What would Africa lose setting up AU Bank? Nothing but debt
Monday July 15 2024
Today, Africa’s external debt is about $1.2 trillion, with half the countries at risk of debt distress. It is hard to find a country that looks like it absorbed the billions upon billions of dollars it purportedly borrowed. ILLUSTRATION | JOSEPH NYAGAH | NMG
Have you ever treated a dear one for alcoholism? It need not necessarily be at one of those five-star rehab facilities where medics and psychologists apply the latest scientific findings and inventions to restore the victim to normal conduct. But some other effective rural community anti-booze therapies can be tough.
One of them is oral administration of bladder contents from the oldest woman on the village. I think, though, that this works through humiliation after the drunk sobers up and learns why the whole village is laughing.
But imagine the pain and disappointment when a loved one you thought had kicked the habit after lengthy scientific or local humiliating therapy, one day returns home zig-zagging all over the way, eyes unfocused, clothes dusty, or even wet, and tongue either tied or uttering obscenities! This is comparable to what happened when some so-called HIPC – Heavily Indebted Poor Countries — were forgiven chunks of their debt but soon became even more indebted than before the write-offs.
Read: BUWEMBO: African country in debt? Tell creditor to talk to AU
Maybe the acronym was jinxed at conception, and they should have called us HEAD – Highly Endangered African Debtors — which would have reminded us to use our heads, rather than “HIPC” which seems to focus on the hips.
This also seems to be the case with African countries that strike oil and get so excited that they go into overdrive spending and stealing — only to end up begging from countries that are not as richly endowed with natural resources.
Today, Africa’s external debt is about $1.2 trillion, with half the countries at risk of debt distress. It is hard to find a country that looks like it absorbed the billions upon billions of dollars it purportedly borrowed.
So, what happened when HIPCs’ debts were forgiven? Generally, there was lack of discipline to adhere to the forgiveness conditions, which included controlling the cost of public administration, the indiscipline which, in past weeks, has come to be known as budgeted corruption.
Both the corrupt and their victims often strangely conspire not to call it what it is — theft. Consequently, excuses have been popularised to account for the growing indebtedness and the latest of these include Covid-19, Climate Change, Ukraine war, Gaza and whatever our lazy brains can concoct.
But was the deepening debt inevitable after forgiveness? Or was it meant to fulfil the Biblical writ that when one demon is cast from a person, it goes and gets reinforced by seven fellow demons to return and find the victim even more open to abuse since the house is empty and clean — like debt-forgiven government treasuries?
The African Union could be the solution to ensure that rehabilitated debt patients don’t relapse.
But while the AU discusses debt and recommends strategies and guidelines, it cannot enforce them, leaving it to the discretion of individual states to be extravagant, to suffer both budgeted or naked theft.
Read: BUWEMBO: Africa can use its idle, arable land for biofuel and save Earth
For the AU to become more effective in guiding and fostering development on the continent, member states need to surrender some economic powers to the group, especially where it helps to reduce grand budgeted criminality. Hiding behind sovereignty to allow the evil designs of looting public resources should cease.
Some countries are closer to re-colonisation than others, but, in the end, none will be safe when their neighbours lose control over resources and institutions.
If African states opt to be “more HEADs than HIPs” they could, for example, agree that all foreign loans be vetted by the AU Commission before individual countries contract them. To this end, decisions over natural resources on the continent should be vested in the AU. This would make any agreement entered into by a singular government over mineral resources without AU’s authority null and void.
Those minerals particularly required in the ongoing energy transition (copper, cobalt, lithium, etc) have been valued by different agencies, and all estimates tend to put Africa’s share of these alone of the global total at least at $1.5 trillion receivable over the next 25 years.
Imagine if the AU Commission took charge of this, to ensure that countries get fair prices but, above all, to process the minerals so that processed products, not raw materials, get exported!
Again, what is to stop the AU from setting up a mechanism to represent all African governments in handling loans? What would Africa lose by setting up the AU Bank? Nothing but chronic debt.