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Tuesday, 29 October 2019

In their annual meeting at the United Nations in 2005, world leaders agreed on a common economic agenda. This was to halve – between 1990 and 2015 – the proportion of the world’s population living on less than one dollar a day. It’s been nearly 15 years since this resolution.

The world has certainly seen economic progress but it is not even. And countries in Africa lag behind the global average.

Global wealth has more than doubled from US$170 trillion in 2000 to $360 trillion in 2019. Global wealth per adult is at a record high of $70,850.

Mean wealth per adult in Africa is $6,488. In Mozambique it is as low as $352.

The proportion of the world’s people living on less than two dollars a day (an updated measure of extreme poverty) has more than halved from 35.9% in 1990 to 10% in 2015. But in sub-Saharan Africa the figure still stands at 41%, according to the World Bank. The bank estimates that 87% of the world’s poorest people will live in the region by 2030 if the trends continue.

Life expectancy has been growing by 16 weeks a year so that those born today are likely to live 20 years longer than a child born in 1960. In Africa, average life expectancy remained at a level that the rest of the world passed in 1974 and is rising at a snail’s pace.

The continent still pays up to 30 times more than the rest of the world for generic medicine, despite a world-wide decline in drug prices. And energy prices in Africa are more than three times higher than in the United States.

Graph global poverty rate, 1981 - 2015. Our World in Data

African countries have missed important opportunities in the past two decades that could have ensured these graphs looked different.

Interlocking problems: debt and aid

In 2004 UK Prime Minister Tony Blair initiated the Commission for Africa, to “carefully study all the evidence available to find out what is working and what is not.”

The Commission’s main findings were:

The problems… are interlocking. They are vicious circles which reinforce one another. …Africa will never break out of the deadlock with piecemeal solutions and policy incoherence. They must be tackled together. To do that Africa requires a comprehensive ‘big push’ on many fronts at once; which requires a partnership between Africa and the developed world…. Africa is very unlikely to achieve the rapid growth in finance and human development necessary to halt or reverse its relative decline without a strong expansion in aid.

Blair then called for two simultaneous actions: forgiving the continent’s debt, and doubling development assistance. This call was partly heeded.

Fourteen African countries benefited from the 2005 multilateral debt relief initiative. That relief saved Nigeria – the region’s largest economy – $31 billion. A host of other countries benefited too, ranging from Benin ($690 million) to Ghana ($2.938 billion).

But these countries didn’t make the most of the relief they’d been given. Debt in many African countries is on the rise again. What’s more concerning is that debt isn’t being incurred for useful purposes, such as plugging the infrastructure gap. Instead, according to an IMF report, the rise is being driven by corruption and mismanagement.

As for aid, since 2005 the flow to Africa has risen by 50%, reaching $49.27 billion in 2017. African countries received more than half a trillion dollars ($0.62 trillion) in aid in the decade and a half after Blair’s appeal.

However, the continent now gets less donor aid per recipient than most regions in the world: an average of 14 cents per person per day. This is because its rapidly rising population size in recent decades is not being matched by the size of aid inflows.

Added to this is the fact that many African countries have failed to stem the flow of illicit money from the continent. An estimated $30.4 billion was transferred from African countries between 2000 to 2009.

Such outflows strip countries of desperately needed financial resources for investment in hospitals, schools and roads.

To stop this trend, Africa needs the help of advanced countries, because some of these countries have been and still serve as havens for illicit funds originating from repressive African regimes and despots.

In “Overcoming the Shadow Economy,” Joseph Stiglitz and Mark Pieth forcefully argue:

In a globalised world, if there is any pocket of secrecy, funds will flow through that pocket. That is why the system of transparency has to be global. The US and EU are key in tipping the balance toward transparency, but this will only be the starting point: each country must play its role as a global citizen in order to shut down the shadow economy—and it is especially important that there emerge from the current secrecy havens some leaders to demonstrate that there are alternative models for growth and development.The Conversation

Zuhumnan Dapel, Priors: IDRC Fellow at the Center for Global Development; Public Policy Fellow, Woodrow Wilson Center, Scottish Institute for Research in Economics

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Published in Opinion & Analysis
US-based Malaysia woman duped a Republican official into giving her hundreds of thousands of dollars to invest in a fake Nigerian oil venture.
 
Siew Im Cheah, 51, persuaded Jimmy Rhee, who at the time was Virginia Gov. Robert F. McDonnell’s assistant commerce secretary, that she had connections in the oil and entertainment businesses and convinced him to invest $300,000 in the venture.
 
“She was always creating, manipulating a fictitious situation and environment,” Rhee told the Washington Post last week, adding that Cheah had financial documents that appeared to bolster her claims. “She was a master at that.”
 
Rhee said he once visited Cheah while she was sick and saw flowers with a card that appeared to be signed by former President Barack Obama, which he now believes she sent to herself. When he started asking Cheah to pay him back, she brought up her plans to build a training facility for the Washington Wizards.
 
The supposed partner for that project was Lawrence Jones, who was her boxing coach. Shortly after they met, she bought Jones a Porsche and urged him to pursue his dream of owning a gym. He said the situation turned into a “nightmare.”
 
“I felt obligated to be at her beck and call,” Jones said.
 
Cheah would call him in the middle of the night and demand that he come to her hotel for meetings with visiting oil executives still on African time. None of the business deals moved forward.
 
“She was telling me that her dad was killed in a plane crash that had been hijacked by terrorists,” he said. “It was so elaborate. Who would make something up like this?”
 
Jones cut off contact with her after about a year.
 
Among the lies she told her other victims: she planned to buy a majority stake in the Wizards, she was the granddaughter of Singapore’s first prime minister, and she was a close friend of Obama’s.
 
Prosecutors said Cheah stole the identities of at least six people, including her roommates and nail technicians. One federal prosecutor referred to her as “a one-woman crime spree” in court. They believe she spent the money on high-end cars, plastic surgery, and designer handbags.
 
Earlier this year, Cheah, who entered the United States on a visitor’s visa in 2001, pleaded guilty to identity theft and fraud after she was caught speeding in Virginia in a Porsche using a former roommate’s driver’s license. She was sentenced on Oct. 4 to 51 months in prison.
 
“She’s been a very generous woman,” her attorney Bill Hicks said. “People invest money all the time; sometimes they win, sometimes they lose.”
Published in Bank & Finance

Zimbabwe's national airline has resumed flights to South Africa, the company said on Monday, after a halt last week when South Africa's state-run airports management firm barred the airline from using the country's airports over unpaid fees.

Air Zimbabwe's sole aircraft in operation was grounded last week by Airports Company South Africa (Acsa), which said the airline had failed to pay landing and parking fees, passenger service charges and an undisclosed amount towards clearing its arrears.

"There were negotiations that were held, and we were given clearance to take off and land on Friday. It (Air Zimbabwe's plane) did take off for South Africa today as scheduled," Air Zimbabwe spokesman Tafadzwa Mazonde told Reuters.

He declined to say whether Air Zimbabwe had cleared its debt or come to another arrangement, such as a part payment.

An Acsa spokeswoman was not available for comment.

Air Zimbabwe owes foreign and domestic creditors more than $300 million. The Zimbabwe government put the airline under administration last year and later invited bids from potential investors as it seeks to privatise it.

 

- Reuters

Published in Travel & Tourism
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