A Defining Economic Moment for Africa

Louis Egbe Mbua

It seems a hard-pressed exercise, in the current climate of international instability, to present an authoritative report on the consequences of the present global turmoil. The reasons being that they are sporadic, widespread, global and point to a problem nobody appears to have a solution – mindless violence, disorder, religious fanatics based on towering folly, economic and financial meltdown and African Presidents who plan to rule for ever (or live forever dependent upon one’s view on this great misfortune). On the other hand, however these troubles are seen; only a global solution will suffice. There is something fundamentally wrong in this present system of things; and the problem has a cascading effect that originates from the marginalisation of Africa at a great cost to the world.

At this time when the American Superpower status is being boldly challenged on the economic front, it is time to take a closer look on how Africa may emerge from this crisis as a power to be reckoned with.

There has been a number of analysis that mark out a power shift from West to East; to replace the vacuum created by America’s misrule of the world; and that America is on the decline and on her way to an eventual and ignominious collapse. While this may be a possibility -- if we consider the speed of the financial mayhem and destruction of the best and oldest of their financial empires -- it would be disingenuous to posit that power must suddenly pass to China, India, Thailand and South Korea on grounds that these nations have huge monetary reserves.

Recent events have shown that paper reserves can disappear overnight without trace; and that only those who can actually produce quality goods and raw materials and simultaneously pull their resources together as one will survive as a global power.

One of the endemic problems in Africa is leadership; and that the best minds are not applied to the most tasking problems. Leadership in this context is not narrowed to politics. It encompasses entrepreneurs in business, education, industry, commerce, banking, sports, engineering, the Art, Culture and manufacturing.

This has been a problem because Africa has failed to form a united front to fight the ills and adverse consequences of mediocrity: by a lack of a Union Central Bank of Africa. It interesting to note that almost all continents are locked into a monetary and financial institution where they draw all their resources: or have a unionised financial institution from the European Central Bank to the Bank of China; and disputably the American Federal Reserve and the International Monetary fund. As a result, when Africa catches or inherits an economic crisis, there are no unionised indigenous institutions to bail her out since every nation must fend for themselves – everyone for themselves.

In this case, therefore, Africa’s huge economic potential is monumentally diminished because each individual state go cap in hand to their former colonial rulers for loans with dreadful and adverse conditions attached complete with prohibitive interest rates and catastrophic political implications. So, we have a vicious cycle where a potentially powerful continent is economically crippled; thus negating global financial power as a whole by summation.

The result has been that the industrialised nations then drew much of their finance from one source: from the East. Knowing full well that resources are scarce and limited, this financial dependence on the “rich” East and the disregard of the potentially powerful financial giant of Africa causes an asymmetrically bloated economic model and bubble that is always bound to burst with incalculable repercussions.

Thus, it can be surmised quite safely, that the boom and burst global cycles that has tormented international economies were as a result of western economic capitalist models not factoring the African economic variable: this is fundamental to the world as Africa is the mainstay of raw materials for the entire system – communist and capitalist (now potentially dead).

The time for African nation states to merge their economies so that they can draw on their full potential has come. This is a defining moment for the continent to move quickly so as to fill the vacuum left as a result of the sudden and perhaps a permanent deflation of the economic bubble that will go with the collapse of the former powers.