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African elites mortgaging our future

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When you listen to our African leaders, you are tempted to think that poverty is entirely a colonial legacy.

In fact, they sound as if colonialism was a curse whose shackles are too hard to break, therefore no one should blame them for not doing enough to develop ourselves.

Africa is the richest continent in terms of natural resources and yet the majority of its people languish in poverty.

But African leaders blame the West for everything including colonial machinations without looking at their poor management of the economies.

It is a fact that colonialism stole from Africa. Even today the Western nations are still exploiting African resources but with our leaders’ permission.

Every day billions of dollars from the extraction of oil and other precious minerals are exported to the West, while millions of people die of hunger and curable diseases in Africa.

In addition, the African elite expatriate savings, usually illegally into offshore accounts and assets-leaving little or nothing for entrepreneurial investment and development of the economy.

It is such a shameful scandal that the money that is supposed to remain in Africa for Africans is further expropriated out of the continent by none other than the same African leaders.

The Economic Commission for Africa estimates that nearly 40% of Africa’s private wealth is kept outside the continent.

The remaining small economic surplus goes towards consumption and pay for the running of state machinery such as military at the expense of serious development programmes.

This means that, in addition to the profits from the sale of minerals and oil by multinational companies to the West, the African elites will add another 40% of the continent’s income into the Western markets denying Africa an opportunity of a homegrown economy.

Similarly, skilled workers will follow this capital as it creates investment and job opportunities in the host Western markets leading brain drain.

Capital follows peace, stability and security, and skilled labour follows capital which explains the inability of African states to retain skilled manpower needed to develop the countries.

The result of the departure of 40% income and a skilled manpower is an economic disaster which normally prompts these African leaders to seek solutions in foreign aid from the IMF and the World Bank to resuscitate their economies.

Isn’t it logical to conclude that the same 40% African external savings, which has been invested in the West, is the same money that is lent to African governments for development programmes at high interest?

Can we blame the West for the heavy debts in Africa? A large part of Sub-Saharan African surplus leaves the continent as debt repayment. It is surely not the West that is mortgaging the future of the continent but its leaders.

History shows that homegrown economies are stronger than those built around external financial aid. Despite the mineral abundance, the South African economy is strong because it is homegrown with less than 10% of its private savings kept outside.

The 10% represents companies owned by multinationals. South Asia has 3% external savings while South East Asia only accounts for 6%.

Because the majority of their citizens’ money and local company profits are saved locally and service local economies, their regions are now among the strongest economies in the world which include China, India, Japan etc.

If more money is saved locally, it enables the local entrepreneur to invest these savings profitably thereby creating employment opportunities for both skilled and unskilled people willing to trade their labour for cash.

As this organic process takes shape, the faster the economy grows.

Over and above, the most important factor determining the level of development of any country is the degree to which it is able to control its own political, economic and social space and therefore its policies.

It is also determined by the ability of a country to protect its entrepreneurs and local investments.

Tapiwa Gomo is a development communication expert based in Pretoria, South Africa

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