Tag Archives: Trade

Europe could do more for Africa

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji

It is a little annoying that this year’s African Union (AU) – European Union (EU) summit (29-30 November), the fifth now, has been overshadowed by recent revelations by CNN – an American news organisation much reviled by President Donald Trump – of black Africans being enslaved in Libya on their way to Europe illegally. Europe’s concerns about increasing illegal migration from African countries, often at great peril – for those who choose to make the journey, that is – would ordinarily have been the focal point at the summit regardless. European governments have committed to helping with evacuating the victims and prosecuting the culprits. Of course, it is not unlikely that the most secret bit of their ruminations wonders if the ugly phenomenon may not finally be the deterrent they so desperately seek to stop the rising illegal immigration rate of Africans to Europe. European governments have been at their wits’ end trying to stop the uncontrollable flow hitherto. Of course, the bad press that comes with many that die on the journey across the sea is not necessarily helpful. And it speaks to the motivation of the travellers if despite the dangers of the journey, more continue to embark on it. Even so, EU countries have become more stringent, as their citizens increasingly worry about losing jobs to migrants who do not mind lower pay; albeit their eyes are typically set on better skilled fellow Europeans. Upon arrival on the shores of Europe, often that of Italy, and after being rescued, the few that “made it” amongst the multitude at the beginning of the perilous journey back home, are sent to camps where they would sometimes stay for months or years. In the past, they could transition from these camps to what they eventually find to be a less than ideal “dream life” in Europe. Lately, sterner restrictions have increasingly made even this less likely: more are repartriated home these days. But these are the lucky ones. They are alive and have a chance to rebuild their lives. That said, the proportion of Africans that make this dangerous journeys pale in comparison to the many, youths mostly, who stay behind and try to make a meaning of their lives. Themed “Investing in the youth for a sustainable future”, it is this latter group that the 5th AU-EU Summit in Abidjan focuses on.

Faith and works
So at least, European governments know what the problem is. 60 percent of Africa’s 1.3 billion population is aged below 25 years. That is 761 million people. One estimate put the number of young Africans entering the labour market annually at about 10 million. Of these, only about 30 percent secure wage employment. The other 70 percent? We know some seek greener pastures abroad, for sure; and clearly in not so salubrious ways for most. Crucially, the majority are idle, thus posing a security risk not only to their countries, the African continent, but abroad as well. Trying to resolve the problem is at the core of the joint Africa-EU strategy. The advocacy here is that what has been done thus far, laudable though they are, could be much more. The European Union is quick to tout its 7-year €30 billion official development aid to 2020, for instance. It is a drop in the ocean. Compare with this: Africa needs at least $90 billion annually over at least a decade to plug its infrastructure deficit alone. There is a consensus, at least, that aid is not the solution. Better trade, could be, though. In this regard, the EU could be more forthcoming. Its Economic Partnership Agreements (EPAs) with African countries are controversial. Some African countries have reservations about them; Nigeria for instance. And there are quite a few amongst the ones that signed them which did so grudgingly. One issue is usually about the potential loss of revenue that African governments would suffer from allowing reciprocal tariff-free European access to African markets. To be fair, there has been some accommodation by the EU to compensate for this. The problem is that it pales in comparison to the potential loss. The great matter is how the EPAs in their current form might stymie Africa’s industrialization. Of course, it could be argued that automation and the so-called fourth industrial revolution are greater and more imminent threats. Even so, Europe should back its good faith with more action.

Flattered Trump achieves little in Asia

By Rafiq Raji, PhD

Donald Trump, the American president, concludes his 5-country Asian trip in The Philippines today (14 November). Heralding his arrival in Beijing a week earlier – his third stop after earlier ones in Japan and South Korea – was a reminder of China’s trade surplus with America, data for which came out at US$26.6 billion for October; about US$223 billion thus far this year. And if he thought his trip would make China buy at least as much American goods and services as go the other way, he was a tad disappointed. Of course, there was much pomp about the US$253.4 billion in deals signed between the two delegations. But much of these were not substantive. And some were actually just old deals. The extent of the divergence in the views of the Chinese president, Xi Jinping, and President Trump, would become writ large in Da Nang, Vietnam, at the Asia-Pacific Economic Cooperation (APEC) summit, where they both headed afterwards. They provided sharply contrasting visions on trade in their speeches to the gathering of Asian-Pacific leaders. While President Xi espoused multilateralism, openness, and globalisation, Mr Trump was unapologetically insular in his views. Brief incidental interactions with Russian president, Vladimir Putin, at the APEC summit, in place of a much anticipated formal meeting, did not yield much either. Because even though the Kremlin published a joint statement on the crisis in Syria, there was not much there that was new; a missed opportunity. It did not help of course that the controversy over alleged Russian meddling in the 2016 American presidential elections would not just go away; no doubt made worse by Mr Trump’s equivocation on the matter. In fact, what little progress that was made during his time in Asia was actually on matters antithetical to his agenda. A deal was reached by the 11 countries remaining in the Trans-Pacific Partnership (TPP) trade agreement he ditched, for instance; albeit there were a few hiccups here and there before that came about.

Playground rhetoric
Mr Trump came out a little bruised on the North Korean matter as well. After initially striking a somewhat conciliatory tone towards the communist regime, urging it to do a deal over its nuclear weapons programme, he adopted an aggressive posture shortly afterwards in his address to the South Korean legislature; defiantly telling the volatile man up north not to test America’s might. Unsurprisingly, the North Korean regime replied with insults, calling Mr Trump an ‘old lunatic’, ‘warmonger’ and ‘dotard.’ Not one to take such expletives lying down, the American president threw back a few of his own, suggestively referring to Kim Jong-un, the North Korean leader, as ‘short’ and ‘fat’. Even so, if there is a slight chance of some deal with the communist regime, Mr Trump’s unusual style probably makes him best-placed to make it happen. China remains crucial to any potential progress, however. Unfortunately, they did not offer more than they already had on the matter.

Flatter to naught
The Japanese were more gracious at least; they imposed additional unilateral sanctions on North Korea. Not that this could necessarily be attributed to Mr Trump’s powers of persuasion: North Korea fired missiles over Japan in mid-September. And this was despite Mr Trump’s taunts at prime minister Shinzo Abe: He went on unabashedly about how the Japanese were inferior to Americans and wondered aloud why the Japanese did not shoot down the North Korean missile, suggesting how if they had American-made weapons, they would have been able to do so easily. (The Japanese are officially pacifist but have a military for self-defense purposes.) Little wonder then his Japanese trip turned out to be a failure somewhat. He did not get much from them on trade; a major issue for him. (Like China, Japan also maintains trade surpluses with America; albeit at 9 percent of the total American trade deficit, it pales in comparison to China’s 47 percent.) As if to buttress the point, the Japanese ruled out a potential Free Trade agreement (FTA) with the Americans, Mr Trump’s preferred route to dealing with trade imbalances. Instead, Japan led the effort to ensure a deal was reached on the so-called TPP-11. The Asians were all smiles but gave him little.

Also published in my BusinessDay Nigeria newspaper column (Tuesdays). See link viz. http://www.businessdayonline.com/flattered-trump-achieves-little-asia/

What is the point of Trump’s Asian trip?

By Rafiq Raji, PhD

Donald Trump, the American president, arrived Beijing today (8 Nov), the third stop on his 5-country Asian trip, after earlier stops in Japan and penultimately, South Korea. Heralding his arrival was a reminder about China’s trade surplus with America, which came out at US$26.6 billion for October; making it a total of US$223 billion thus far this year. President Trump would like the reverse to be the case. Unfortunately, it would continue to be a source of frustration for him, and in fact any other American leader who desires that China buy at least as much (if not more) American goods and services as go the other way. Incidentally, China is already making headway in the sophisticated industries that America may have once relied upon to stay ahead; which often are in partnership with American companies in China itself. And even as Mr Trump tries to bring back American companies back home from places like China, with jobs in tandem, the economics still favours them staying abroad; albeit not necessarily in China but in cheaper Southeast Asian countries. Turns out, Mr Trump is scheduled to address the 2017 ASEAN summit on 14 November in The Philippines, where bashful and often uncouth president Rodrigo Duterte may be just the ideal host for his similarly mannered American counterpart. And such is the importance the Americans attach to it that Mr Trump’s itinerary was extended by a day to accommodate the ASEAN speech. He would not be leaving China empty-handed, though. At least US$9 billion in deals are expected to be made between chief executives of American companies on Mr Trump’s entourage and their Chinese counterparts, commerce secretary Wilbur Ross is reported by CNBC to have said. (Another official is reported to put potential deals to be signed at US$250 billion.)*

Rocket man
With a belligerent leadership at the helm and reckoning by the Russians that in two to three years, it could have missiles able to hit America, North Korea remains a thorny issue. On his first day in Seoul (7 November), Mr Trump struck a somewhat calm tone on the great matter; urging the North Korean regime to come to the negotiating table and do a deal. Next day, while addressing the South Korean legislature, it was the reverse; defiantly telling the communist regime up north not to test America’s might. These are all very well; but fact is, Mr Trump achieved nothing there. And the elements came up against him en route to the demilitarized zone between the two Koreas, as his chopper could not risk an unanticipated fog. The Japanese, who he visited (5-7 November) before the Korean leg, tried to be gracious at least; they imposed additional unilateral sanctions on North Korea. Not that this could be attributed to Mr Trump’s persuasive powers: North Korea fired a missile over Japan in a show of strenght recently. Of course, Mr Trump could not stop himself from taunting prime minister Shinzo Abe on why the Japanese did not shoot down the missile. Ever the salesman, he did not forget to make a pitch for how American weapons would be able to easily do just that, though. (The Japanese are officially pacifist but maintain a handful of troops, supposedly for self-defense purposes.)

Emperor’s new clothes
Of course, Mr Trump did not see how ill-fitting it was to boast about American might to the face of Mr Abe; going on unabashedly about how the Japanese were still second fiddle to Americans. Little wonder then his Japanese trip turned out to be a failure somewhat. He did not get much from them on trade; a major issue for him. Like China, Japan also maintains trade surpluses with America; albeit at 9 percent of the total American trade deficit, it pales in comparison to China’s 47 percent. As if to buttress the point, the Japanese ruled out a Free Trade agreement (FTA) with the Americans, Mr Trump’s preferred route to dealing with trade imbalances; as opposed to the now 11-country Trans-Pacific Partnership (TPP) trade agreement that he ditched but which the Japanese are keen on, for instance. An FTA with the Japanese would have been hailed by Mr Trump as a victory. A highly likely meeting with Russian president, Vladimir Putin, on the sidelines of the Asia-Pacific Economic Cooperation (APEC) summit in Vietnam, his next stop from China, would no doubt be overshadowed by ongoing investigations back home into Russian links of Mr Trump’s associates during his presidential campaign. In the meantime, he should enjoy some relief at his current stop: the Chinese reportedly plan to treat him like an emperor. That is not usually a compliment.

*Trump & Xi announced US$253.4B in deals on 9 Nov 2017; albeit a significant portion is not substantive, as they are simply MoUs and so on.

Ghana: Ease faster

By Rafiq Raji, PhD

After earlier boasts about no plans to extend Ghana’s US$918 million aid programme with the International Monetary Fund (IMF), which the country agreed to in April 2015, the still new Nana Akufo-Addo administration was saved from a potential mis-step in late-August, when the Bretton Woods institution graciously decided to extend the package anyway, by another year from April 2018; much to the relief of market participants. Another good news came in one day after the Bank of Ghana (BoG) monetary policy committee (MPC) started its meeting in September (decision due on the 25th): the International Tribunal for the Law of the Sea (ITLOS) ruled Ghana was within its right to drill for oil in an area of the Atlantic Ocean it considered within its maritime boundary, after Ivory Coast contested its right to do so. Had the outcome been adverse, the US$6 billion Tweneboa, Enyenra, and Ntomme (TEN) oil fields located in the disputed area, which produced first oil in August 2016 and are expected to pump 80,000 barrels per day in 2017, would have been in jeopardy. Prices for Ghana’s still dominant export, cocoa, in the international markets remain poor, however; down about 30 percent from a year ago. And even though gold, its other major source of foreign exchange, has been doing well in the international markets lately (up 15 percent from December last year), local production is likely to suffer this year, as the authorities clampdown on illegal small-scale mining (locally termed “Galamsey”). So put together, the authorities’ finances may suffer a little this year.

Take control and diversify
The authorities are not standing idly by while this happens. Together with Ivory Coast, plans are afoot to ensure both governments have greater control over international cocoa prices. In this regard, they plan to build special warehouses to store cocoa beans, enabling them to mop up excess stock when there is risk of a supply glut like is the case currently, or add to supply when there is a scarcity. That capacity won’t be in place for at least another year, though, as a US$1.2 billion loan request to the African Development Bank (AfDB) is yet to be approved, making it more likely that the infrastructure may only become available in the 2018/19 season. The authorities are geared for the current 2017/18 season, though. In September, the Ghana Cocoa Board (Cocobod) secured a US$1.3 billion loan from international banks to fund purchases from farmers, which would start in October. The amount is almost 30 percent lower than the US$1.8 billion it raised for the 2016/17 season. Considering that even that much ran out months before the end of that season, with the Cocobod having to seek US$400 million in bridge financing, the ability of the board to offer attractive prices in the 2017/18 season may be similarly constrained. Thus, smugglers who go across the border to Ivory Coast for better prices are likely to continue having bumper paydays for a little while longer.

Still, there is more the authorities could do to diversify the country’s agricultural base. It does not make sense that a country with such fertile land imports almost three-quarters of its food supply. Efforts to boost local production have not been successful, however. True, there have been investments here and there. But as structural constraints remain, returns have underwhelmed. In some cases, factories built to process agricultural produce simply closed shop, after supply of inputs failed to keep pace. Authorities expect that its ambitious “one district, one factory” programme would change this poor state of things. It remains to be seen whether it would, but early indicators are not encouraging. Things are looking up in other areas, though. Power cuts are no longer the norm. And the authorities are acting proactively to ensure there is a low probability of running out of gas for generating power in the future, one of the reasons why electricity was short in the past. The government signed a 12-year gas supply deal with Russia’s Gazprom in September, after a 15-year one with Equatorial Guinea just a month before. That is, despite the likelihood that Ghana may become self-sufficient in gas by end-2018, when the 180 million cubic feet per day Sankofa gas field is expected to come onstream.

Capitalize on slowing inflation
Annual consumer inflation may very well be in the high single-digits from early 2018. My forecasts put the headline at about 8 percent then. But it would likely be in the 10 percent range before end-2017, from 12.3 percent in August. So at 21 percent going into the September meeting, the central bank’s policy rate is way too high relative to the inflation outlook. That is, despite having cut rates by 450 basis points already this year. Since there is no doubt the BoG would ease rates even further, the advocacy here is that it should do so faster. The economy needs the lift.

Also published in my Premium Times Nigeria column. See link viz. https://opinion.premiumtimesng.com/2017/09/25/ghana-the-need-to-ease-monetary-rates-faster-by-rafiq-raji/

What about the 2017 BRICS summit?

By Rafiq Raji, PhD

The BRICS group of five emerging economies (Brazil, Russia, India, China and South Africa) held its 9th summit in the Chinese city of Xiamen this year (3-5 September). Originally just an idea by former Goldman Sachs (an investment bank) executive Jim O’Neill in a 2001 publication dubbed “Building Better Global Economic BRICs”, BRICS countries today constitute almost a quarter of global output. They have not proved to be as inspiring since those heady days, though. Since its first substantive summit in June 2009, only China (GDP: US$11.2 trillion) and India (GDP: US$2.3 trillion) have proved to be consistent good performers, albeit China has since 2015 adjusted to a new normal of below 7 percent growth. India is forecast by the IMF to continue powering on above 7 percent, though; over the next two years, at least, after a 7.1 percent headline in 2016. But that is where the good story ends. Brazil (GDP: $1.8 trillion) only emerged from a 2-year recession (the longest in its history) in the first quarter of 2017. And South Africa (GDP: $0.3 trillion) exited a relatively short-lived one in the quarter afterwards.

Mostly about China
The 2017 meeting was somewhat overshadowed by coincidental negative global geopolitical happenings; top among them being the firing in late August 2017 of an intercontinental ballistic missile (ICBM) over Japan by the communist North Korean regime of Kim Jong-un. China, which consititutes more than 60 percent of BRICS output, was called on by world powers to reign in the North Korean regime, which depends a great deal on it for sustenance. Naturally, the key headline from the final communique was related to the crisis. In any case, BRICS has become a veritable platform for China to project power and influence, as it seeks to have more say in international affairs. (As the second largest economy in the world, China would like the IMF to be more representative of the new global economic order, for instance.) And judging from the paltry US$80 million funding commitment ($76 million for an economic and technological cooperation plan and $4 million for projects by the group’s development bank) China made at this most recent BRICS summit, the group probably serves no greater purpose than that; especially when you consider its US$124 billion funding commitment in May 2017 to its ambitious Belt and Road initiative or so-called new Silk Road plan. (It did pledge $500 million for a South-South cooperation fund, though.) As a counterweight to recent American insularity, China used the occasion to once again make the case for globalisation and climate change; two major global issues the Americans have been reluctant to show leadership on under its current president, Donald Trump. Specifically, Chinese president Xi Jinping posited the group “should push for an open world economy, promote trade liberalization and facilitation, jointly create a new global value chain, and realize a global economic rebalancing”. 

BRICS plus
The 2017 summit had one major distinction though. It was its largest gathering yet, with non-BRICS countries like Guinea, Mexico, Egypt, Thailand, and Tajikistan in attendance as observers. Their presence was informed by a so-called “BRICS-plus” initiative proposed by China, which could see the current 5-member group include more countries, although this was not formalized at the summit. Of course, it is not too difficult to see why Mexico might be interested in more global outreach, as it faces an imminent dissolution of the North American Free Trade Agreement (NAFTA), which if successful would see it lose lucrative market access to America. Considering it is a major campaign promise of President Trump, it is probably only a matter of time before this happens. Mr Trump desires that America get more from NAFTA, which he believes is currently lopsided in favour of neighbours like Mexico. In any case, China indicated it was interested in entering into a free trade agreement with Mexico; in line with a trend where it now increasingly fills the gap left behind by a less-ambitious America. One of the observer African countries, Guinea, got something as well: it secured a US$20 billion loan over about a 20-year period from China in exchange for mining concessions on its bauxite deposits. Structurally, it did not seem like a bad deal, as revenues from projects the loan would fund would be used to service it. They include a planned alumina refinery and two bauxite mine projects. Roads, a power transmission line and a university are other projects earmarked. Still, considering how shrewd the Chinese are, it is not likely the Guineans got the better side of the deal; especially as the Chinese would get to keep any potential gains down the line, often beyond that which could be reasonably valued at the early stages. Like its other international trade and foreign policy initiatives, the ulimate beneficiary of BRICS is China itself.

Also published in my Premium Times Nigeria column. See link viz. http://opinion.premiumtimesng.com/2017/09/08/what-about-the-2017-brics-summit-by-rafiq-raji/

G20 v Africa: Still same old tokenism

By Rafiq Raji, PhD

Evidence that America’s stature has diminished under the leadership of the erratic incumbent, Donald Trump, was writ large at this year’s heads of state meeting of the group of 20 major world economies (G20) in Hamburg, Germany. (Together, they constitute more than 80 percent of global economic output.) Mr Trump was a sorry sight to say the least, isolated consipicously from other leaders, with less seeming ones like Russia’s for instance, far more at ease. Even as world leaders are beginning to learn how to work around or without Mr Trump, America’s divergence from the other 19 members (and indeed the world) on hard-fought global consensus on trade and climate change is going to cost everyone. In contrast, Mr Trump very happily obliged four African countries US$639 million in food and other humanitarian assistance. Almost 20 percent of the funds would go to Nigeria to deal with the desperate situation in the northeast. When summed with earlier declared aid, the total American pledged assistance for Africa in the 2017 fiscal year comes to about US$1.8 billion. When proposed Trump aid cuts to United Nations’ African peacekeeping operations and the United Nations Population Fund (UNPF), a major funder of crucial family planning programmes on the continent, and the closure of some African-focused government agencies (like the US African Development Foundation), and so on, are considered, the announced American aid at the G20 summit rings hollow somewhat. The South African president, Jacob Zuma, whose country is the only African member of the G20, shed more light on the African gains from the summit. They were mostly related to aiding youth and women development. One initiative aims to create 1.1 million new jobs by 2022, with a skills programme for more than 5 million youths over the period. Another would finance women entrepreneurs and boost the technological savvy of girls. With one-third of Africa’s 420 million youths unemployed and another third in vulnerable employment, these initiatives would barely scratch the surface of the problem. Agriculture and labour-intensive manufacturing remain the most viable way to create jobs. Africa’s richest man, Aliko Dangote, already recognises the urgency and opportunity, and has announced plans to invest US$4.6 billion in the Nigerian Agricultural setor. The level of his commitment is a good way to assess the relative pittance of such nonsensical assistance like the announced American one. Quite frankly, until the world’s advanced economies genuinely desire that African countries succeed, their initiatives would continue to fall short.

Self-interested intentions
Still, much credit must be given to the German presidency of the G20 this year, which tried against daunting odds to focus on African issues. Considering myriad tensions among members over more pressing issues, German Chancellor Angela Merkel must be applauded that Africa managed to feature as prominently as it did. Unfortunately, it did not seem like her colleagues, Mr Trump for instance, shared her vision that what Africa needs is not more aid but partnerships. Of course, the symbolism of German city, Berlin, being were the fabled “scramble for Africa” was decided adds a tinge of irony to her advocacy. With illegal African immigration to Europe continuing unabated, there is a recognition that should Europe and other developed economies not do their utmost to make living in Africa more palatable for the continent’s youths, there is not much that can be done to stem the tide. It makes sense then that the focus of the G20 German presidency’s African initiatives were on youth and women. Simpler but more far-reaching moves could have been made, however. The advocacy made by Nigeria’s acting president, Yemi Osinbajo, ahead of the summit, did not receive the much deserved attention, for instance. Prof Osinbajo thought to reiterate how often these summits end with nice pledges for African countries but hardly translate into concrete action. Aptly titled “It’s time to move beyond pledges to back Africa’s future”, Prof Osinbajo was primarily interested in what the G20 would do to ensure information about beneficial owners of secretive companies and trusts used to hide illicit wealth is made public. Corruption investigations by African governments on the trail of treasury looters who have stashed their ill-gotten wealth in Europe and elsewhere would continue to prove difficult otherwise. Of course, it is probably foolhardy to expect these advanced economies would simply block at least US$50 billion in financial inflows, though illicit, from African countries. Fortunately, there is much more African countries can do to recover the significant portion of stolen public funds within their borders.

Holier than thou
In the Nigerian case, for instance, the authorities have recorded greater success in recovering looted funds locally. A whistle-blowing policy, increasinlgy a double-edged sword, also proved to be helpful initially. With whistleblowers now realising that the government’s protective measures for them underwhelm in the face of greater resources in the hands of beneficiaries of corruption, the initial momentum has begun to slow somewhat. If Nigeria, which is in dire need of funds for its ambitious budget this year and later on, hopes to secure greater recoveries in the quickest time and lowest cost possible, there needs to be a wiser approach. Just this week, for instance, finance minister Kemi Adeosun announced the country could not borrow any further this year, asserting that needed funds for the 2017 budget would have to be sourced internally. The recent tax amnesty executive order for those who either are currently not within the tax net or have underreported their assets hitherto, which the government hopes would bring at least US$1 billion in additional revenue, is a little step in this direction. It is highly unlikely, however, that treasury looters that have thus far managed to escape the long hands of the law, would be willing to take the risk of disclosing their ill-gotten wealth. The only way this set of thieves would be willing to confess their sins is if they are assured of amnesty backed by law. So those who have been railing against the proposed economic amnesty bill in the Nigerian lower legislature should think again. Most are hypocrites, anyway, barely cringing when similar initiatives were proposed for people who committed murders and destroyed crucial infrastructure because it bordered on their personal security. If Truth and Reconciliation commissions can be instituted to grant amnesty to people who committed genocide in exchange for their confessions, what is the difficulty in an arrangement that allows us recover our stolen wealth from these shameless thieves in exchange for amnesty from prosecution. If it is made time-bound, and the tax on the declared stolen wealth set very high, 90 percent, say, would it be so bad an outcome? To be effective though, the law should be in tandem with blocking the loopholes that allowed the pilferage to occur in the first place. During the Goodluck Jonathan presidency, central bank governor Sanusi Lamido Sanusi claimed at least US$20 billion had been stolen, a move that cost him his job. Now Emir of Kano, Muhammad Sanusi II has been vindicated. Of course, that was just the hole he could see. Much more was pilfered. But tell me, how much of that has been or would ever be recovered? About half thus far; US$9.1 billion in assets and funds. The United Nations Office on Drugs and Crime (UNODC) estimates Nigeria’s stolen wealth almost forty years since independence to 1999, when the country embarked on its most recent democratic experiment, at about US$600 billion. Another USD$125 billion is believed to have been embezzled since 1999. The sum, US$725 billion, is almost twice of the size of Nigeria’s economy in 2016 of about US$406 billion. There is no way a punitive approach would succeed in recovering even a quarter of that. Unless we start taking pragmatic approaches to solving our problems, we will continue to flounder.

Also published in my Premium Times Nigeria column (13 July 2017). See link viz. http://opinion.premiumtimesng.com/2017/07/13/g20-vs-africa-still-same-old-tokenism-by-rafiq-raji/

Can Africa win Trump over?

By Rafiq Raji, PhD

In mid-May, at the Africa Finance Corporation’s 10th year anniversary infrastructure summit (“AFC Live 2017”) held in Abuja, I asked Jay Ireland, the president and chief executive of GE Africa – the subsidiary of the American industrial giant on the continent – about his thoughts on whether Donald Trump, the American president, would be good or bad for Africa. Specifically, I wanted to know if President Trump would be worth the trouble of winning over. As Mr Trump does not know much about Africa, if the little mention the continent got during his election campaign is anything to go by, engaging with him early on might spring pleasant surprises, some pundits argue. Despite such assurances, I remained a little sceptical. So the opportunity to ask Mr Ireland, who incidentally is also the chair of former President Barack Obama’s Advisory Council on Doing Business in Africa and co-chair of the US Africa Business Centre, which leads the American business community’s engagement activities on the continent, was huge. In a sign of the times and the peculiar style of the current American president, Mr Ireland demurred, humorously wondering if his answer might not become the “subject of a tweet.” More importantly, he said a strong case was being made to the Trump administration to continue ongoing initiatives. I was particulary interested in the “Power Africa” programme initiated during the Obama administration; especially since even during Mr Obama’s tenure, it was floundering, talk less that of Mr Trump. The African Growth and Opportunity Act (AGOA), is not as vulnerable to a Trump rethink, albeit the administration could still exercise certain prerogatives over the choice of beneficiary countries and so on. My interpretation of Mr Ireland’s comments are as follows: Should Africa indeed not be a priority for Mr Trump, ongoing African initiatives may simply continue under the aegis of able and experienced technocrats at the American State department. And in the event Mr Trump suddenly develops a keen interest on African issues, proactive engagement with the administration like his and the business people he represents may be hugely differential. It has also been argued that African heads of state should do likewise.

Focus on first-order issues
In light of the recent exit from the Paris climate accord by Mr Trump, however, some are now beginning to think whether there is a need to even try. I would not be too quick to give up. True, with African countries already beginning to see the negative effects of climate change via droughts and so on, the recent American action is a setback. And of course, African countries initially had their own reservations about the accord. Not a few wondered why they should have to be environment-friendly at the expense of their development; especially as currently developed countries were not similarly cautious. But with research showing a nexus between climate change and increasing incidents of conflict in a number of African countries, there is a growing consensus about the need to be more caring of the Earth we live in. Still, to do this, African countries would require financial and technological support. To this end, the Paris agreement makes substantial provisions. With the American exit, however, also goes its financial commitments. It is also evidence that a Trump presidency would (at least for now) have second-order negative effects for Africa when the issues relate to broader international and multilateral arrangements that Mr Trump is averse to. So it is on the more specific African initiatives that African leaders should hope to influence him on.

Show respect
At the recent G7 summit in Italy, it was all too clear Mr Trump was not enjoying himself. He was particularly irritated by Emmanuel Macron’s (the French president) “macho-diplomacy”: Mr Macron’s overly firm and lingering handshake with Mr Trump at their very first meeting since the former’s inauguration was well-reported. As if determined to rattle the American president or put him to size, Mr Macron also made sure to refer to the incident afterwards as deliberate. That and another, where Mr Macron seem to be moving towards Mr Trump to shake hands, as the G7 leaders and invited guests did their traditional group-walk in front of the press, but at almost the last minute swerved to shake that of Angela Merkel, the German chancellor, must have been a little unnerving for a man known for his fragile ego. Thus, it is very likely that unpleasant experience was at least a secondary motivation for his action on the Paris accord. In his speech announcing the decision, Mr Trump was almost certainly taking aim at Mr Macron when he said: “I was elected to represent the citizens of Pittsburgh, not Paris.” (The Washington Post did a very insightful article on the dynamics leading to Mr Trump’s decision.) At the G7 summit it turns out, one of few instances where Mr Trump seemed to be enjoying himself was when he ran into some of the African delegates: Yemi Osinbajo (Nigeria), Alpha Conde (Guinea), Uhuru Kenyatta (Kenya), Hailemariam Desalegn (Ethiopia) and Akinwumi Adesina (African Development Bank). With deft handling, Mr Trump could become an ally.

Also published in my BusinessDay Nigeria newspaper column (Tuesdays). See link viz. http://www.businessdayonline.com/can-africa-win-trump/

Doing Business: Can Nigeria replicate the Singapore model like Mauritius did?

By Rafiq Raji, PhD

It is undeniable that there is a correlation between a country’s business environment, foreign direct investment inflows and international trade performance. Countries that make setting up businesses easy, allow clearance of goods at ports with little hassle, grant entry and exit visas to investors and visitors alike in quick time, enable the registration of property with little trouble, provide reliable electricity, and make documentation like construction permits easy to acquire, attract more foreign direct investment (FDI). [1] The easier it is to do these things, the more likely cross-border and broader international trade would flourish.[2] These benefits are what motivate countries to try to improve their business environments, more so now that capital is increasingly choosy and circumspect.

Country GDP per capita(US$) (2016) (PPP) Overall DB rank (over 190) Trading across borders (over 190)
Singapore 87,855 2 41
Mauritius 20,422 49 4
Rwanda 1,977 56 6
Botswana 17,042 71 3
South Africa 13,225 74 25
Kenya 3,361 92 9
Seychelles 27,602 93 5
Zambia 3,880 98 31
Lesotho 3,601 100 2
Namibia 11,290 108 17
Ghana 4,412 108 29
Nigeria 5,942 169 181

Source: IMF, Doing Business 2017: Equal Opportunity for All (World Bank, Oct 2016) [3]

Singapore as role model
Singapore is the quintessential example. In the World Bank Ease of Doing Business (DB) 2017 rankings, Singapore is second out of 190 countries ranked globally, having topped the rankings at least nine times since they began in 2004.[4] With a GDP per capita on purchasing power parity (PPP) basis of US$87,855 (2016), it is one of the wealthiest countries in the world. More than three decades earlier, its GDP per capita of about US$8,852, was just one-tenth of its current level. Between 1980-2016, the Singaporean economy grew twenty-five times over from US$12 billion to US$297 billion. Its remarkable success is testimony to the heights any country can reach on the back of sustained reforms and reinvention. In Singapore, contracts matter and are readily enforced, the resolution of insolvencies are not tedious, there is little or no red tape in conducting tax affairs and cross-border trade thrives consequently. In spite of the second place ranking referred to above, Singapore is still widely acclaimed as the easiest place in the World to do business in.[5]

One aspect of doing business in foreign countries that investors dread, is that of dispute resolution. Court processes can be unnecessarily long and slow in most jurisdictions. Singapore overcame this constraint by automating the process, with almost all litigation activities (e.g., submission of claims, payment of court fees, serving of initial summons, etc.), outside of those requiring the physical presence of the litigants or their lawyers, doable online.

Even as some aspects of the Singaporean model are clearly replicable, attempts at copying it often falter when some of the necessary conditions that enabled the Southeast Asian nation to succeed, are missing. “Remaking is essential”: A country must be willing to reinvent itself when the variables change. [6] So just because a model proves successful over a certain period, does not mean it would be a good fit when the times change, as they always do. “Collective response” and “social consensus” also matter a great deal. [7] A determined leadership in the absence of an equally enthused followership may still flounder. Singapore has the unique distinction of having both. Still, there are probably just two essential ingredients for success. First, there must be the political will for reforms.[8] Second, and probably most important of all, the political leadership must be in a secure position and endure long enough for what are sometimes painful reforms, to translate into concrete progress.[9] The two identified prerequisites go together. Otherwise, longstanding African regimes could easily have been similarly transforming. Unsurprisingly, with political will lacking, most are not. There are a few exceptions, however. That is, cases where there have been both the political will for reforms and stable government to see them through. Successes recorded by Mauritius, Botswana and Rwanda, as the DB rankings show, offer a ray of hope for the continent. In line with the Singaporean evolution, their experience also adds to evidence about the identified necessary ingredients for success. In other words, they offer a template on how to assess the likelihood of success of many other countries, African ones especially, who now seek to be similarly attractive to foreign investors.

The case of Mauritius
The one African country that has consistently topped the rankings on the continent, and sometimes dubbed the “Singapore of Africa” – Rwanda also shares the epithet these days – is Mauritius (ranked 49 in the latest DB rankings).[10] [11] [12] Although the Mauritian economy (GDP of US$12 billion) is relatively small when compared with continental giants like South Africa (US$294 billion) and Nigeria (US$406 billion), it is one of the wealthiest. Its remarkable evolution especially suggests the Singapore model can be successfully replicated by African countries. Like Singapore, Mauritius ranks high for good governance and its politics is quite stable.[13] Mauritius’ strong institutions have also been widely acknowledged to be a key success factor.[14] Its cosmopolitanism, similar to that also evidenced in city and coastal states like Singapore, together with similarly close ties to China and India, were also crucial to the development of its manufacturing sector.[15] There is also a consensus in the literature about the huge role its trade policies played in its rapid development.[16] Preferential trade access agreements with key export markets and investment incentives via export processing zones (EPZs), enabled it to develop an apparel and textile manufacturing base, for instance. There is also now a vibrant light manufacturing sector. In addition, tax incentives have enabled Mauritius to become a preferred destination for offshore financial services, and was hitherto a major channel for Indian capital flows, a feat it competes with Singapore to achieve. Unsurprisingly, Singapore and Mauritius already explore palpable synergies between them, signing an air corridor agreement in October 2015, for instance.[17]

Mauritius especially highlights its DB ranking when pitching to foreign investors, and is acknowledged to be for Africa what Singapore is to Southeast Asia. However, unlike Singapore, it has not been similarly successful in getting foreign businesses that register within its jurisdiction, to actually situate the bulk of their operations within the country. That is why it is widely considered to be mostly a tax haven, a characterisation Mauritian authorities dislike and would like to disabuse. Unsurprisingly, its goods exports trend is not impressive, unlike the Singaporean example. It is noteworthy though that a bulk of its goods exports emanate from its EPZs. Lately, Mauritius has been forced to address these deficiencies, as developed economies crack down on tax havens and avoidance schemes and hitherto lucrative tax arrangements are renegotiated. Mauritius, which does not charge a capital gains tax, used to be the preferred destination for channelling capital to India, where capital gains tax can be as high as 40 percent and accounted for a quarter of its foreign capital inflows.[18] This may change from April 2017, when India started charging taxes on investments from Mauritius, after the more than 3-decade tax treaty between the two countries was amended in May 2016.[19] Consequently, Mauritius has ramped up its African focus, with more than half of foreign companies registered by it in the past few years, aiming to do business on the continent.

Corruption and poor governance may weigh on Nigerian reforms
Other African countries have been trying to improve their business environments.[20] Even so, most African countries remain in the lower rungs of the DB rankings, with South Africa and Kenya respectively at 74 and 92 out of 190 in the most recent one. Still, more than a quarter of ease of doing business reforms in 2015-16 were by Sub-Saharan African (SSA) countries, with Kenya one of the top 10 improvers globally. [21] Others seek to join the list of top improvers. Most recently, Nigeria (DB rank: 169) has made a splash about its DB reforms, announcing a 60-day action plan in late February 2017.[22] Nigeria’s abysmally poor non-oil goods exports is another motivation for the authorities’ forced reformist stance, after low crude oil prices over the past two years starved the government of revenue. Crude oil exports constituted more than 90 percent of total goods exports between 2009-15. That is, even as total goods exports were less than 20 percent of GDP on average. Unfortunately, attempts at using EPZs to spur export of manufactures have been slow-moving, with the most promising one (Lekki Free Trade Zone) still largely at development stage.

Fundamentally, the recently proposed DB reforms are aimed at increasing international trade and FDI. This is what motivates the three broad areas that Nigerian authorities have identified for reform: entry and exit of goods, entry and exit of people and government transparency and procurement. Agencies at the ports are to be reduced to six, from almost a dozen. Visitors to the country would be able to get visas on arrival, and those that apply at the country’s embassies, would hopefully get theirs within 2 days.

Incidentally, attempts were made in the past to sanitize the maritime ports.[23] That the bottlenecks remain point to the intense pushback reformers tend to face. Corruption is a principal motivation and is why Nigerian ports are some of the most expensive to clear goods at.[24] A report commissioned by the ports authority in October 2016, found that Nigerian authorities lose about N1 trillion annually to corruption at the ports. [25] Under new leadership, the ports authority has embarked on an anti-corruption war. Expectedly, it has come under attack, with death threats and mudslinging in tow.[26]

To demonstrate progress, Nigerian authorities announced in April 2017 that the number of days for registering a business had been reduced to two days from at least ten days, as part of reforms to ease doing business in the country.[27] Ordinarily, the activity takes longer than the statutory 2 working weeks hitherto. With that now reduced to two days, it could be reasonably expected that new business registration would be accomplished in a week, say. How was this achieved? Automation. Similar to how Singapore (and many other countries that copied its model since) was able to get rid of human-related bottlenecks to the ease of doing business, some of the tortuous tasks would now be done electronically. For instance, a lawyer would no longer be required to prepare registration documents, as some of the tasks they charge for could easily be done online by the prospective business owner. Also, such arduous tasks, in the Nigerian context at least, like registering with tax authorities, have been integrated into the government’s company registration portal. Additionally, lawyers at the business registry can now certify incorporation forms and other statutory compliance declarations for a token fee, tasks previously done by lawyers hired by the prospective business owner.

Considering how extraordinarily frustrating the Nigerian legal system is, the knotty issue of dispute resolution may be a hard nut to crack. Setting up specialist courts like Singapore did has not been similarly effective because the judiciary is as yet not equipped for the automation element. Judges still write their judgements by long-hand, there are no audio recording facilities in courts and virtually all documentation is in hard copy form. These deficiencies are why even with specialist courts like the National Industrial Court, Investments and Securities Tribunal and so on, cases can sometimes take years before resolution. And even when successful after years of litigation, red tape can be craftily deployed by a well-connected local partner or disputant to make the whole exercise seem like a total waste of time. A much broader reform of the Nigerian judiciary would have to presage any potential measure directed specifically at the ease of doing business. Understandably, the proposed DB reforms focus on those issues that can be easily fixed. But considering how important dispute resolution is to increasing investor confidence – as the Singaporean and Mauritian examples show – lack of progress in this regard only buttress the poor governance characteristic of the Nigerian business environment. And as earlier highlighted, entrenched interests, corruption and inter-agency rivalry at the ports, mean multiple inspections and continued unwholesome practices, which increase the lead time of goods clearance, would probably endure and continue to stymie the country’s trade performance. Patronage networks around doing business in Nigeria, beneficiaries of which include politicians and their lackeys in every facet of government, would be difficult to dismantle as well.

Conclusion
Nonetheless, even the slightest attempt at improving the Nigerian business environment should be applauded. Still, it would take at least a year of monitoring to determine how much difference the announced reform moves would make and if that would eventually be reflected in the Doing Businessrankings. Besides, there are other more entrenched problems that would require time and determination to fix. With Nigerian politics still relatively fragile, and even simple activities like passing the budget enmeshed in much wrangling, the risk remains that these new reforms may suffer the fate of earlier botched ones. That said, the legislature has expressed support for the efforts of the executive and aims to pass relevant legislation to ensure the DB reforms become codified in law and hopefully survive future administrations. As at late April 2017, two of the identified fifteen DB legislative bills had already been passed.

Despite recent crackdowns on treasury looters and other corrupt persons, corruption would be harder to tackle, however. There is the impression that should there be a change of government after the 2019 elections, the current anti-corruption momentum is likely to slow. Besides, a judiciary not in trend with the times would likely continue to slow the wheel of justice. And defense lawyers have proved to be quite deft at beating the system: successful prosecutions of high-profile corruption cases are rare. Thus, if one were to use the Singaporean and Mauritian success stories as templates, scepticism about the potential success of current reform proposals would be somewhat justified. Still, even the slightest reduction in red tape would bring tremendous relief to those foreign investors who are already decided on doing business in the country. Besides, foreign companies who have anyway managed to make hay despite the many constraints, could do with the efficiencies that some of the reforms would potentially bring about; that is, despite the risk of holdups down the line. But with a still fragile political fabric – evidenced by much infighting within even the ruling political party, which is an agglomeration of strange bedfellows of sorts – endemic corruption and poor governance, the reforms may yet flounder. There needs to be a “collective response” and “social consensus” around the reforms for them to succeed.

Dr. Rafiq Raji wrote this article for the NTU-SBF Centre for African Studies at the Nanyang Business School, Singapore, where he is an adjunct researcher. See link viz. https://www.ntusbfcas.com/african-business-insights/content/doing-business-can-nigeria-replicate-the-singapore-model-like-mauritius-did

Also published in my BusinessDay Nigeria newspaper column (Tuesdays). See link viz. http://www.businessdayonline.com/business-can-nigeria-replicate-singapore-model-like-mauritius/

Time for Hailemariam to lead

By Rafiq Raji, PhD

With an economy set to grow by more than 7 percent over the next few years – after about 10 percent on average over the past five, Ethiopia is a bright spot on a continent beset by stagnation as commodity prices remain tepid. Its growing success in replicating China’s manufacture-for-export model is a source of hope for peers and partners who desire an Africa that adds more value to its resources. Cheap labour, ample power generation capacity in view, and generous investment incentives are major attractions. Still, much of what Ethiopia has been able to achieve can be traced to its stable polity, held so by an autocratic leadership that has little tolerance for the slightest dissent. Erstwhile forceful leader, Meles Zenawi, was able to hold things together, because of his credentials. He led the rebellion that freed his countrymen from the much loathed Derg military regime. Under a more genteel leader, Hailemariam Desalegn, that model has become increasingly tested. Most recently, albeit intermittently hitherto, an uprising by the Oromo and Amhara tribes – about two-thirds of the population – over land and basic human rights threatens to unravel the country’s economic miracle. It need not be so. The most recent casaulties of the face-off with authorities are more than 50, adding to about 400 believed to have been killed since 2015 under similar circumstances. About 40,000 jobs are now at risk, after protesters attacked foreign-owned establishments. For Ethiopia’s economic success to continue, the politics can no longer be ignored. Room has to be made for the quite diverse polity. Mr Hailemariam has a chance to do this. But to succeed, he would need to be his own man.

Address the concerns
The Oromo and Amhara peoples feel marginalised by the ruling minority Tigray tribe, about 7 percent of the population, which dominates the government and military. The authorities have met their agitations with brute force. This approach worked in the past, on the surface at least. Not this time: this recent unrest was triggered precisely because of the authorities’ heavyhandedness to what are widely believed to be legitimate concerns. The troubles this time could be potentially more damaging than past ones: foreign investors are being targeted. Lingering terrorist threats from neighbours are daunting enough; add unrest by a majority of the population, and you have a combustible mix. And the protests are growing nationwide; these are not isolated and distant pockets of dissatisfaction. It is widespread. And they could spread even more. Solution then? Address the concerns. The Oromo want more self-determination. The Amhara likewise. Authorities might be quick to point out that the country operates a republic of semi-independent states, with enormous leeway guaranteed them in the Constitution, including the right to secede. That is not the case in reality. There needs to be more inclusion. A devolution of actual powers to the regions might be a good start.

Allow more room for dissent and political expression
It was always going to be a huge task for Mr Hailemariam to fill the shoes of his larger than life predecessor – Mr Zenawi had a force of personality that is palpably missing in his successor. Already perceived to be weak, he likely fears those views could become entrenched if the current unrest is treated with kid gloves. Still, Mr Hailemariam has an opportunity here. It is in time of crisis that leaders often emerge; tested at least, in a manner that cements their authority to the point where they are able to make bolder moves. The longer the Oromo and Amhara protests and deaths continue at the hands of the security forces, the more hardened the protesters would get. And now they may have caught on to the one thing that would get the attention of the ruling elite: targeting foreign investors. If there is anything that has made the autocratic leadership tolerable, it is the veneer of stability it has engendered, the type investors crave. They have shown that confidence with their pockets, pouring money into manufacturing and agriculture. Ethiopia has the only other light railway mass transit system in sub-Saharan Africa outside of South Africa. And only just recently, it opened a Chinese-built railway to Djibouti, whose seaport it relies on. Its development-before-democracy paradigm faces its toughest test yet. Just as foreign investment gains have come about by the authorities’ strong grip, their reluctance to adopt a more democratic approach may be what unravels them. And frankly, a desire for equity by a genuinely aggrieved people is not farfetched. Land sold to foreign investors should be well compensated for. Locals should be given greater consideration in employment. And there should be a preference for dialogue over coercion. The Oromo and Amhara are too numerous and determined to be put to rest by force. The authorities must engage them and find a solution that is acceptable within the bounds of reason.

Tough love by powers could help
Democratic reforms would be easier under Mr Hailemariam. But to fend off likely resistance from the Tigray elite that dominates the ruling Ethiopian People’s Revolutionary Democratic Front (EPRDF), his hand would need to be strengthened. He is not Tigray. Neither is he an Ethiopian orthodox christian. World powers have leverage: about $3 billion in aid. The United States has already raised significant concerns. Together with others – German chancellor Angela Merkel visits this week, they should engage the leadership, making the point that the protests provide a unique opportunity to finally embark on much needed democratic reforms. The Oromo and Amhara are likely to be less agitated if they believe they are able to participate in the democratic process. Not the charade midwifed by the authorities hitherto: how is it that not a single seat in parliament is occupied by an opposition party? Ms Merkel has refused an invitation to address the ‘lawmakers.’ She plans to speak to opposition parties though. Fact is, it is when people feel stifled and find no means to exert their opinions that they resort to insurrection. True, the minority Tigray worry if they did that, they could be overwhelmed. That is often not the case. And even so, they might have little choice now that more than half of the population has had enough. And in this age of instant news and social media, it would be foolhardy for the authorities to think that they could quell yet again another uprising with force. A state of emergency has been declared. Sadly, the authorities may yet learn a lesson.

Also published in my BusinessDay Nigeria newspaper back-page column (Tuesdays). See link viz. http://www.businessdayonline.com/time-for-hailemariam-to-lead/

What is Japan’s African game?

By Rafiq Raji, PhD

The 6th Tokyo International Conference on African Development Summit (TICADVI), held on 27-28 August in Nairobi, Kenya, has come and gone. But what did it achieve? Some US$30 billion in aid and investments over the next three years were promised, half of what China pledged late last year at its similarly themed get-together, the Forum on China-Africa Cooperation (FOCAC); also its sixth meeting then. Some 73 memoranda of understanding were also signed, a lot of which were related to infrastructure, power generation especially. Others were in the health, education and expectedly, oil and gas sectors. A friend who attended the summit was particularly excited about some of the products on display at the exhibition along the sidelines of the event, like pay-as-you-go solar power, supplements for maize porridge, and so on.

Like China, Japan is involved in quite a few infrastructure projects in various African countries, albeit to a lesser degree. And Japanese companies already do quite a great deal of business in most of these. Chinese companies increasingly so as well. In sum though, China’s engagement with the continent is more intense and widespread. The Japanese make up for this in other ways. Japanese brands evoke feelings of quality, brilliance and efficiency. From electronics to cars, they are quite ubiquitous across the continent. Despite China’s growing closeness, similar sentiments are barely associated with its brands, if at all. Chinese goods are still considered inferior. Surprisingly, their cheapness barely appeals commensurately. Even so, China’s experience and relatively ample resources may be more germane to African needs. No matter. Both are willing. Sand in the wheels? Both are staunch rivals, albeit they feign some level of maturity in front of their African ‘friends’ – an official Chinese delegation attended TICADVI.

They all want the same thing
When there are numerous suitors for a potential bride, it is often ironic that blessings do not always follow. The one being sought after might overestimate her value, dither, or hope for better opportunities that may never come. Africa is one of many frontiers of interest to these world powers. So for Japan and China, longstanding rivals, whose volatile relationship is writ large by a territorial dispute over eight islands in the East China Sea, Africa provides a vast field for them to spar. Even so, they both really want the same thing: influence. Like China, Japan is also interested in the continent’s mineral resources. Resource-poor Japan seeks fuel for its energy needs, as its nuclear-dominated system have been mostly shut down since the 2011 Fukushima mishap. Both are also counting on African countries to pursue varied agendas at the United Nations and other multilateral institutions. Like the Europeans and Americans before them, Japan and China are also building military bases on the continent. Simply put, they are pursuing their own interests. Knowing this could be a blessing for African countries, whose negotiating positions are enhanced as a result. The temptation to pitch one against the other should be resisted, however. Instead, African countries should articulate what their development needs are and then go with the partner that best ensures their fulfilment. Japan is not offering as much money as China is. But it has one advantage over the latter. It is more technologically advanced. Its projects are executed with the highest standards and are delivered on time. And they last. China, on the other hand, knows only too well how steep the road to development can be. It is likely a better teacher on how to traverse that road than Japan could ever be at the moment. There need not be a dilemma in any case. Both can help.

Accept only the help that liberates you
As the Japanese prime minister, Shinzo Abe, was engaged in his charm offensive – the TICAD conference was being held on African soil for the first time – Chinese officials were quick to deride his efforts. It was almost the same way the Americans were all too quick to point out how the Chinese then newfound interest in Africa was going to be similarly or more exploitative. Truth is, these supposed development partners go into these relationships often because they already see more advantages for themselves. Or at least, they see the costs and benefits as evenly balanced – not in the African case: whether the partner is China, Japan, America or Europe, the advantages are tilted towards the other side. And the toast is always the same: we want to help. That is all very well. What African countries need the most, in addition to infrastructure, is technology and skills transfer. In doing this though, the situation can no longer be as it is currently, whereby these so-called partners set up businesses on the continent, bring their own staff, integrate little and barely mask their disdain. The scorecards cannot continue to be about how many billions of dollars our partners’ supposed benevolence allowed for each time. Thankfully, more energy at these summits is now being devoted towards changing this lopsided paradigm.

Also published in my BusinessDay Nigeria newspaper back-page column (Tuesdays). See link viz. http://www.businessdayonline.com/en/what-is-japans-african-game/