×
NewsDay

AMH is an independent media house free from political ties or outside influence. We have four newspapers: The Zimbabwe Independent, a business weekly published every Friday, The Standard, a weekly published every Sunday, and Southern and NewsDay, our daily newspapers. Each has an online edition.

Africa 2012: Confronting the triple challenges – economic inequality

Opinion & Analysis
The post-colonial experience has demonstrated that there is no causal link between political and economic freedom to suggest that we need to open new conversations on how best the economic inequalities that exist between different races and classes can be reduced in order to build societies and nations that offer hope to all. The problem […]

The post-colonial experience has demonstrated that there is no causal link between political and economic freedom to suggest that we need to open new conversations on how best the economic inequalities that exist between different races and classes can be reduced in order to build societies and nations that offer hope to all.

The problem of poverty and inequality has no age and is not unique to post-colonial states. Developed countries face their own challenges to disallow any attempt at engaging in intellectual dishonesty in so far as linking economic inequality with the level of economic development of nation states. It is, therefore, irrelevant where the poor are situated as poverty does not suffer any geographical limitations.

It unites the developed and developing states yet in the pursuit of political point scoring it is not unusual for actors in developing states to locate poverty and economic inequality in the broader framework of neocolonialism and imperialism even though the developed countries have not yet found a cure for poverty and economic inequality.

In many of the developed nation states, welfare of the majority has been compromised by the restriction of benefits in response to the impact of the global economic meltdown to the extent that social and economic cohesion has been undermined.

The colonial order produced its own racial and class economic structures that allowed conclusions to be made that asserting the civil rights of the majority of the people would produce cohesive, inclusive, more equal and prosperous nations.

Regrettably, the post-colonial experience has confirmed, if any doubt existed, that questions of economic inclusivity and equality require thought leadership to resolve. Such knowledge base can only add value if it is democratised and shared.

The causes of economic inequality are more elusive to locate, but what is clear is that an opportunity-based society is more likely to facilitate the upward mobility of the majority than looking up to the state and its actors for salvation.

South Africa, Africa’s economic giant, has historically been ranked as one of the most unequal societies yet it is a magnet for African economic migrants. Despite its inability to assimilate the majority, it is ironic that if the majority of Africans were to be asked which African state they would want to live or even send their children to school, South Africa may very well top the list.

The impact on poverty and inequality of the growth experienced since 1994 has been disappointing, leading to serious questions being raised on what is required to create a society that is economically mobile.

The inherited dualistic economy remains intact and the inequality along racial and class lines is more pronounced now than at the point power was transferred to a democratic government.

The need to identify the drivers of the reproduction of inequality in post-colonial Africa cannot be understated nor can the need to critically examine the kind of policy levers available to help mitigate the increased inequality in Africa.

The structure of post-colonial African societies is not God-given, but a consequence of the choices and decisions made both before and after independence.

The structure of a bottle can be used to describe the structure of many African societies with a small neck underpinned by a structure that accommodates more of the liquid. Only a few can realistically pass through the neck of the economic bottle. Some argue that the people at the top should be held responsible for the condition of the people at the bottom. Benefiting from this kind of thinking, a conclusion is often made that the state and its actors ought to use policy interventions to reduce inequalities forgetting the fiscal limitations of a state that is financed by a small revenue-generating class of citizens.

Africa’s post-colonial constitutional order is founded on the premise that the state is obliged to respect, protect, promote and fulfil the rights’ of all citizens yet the achievement of economic rights has proved to be more challenging than the a quidition and excercise of civil rights. The inherited state was never meant to address the needs of the majority that operated outside the economic bottle.

Human development and socio-economic justice require a different approach to public policy. The state by nature and construction can never provide the kind of answers required to advance the interests of all citizens.

The few who find themselves at the neck of the economic bottle often argue that to the extent that their station in life is a consequence of voluntary commercial contracts, they bear no responsibility for lifting the poor.

Such argument is premised on the simple logic that those who climb the opportunity ladder do so without the assistance of the poor and more significantly that even where incentives exist such instruments in and out of themselves will not change the fate of those who refuse to exchange effort for gain.

It is easy to arrive at the conclusion that economic inequality is a consequence of the conspiracy of the rich and powerful. Such a conclusion helps explain why universally the rich and powerful are easily targeted in times of economic turmoil or in circumstances where the fruits of economic growth are not shared.

If the economic model is structured to reward with profit those that voluntarily through their own devices pass on goods and services to people who are willing to pay the price of the goods and services offered, then sharing necessarily creates a problem for it would not be justifiable for rewards to be diverted to those who have played no part in the creation of the goods and services.

Equally, government actors that insult the drivers of economic growth, will soon find that people end up operating outside the economic bottle and revenues that could accrue to the state will never find themselves in the formal system.

What then needs to happen in order to reduce economic inequalities that are incapable of being cured without undermining the human spirit from which sustainable economic growth can be secured?

This is the question that must be addressed soberly and honestly. It is easy for the working people to focus on exploitation of labour without looking at the alternative that can arise when employers are non-existent or milked dry.

The protection of the rights of citizen to their property must then be the insurance policy that can help create a society that delivers the promise of a more equal and caring society.

Such a society requires citizens to realise that policies that limit economic freedom and undermine property rights have predictable outcomes and economic inequality is one such outcome that is inevitable.

Reducing inequality while at the same time promoting more and better jobs in post-colonial Africa requires a multipronged approach. Such an approach should be a product of negotiations, respect and different conversations to the ones taking place among Africans on what matters most in order to secure a prosperous and inclusive future for all.

So much is expected from state actors without recognising that inequalities can be exacerbated by looking up to empty vessels that acquire status and power from processes that are incapable of producing smart outcomes.

Human beings whether operating in the state or non-state addresses have their own limitations to allow the responsibility of advancing one’s interests on the shoulders of another, let alone the state.

The more one expects the state to be caring, the more one must accept that the burden to pay for such benevolence will be borne by hardworking people operating outside the state.

The respect that we normally accord to state actors ought to be rightly placed on the people from whom state revenues are derived.

The poor can find better protection from policies that allow more players to enter the economic process. A growing and dynamic society offers hope for it has an in-built incentive system that can sustainably convert unemployed people into economic agents.

Africa’s better days lie ahead only when Africans realise that salvation is not found in the minds of the few seemingly powerful people, but in fighting for a society that respects the rule of law.

The more the state collects from the few active economic agents the incentive to produce diminishes and the poor often end up paying the ultimate price and economic inequalities take root.

Accordingly, choices must be made and it would be folly to direct the anger at people who produce the little income from which state actors use to claim credit for economic progress and ultimately use to remain in power.

Mutumwa Mawere is a businessman based in South Africa. He writes in his personal capacity.