As discussed in Part 1, Erin Burnett's program "Dollars and Danger: Africa, the Final Investment Frontier"managed to present a balanced portrayal of the business challenges and opportunities in Nigeria and indeed the entire continent. While my last post focused on the program's discussion of Nigeria, this post will concentrate on other larger issues related to investment in Africa.
Upon watching the program, I was happy that the African continent was not portrayed as merely a poor, dirty continent waiting with an outstretched hand for assistance and salvation. In fact I was satisfied with the range of discussion the show packed into a 1 hour program. For instance, the revelation that during the current economic downturn, foreign direct investment in African economies surged by 16% in 2008, while dropping by 23% worldwide, was eye opening. Africa is indeed the last remaining frontier for potential high return investment. Many are clamoring to the continent because clearly, the profits outweigh the risks.
However, reinforced for me was an issue that continues to puzzle me. Why has the investment in Africa not been maximized to benefit the continent's people? I am not talking about the benefits, or lack thereof, of foreign aid, an issue which has been adequately addressed by writer Dambisa Moyo and many others, who argue that current attitudes toward foreign aid must be reconsidered because foreign aid has failed to truly help the African continent. What I am talking about is foreign money invested not loaned or granted as charity to African countries. Far too often, the investment monies that enter a country fail to make its way down to the majority. This, unfortunately, leaves many Africans poor and without adequate health care, infrastructure and affordable education.
Personally, I believe that the lack of political accountability in many African countries is to blame for the disparity between the possible benefits Africans could have enjoyed from foreign investment and the current reality. The fact that far too many African leaders have historically treated central banks as their personal slush funds, coupled with corruption and the inability to get worthy candidates in leadership positions has prevented the progress that could have been possible. To take full advantage of the many large foreign businesses which come to the African continent for profit, a system that allows the people to genuinely hold their leaders responsible for failures and also rewards them for accomplishments is necessary in most parts of the continent. The will only happen when we Africans realize that we deserve to not be cheated by our leaders and should not be relegated to the scraps from the table.
SELLING YOUR 'SOUL' TO THE HIGHEST BIDDER
Learning that South Korean company Daewoo Logistics somehow 'leased' half of Madagascar's arable farm land shocked me. While I understand that Korea made a business decision to ensure food security for its citizens, I wonder how such "neo-colonialism" (so deemed by the U.N's Food and Agricultural Organization) benefits the people of Madagascar? Keep in mind that the deal is apparently for 99 years and that the only benefits for the Malagasy people will be "employment opportunities" because Daewoo Logistics will not pay fees for the lease, but will only provide "the means to allow exploitation and development of the land."Africa's land is the source of its food and the resources the continent's nations rely upon to finance its economies. That certain governments would therefore relinquish ownership/control of farm land is akin to selling the people's soul to the highest bidder. It is unconscionable. And one cannot help but ask where the money from this deal has gone, particularly as over 60% of Malagasy people live below the poverty level.
But, Madagascar is not the only African country witnessing this new capitalistic approach to food/agricultural security. Saudi Arabia is also seeking to buy land in Africa so as to find locations for agricultural and livestock industries to support its citizens. Saudi Arabia hopes to buy land in Ethiopia and Sudan. It would be redundant to point out that Ethiopia has faced severe famine in the past, is currently is in a shaky peace deal with its neighbor Eritrea and is also neighbored by Somalia. As for Sudan, the continuing Darfur crisis and the many internally displaced men, women and children did not stop its president (for whom the ICC has issued a warrant for arrest) from entering into agreement with China to get funding for a new palace in exchange for oil to fuel China's flourishing economy and growing middle class.
These examples illustrate the dilemma of foreign investment in certain parts of Africa - it props up illegitimate and unworthy governments by putting large amounts of money within their control, to the detriment of the people. That being said, foreign direct investment (FDI) is a necessary element in the modern economy regardless of whether that economy is in the United States, Europe, Asia or Africa. Every nation, regardless of its wealth, clamors for such investment as it benefits their economies and ultimately their citizens. It is just that in too many African countries, not enough citizens benefit from FDI as much as they should. And, this is a problem that Africans themselves must strive to solve or else, the continent will allow certain interests to sign away the continent's future and in the decades to come we Africans will be no better off than we are now.
Ultimately, CNBC's program, "Dollars and Danger: Africa, the Final Investment Frontier", managed to take a frank look at Africa and the incredible financial possibilities it holds for those that , as fellow blogger N.I.M.M.O. commented "dare to come". These same investors that dare to come to the African continent, the money and expertise they bring can be a necessary component for African development. But for African countries to truly become competitive in the global economy they must use the profits from that investment to provide the basics for their citizens. Once that happens, Africa's approximately 900 million citizens will do the rest.
- A Nigerian Reviews "Dollars & Danger"
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- Using Nigerians to Re-Brand Nigeria
- Re-Branding Nigeria: Success Is The Key
- Rebranding Nigeria: With Britain's Help?