Africa needs to decide: The power of markets in good governance

CHARLES ODION IYORE 

Charles Iyore, a partner at DNA Capital, writes from Darenth Kent, England. He can be reached by email at Dioncta@aol.com and +447932945002 (text only)

The events of the past are a great contrast from Harold Macmillan’s vision of an African rebirth which has not yet materialised. He said, “The wind of change is blowing through this continent and whether we (The West) like it or not, the growth of national consciousness is a political fact.” The speech delivered in Cape Town, South Africa in 1960 by the then British Prime Minister, was advocating for the decolonisation in Africa.

Maurice Harold MacMillan 1st Earl of Stockton OM PC FRS (10th February 1894 – 29th December 1986) was Prime Minister of the United Kingdom from 1957 to 1963. That speech was in the main advocating for a relationship shift, to fair partnerships from forced servitude, which was the hallmark of colonialism. He lived long enough to see the new African leaders protect narrow interest (tribalism, cronyism, and violent subjugation) whilst ignoring the common good, which led to bestial rule of the unelected by military leaders through coup d’état and now back to violently secured sovereign mandates in civilian rule, all over Africa.

#Endsars, Kenya Tax Riots, Nigeria’s disabled local governments, Nude entitlement shopping in Cape Town, the development contrast between the black and white neighbourhoods of Alexandria, the quick resort to kinetic action for resolving disputes on the continent, etc. are all indications of the inability of the African elite, to husband the widely available resources of the continent, which is a prerequisite for true global economic partnerships.

DECISIONS

• The African elite must decide whether they want to create opportunities or just share the resources (seed corn) naturally available, as dictated by their whims and caprices. 
• They must decide whether they want to create institutions with good raison d’etre (purpose, reason for being) or just copy administrative formats from elsewhere, create them and then go ahead to render them redundant (disabled).
• They must decide to convert some currencies into local bills of exchange and come up with 4 or 5 currencies of international trade and settlements. 54 currencies will neither deliver fair international, nor fair regional, trade and exchange. 
• They must decide which four or five countries on the continent can become hegemon for regional development planning, since all heads of states want to remain chiefs.
• They must decide how to put their copied administrative structures into good use, for building stable economies, preparing their young for tomorrow’s responsibilities and ensuring dignity of life for the aged.
• They must come to the realisation that a Marshall plan isn’t coming any time soon nor is the kith and kin capital that financed the Asian tigers’ industrialisation, about to be formed for Africa.
• They must come up with their homegrown development strategy, like the US did to overtake Europe, using planned assembly-line mass production, imposed on the European family-based, industrialisation model.

Understanding markets and the concept of money

To do the above, they must understand the power of markets as the only veritable platforms for sustainable trade and exchange. That may be quite different from the ownership of the key factors of production, as espoused by the many political ideologies. Markets allow for easy entrance and exit, based on the free choice of the consumer at every level. The competition for consumers is won by the quality of products and his (consumer’s) underlying sentiments, which can be a play of many factors, affordability, quality, nationalism etc. This can be moderated by public sector order books, but with reasonable margins of quality. Markets’ regulation is the deft use of these instruments in the defence of public good, whilst sustaining economic growth.

Against that background it is obvious that the African elite do not quite understand the concept of money as the reward impetus for sustained economic growth.  That understanding is what built the old African empires (using cowries, manila and other payment instruments)

1. That money, in value, is not the absolute numerical units but what it can buy, to reasonably meet human hierarchy of needs. Without that understanding, labour unrest will always disrupt the little production in the few going concerns. 
2. That fair exchange rates can be reached if education, health and other services are enabled domestically, in a tapestry of well thought-through linkages.
3. That, accumulating local currency anchored on foreign exchange, without value addition, is the easiest way of getting into middle income traps and permanent insufficiency. 

Arrogance and impunity

The arrogance and impunity, common amongst the African elite is far from a show of strength but a reflection of their befuddled state as it regards the critical issues of state governance.

They must seek administrative know-how to manage their institutions in a manner fit for purpose, find ways of creating opportunities as against settlement with state patronages, and deploy technology to reduce and ultimately eliminate the buckling of the markets they superintend.

The choice of the blame game of the International Monetary Fund (IMF), World Bank and international agencies cannot fully explain the slacks in the domestic production arrangements on the continent. The use of writers to peddle their positions in the mass media is a disservice to their people and a ploy to keep them distracted.

The formation of private capital (local & international) 

Economies as badly underdeveloped and dysfunctional as they are in Africa, require a great external fillip as in funding to stabilise them and to join the global economy beyond the supply of unfairly priced industrial raw materials. Europe got a Marshall plan and Asia, significant capital and of ethnic Chinese origin that helped the Asian tiger economies. Efforts by big private equity companies have found engagement difficulty in Africa. The formation of significant private capital will be difficult but not impossible to transform Africa. The domestic plumbing however, has to be sound and the economic growth direction clearly defined by her leadership.

The world is waiting for Africa to decide and realise Maurice Harold Macmillan’s dream for the continent. 

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