor industrialization image in Africa is corruption. African States need to work extra hard to stamp out corruption especially with respect to industrialization.

If such measures are put in place by state actors in collaboration with the private sector, then Africa may boast of adequate industrialization by 2065. If not, then reports such as the 2014 Report may remain a waste of time and tax payers’ money.
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Posted by on July 24, 2014 in Africa Development


Aid to Africa: donations from west mask ‘$60bn looting’ of continent, Mark Anderson,, Tuesday 15 July 2014 11.57 BST

UK and wealthy states revel in their generosity while allowing their companies to plunder Africa’s resources, say NGOs.

Western countries are using aid to Africa as a smokescreen to hide the “sustained looting” of the continent as it loses nearly $60bn a year through tax evasion, climate change mitigation, and the flight of profits earned by foreign multinational companies, a group of NGOs has claimed.

Although sub-Saharan Africa receives $134bn each year in loans, foreign investment and development aid, research released on Tuesday by a group of UK and Africa-based NGOs suggests that $192bn leaves the region, leaving a $58bn shortfall.

The report says that while western countries send about $30bn in development aid to Africa every year, more than six times that amount leaves the continent, “mainly to the same countries providing that aid”.

The perception that such aid is helping African countries “has facilitated a perverse reality in which the UK and other wealthy governments celebrate their generosity whilst simultaneously assisting their companies to drain Africa’s resources”, the report claims. It points out that foreign multinational companies siphon $46bn out of sub-Saharan Africa each year, while $35bn is moved from Africa into tax havens around the world annually.

The study, which also notes that African governments spend $21bn a year on debt repayments, calls for the aid system to be overhauled and made more open.

It says aid sent in the form of loans serves only to contribute to the continent’s debt crisis, and recommends that donors should use transparent contracts to ensure development assistance grants can be properly scrutinised by the recipient country’s parliament.

“The common understanding is that the UK ‘helps’ Africa through aid, but in reality this serves as a smokescreen for the billions taken out,” said Martin Drewry, director of Health Poverty Action, one of the NGOs behind the report. “Let’s use more accurate language. It’s sustained looting – the opposite of generous giving – and we should recognise that the City of London is at the heart of the global financial system that facilitates this.”

Research by Global Financial Integrity shows Africa’s illicit outflows were nearly 50% higher than the average for the global south from 2002-11. The UK-based NGO ActionAid issued a report last year (pdf) that claimed half of large corporate investment in the global south transited through a tax haven.

Supporting regulatory reforms would empower African governments “to control the operations of investing foreign companies”, the report says, adding: “Countries must support efforts under way in the United Nations to draw up a binding international agreement on transnational corporations to protect human rights.”

But NGOs must also change, according to Drewry: “We need to move beyond our focus on aid levels and communicate the bigger truth – exposing the real relationship between rich and poor, and holding leaders to account.”

The report was authored by 13 UK and Africa-based NGOs, including: Health Poverty Action, Jubilee Debt Campaign, World Development Movement, African Forum and Network on Debt and Development, Friends of the Earth Africa, Tax Justice Network, People’s Health Movement Kenya, Zimbabwe and UK, War on Want, Community Working Group on Health Zimbabwe, Medact, Healthworkers4All, Friends of the Earth South Africa, JA!Justiça Ambiental/Friends of the Earth Mozambique.

Sarah-Jayne Clifton, director of Jubilee Debt Campaign, said: “Tackling inequality between Africa and the rest of the world means tackling the root causes of its debt dependency, its loss of government revenue by tax dodging, and the other ways the continent is being plundered. Here in the UK we can start with our role as a major global financial centre and network of tax havens, complicit in siphoning money out of Africa.”

A UK government spokesman said: “The UK put tax and transparency at the heart of our G8 presidency last year and we are actively working with the Organisation for Economic Co-operation and Development to ensure companies are paying the tax they should and helping developing countries collect the tax they are owed.”

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Posted by on July 16, 2014 in Africa Development


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Cameroon’s admittance to the status of a mixed financing nation by the African Development Bank is a bad omen to development, by Chofor Che

On the 9th of July 2014, an op-ed was published by Business in Cameroon revealing that Cameroon has been admitted to the status of a mixed financing nation by the African Development Bank (ADB). This position was corroborated by Cameroon’s Minister of Economy, Emmanuel Nganou Djoumessi. According to Business in Cameroon, this status allows Cameroon to continue to get loans at concessional rates from the African Development Fund (ADF), a subsidiary of the ADB. Cameroon can also have direct access to the national branch of this regional institution.

“The designation of this status by the ADB group shows that it recognises the efforts made by the country,” added Racine Kane, the ADB resident representative to Cameroon. “The ADB has allowed us to access the mixed financing regime. This was not done at our request. It was done in light of the strong assessment the ADB evaluators have done on our economy. This assessment established the soundness of our macro-economic criteria. It demonstrated that we have a low level of indebtedness and we are harnessing our resources. Consequently, we are a country with an emerging economy,” Minister Nganou Djoumessi added.

The ADB has dished out over 99 billion Fcfa to Cameroon to finance 91 projects, since 1972. The Minister of Economy confirmed that the ADB has loaned Cameroon over 255 billion Fcfa, for the month of July 2014 alone.

It is indeed, a shame to know that the government of Cameroon is happy with such a status. This is indeed a bad omen to development especially for a country which has decided to depend on loans from international financial institutions like the ADB. Of the 21 projects currently being financed in Cameroon by the ADB, just 23% are within the private sector. Many continue to argue that the private sector in Cameroon is weak. The truth is that government has not made adequate efforts to make the private sector in Cameroon an equal partner in development. Experience has also shown that financing which has been engineered by the government sector has been siphoned by corrupt government officials and most of this money starched illegally in foreign bank accounts.

Embracing the status of a mixed financing nation by the ADB will only make Cameroon poorer and underdeveloped. Rather than embracing such a status, policy actors tasked with reshaping Cameroon’s economy need to reflect more towards a free market economy rather than an economy that depends on loans from international financial institutions like the ADB. There is no gain saying that since 1972, after having received so much money from the ADB, the country has nothing to write home about. Infrastructure remains deplorable while youth unemployment is alarming. Cameroon needs to beef up the private sector. Taxes need to be reduced and more jobs in the private sector created. The educational system in the country has to also be revisited so as enable graduates to be ‘job creators’ rather than ‘job searchers’. These are some measures which if the government of Cameroon gives some attention to, then there will be no need to be contended about being a mixed financing nation of the ADB.

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Posted by on July 11, 2014 in Africa Development


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The 23rd Ordinary Summit of Heads of States and Governments of the African Union and African Monetary Fund exaggerated ambition, by Chofor Che, 7 July 2014

The 23rd Ordinary Summit of Heads of States and Governments of the African Union (AU) ended on Friday the 28th of June 2014 after two days of discussions in Malabo, Equatorial Guinea. In attendance were the Secretary General of the United Nations (UN), Ban Ki-moon, the Prime Minister of Spain, Mariano Rajoy and the Vice President of Cuba, Salvador Valdes Mesa.

The official theme of this summit was “Agriculture and Food Security in Africa”, but according to Alfredo Tjiurimo Hengari, a Senior Research Fellow at the South African Institute of International Affairs in an op-ed dated the 26 of June 2014, few if any of the decisions during the summit focused on farming or food. He added that this is evidence that summit themes are merely symbolic and are hardly followed by intensive discussions around the subject matter. This notwithstanding, certain sources argue that the 23rd Summit is historic because at the end of deliberations, though much did not focus on farming and food, a gigantic step was made towards the financial autonomy of Africa as a continent with the adoption of the Establishing Protocol and Statutes of the African Monetary Fund (AMF) one of the AU’s Financial institutions.

Founded in 2009, the AMF has as aim to contribute to the economic stability and the management of financial crisis in Africa, giving preference to macroeconomic development and business by promoting trade amongst states in Africa. It is expected to create a common market amongst African states by 2017. Having its sit based in Yaoundé, the political capital of Cameroon, this institution is supposed to forge for a single African currency in a bid to encourage rapid regional economic integration which for the moment remains a dilemma especially with the numerous currencies on the continent. Some analysts even argue that the multitude of currencies on the continent has grossly weakened business between African states.

The putting in place of the Establishing Protocol and Statutes of the AMF arrived at in Malabo on Friday the 28th of June 2014, does not in any way mean that the African continent will suddenly become financially independent. 15 African states need to ratify the statues for the institution to go operational. An organigram for the institution needs to be set up before the recruitment of staff including a Director General.

This is indeed an ambitious agenda my Heads of State who have decided to put the cart before the horse. Many African states are still plagued by precarious financial hurdles such as heavy taxes, trade barriers and corruption. In addition to these hurdles, the Central African Republic remains mired in armed and bloody conflict, Nigeria remains tortured by the activities of the notorious Boko Haram Sect and Kenya is still seeking solutions to the Al Shabab dilemma.

In addition to the various hurdles faced by various states on the continent, Africa is still not a force to reckon with in the United Nations (UN) Security Council. Hengari in his op-ed argues that in light of a meeting which took place in May 2014, UN Security Council reform agenda in the AU remains stalled due to the rigid proposals which propped up from the Ezulwini Consensus. Hengari argues further that concerning the current institutional setup, the AU remains state-centric. While the AU accepts regional economic communities as vital building blocks in regional integration, there is no serious formal institutional rendez-vous with the assembly or the commission.

It is high time for states to resolve domestic issues like barriers to trade, over taxation and corruption. African states need to open up their boarders for trade and not close up boarders under the pretext of fighting illegal immigration just as what has been transpiring between Equatorial Guinea, Cameroon and Gabon.

It is germane for Heads of State to try and resolve the ongoing conflicts on the continent including terrorists’ attacks from groups like Boko Haram and Al Shabab. It is important for the AU to equally engage heads of communities and officials within the frame work of the commission and assembly, especially in conflict resolution and regional integration.

Considering these suggestions is germane for the AU. If such proposals are not taken seriously then the AMF dream may be another waste of time and Africa’s tax payers’ money.


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