Harry Sterling
National Post
May 15, 2000

The absolute terror engulfing the West African state of Sierra Leone is a grim reminder of the chaos and widespread bloodshed frequently erupting on that violence-plagued continent. It is also a timely reminder that calls for industrialized countries to forgive billions in loans owed by African nations would not necessarily improve the lot of ordinary Africans, many trapped in societies where anarchy, repression and systemic corruption are the norm, not the exception.

While Canada and other countries support efforts to improve Africa’s economic condition, its chronic difficulties do not stem solely from underdevelopment, frequent droughts, scarce resources or other economic shortcomings. Except for a handful of countries, such as South Africa, Botswana and Malawi (recently joined by Nigeria, Mozambique and Senegal), most African nations are run by repressive and dubious military regimes, or corrupt elites. They have so undermined their national institutions that they are little better than Potemkin Villages, barely concealing the social-economic chaos and rot underlying them. This, despite more than US$400-billion in aid and credit pumped into Africa since the 1960s.

The situation has deteriorated so badly that countries such as Canada — plus the World Bank and IMF — now link aid programs to what is euphemistically called “good governance,” an effort to induce otherwise authoritarian regimes to respect democratic norms and basic human rights or lose assistance. (Some critics claim much of such foreign “assistance” ends up paying for foreign aid workers’ salaries or goods purchased from donor states.)

Despite occasionally paying lip service to such demands, African elites keep their countries in a statist stranglehold more comprehensive than those seen during Africa’s colonial subjugation, controlling national economies and treating them as personal fiefdoms. Many of the wealthiest citizens in African countries have enriched themselves not by business but by becoming politicians or members of ruling parties and the military, siphoning off their nation’s resources for themselves.

Africa’s “vampire elite” could do this because after independence in the 1950s and ’60s, most African nations were proclaimed socialist or dirigiste states, with rigid top-down economic control. Most governments severely restricted or undermined authentic entrepreneurship, resulting in ill-conceived national economic planning, sometimes on a grandiose scale incapable of being realistically financed by agricultural-based economies with scant domestic savings and investment. During the Cold War era, only Kenya, Malawi, Senegal, Liberia, Zaire and the Ivory Coast actually welcomed private foreign investment in significant numbers.

But even newly independent nations with reasonably functional institutions, including untainted judicial systems, were quickly hijacked by self-serving groups representing narrow tribal, religious or regional interests, setting the stage for the ethnic violence and civil wars of recent years. Such groups used their unchallenged power to channel resources into their own pockets and their followers’, often flaunting their ill-gotten wealth in the face of their impoverished countrymen. In 1976, the infamous President Bokassa of the Central African Republic spent more than 20% of his nation’s already meagre GNP during a ceremony proclaiming himself “Emperor.”

Leaders such as the late Mobutu Sese Seko of Zaire (now the Democratic Republic of Congo) installed close family and clan members in every key government position, as well as the military. While his country stagnated, Mobutu transferred billions of dollars to European banks. Likewise, Nigeria’s last military strongman, General Sani Abacha, stole more than US$2-billion.

In the 1980s, Zimbabwe’s current president, Robert Mugabe, handed out confiscated white-owned farms to close supporters, properties supposedly intended for landless black farmers. Now he has plunged his nation into near-anarchy by orchestrating the occupation of white-owned farms by so-called war veterans. He allowed other supporters to enrich themselves by exploiting their own positions within state infrastructures, demanding kickbacks. A businessman trying to import machinery or goods would have to bribe customs officials for relevant permits. Then the right people in the central bank or finance ministry would want their cut for authorizing payment in hard currencies. Similarly, General Abacha allowed friends and key individuals to buy foreign currencies at drastically reduced values, selling them on the black market. The head of the Lagos port authority audaciously imposed “overdue” clearance charges in the tens of thousands on diplomatic shipments.

Such pandemic corruption is not unique to Africa. The World Bank recently reported that corruption in the public and private sectors in certain Asian states is “pervasive and deep-rooted, touching even the judiciary and the media.” It estimated such corruption can add 20% to 100% to the cost of goods, with lost government revenue near 50%. The same considerations apply to Africa. The ultimate losers from all this are the long-suffering African people themselves. Due to corruption and concomitant mismanagement, for example, Nigeria’s per-capita income dropped from US$1,200 in 1983 to US$250 by 1995.

But it didn’t have to turn out this way. With the exception of countries lacking adequate water, many African countries are reasonably endowed with natural resources.

Many, like the Congo, possess substantial mineral or energy resources, including strategic minerals such as chromium, cobalt, manganese and titanium. Kenya, Tanzania, Uganda and Malawi have solid agricultural potential. The Sudan, with recent foreign investment, including Canadian, is now exploiting its petroleum resources. Nigeria could increase its own oil revenues dramatically if the new government of President Olesegun Obasanjo clamps down on officials pocketing oil profits. Francophone nations in West Africa have been exporting tropical crops and hardwoods to Europe for more than a century.

African countries could do much more in the agricultural sector. Unlike Canada, with less than 5% of the population in farming, the average in Africa is close to 85%. While much can be done to raise agricultural yields, non-agricultural investments are also needed. However, foreign investors are understandably reluctant to invest in countries that are constantly wracked by tribal or religious bloodletting, as in Burundi, Rwanda, Liberia, Ghana and Sierra Leone. As a result, Africa reportedly attracts only 5% of investment to developing nations.

Unpredictable or totally capricious regulations affecting the activities of foreign firms have been major obstacles to attracting new funds, especially when tax regulations and rules on the repatriation of profits are abruptly altered or abrogated without notice, compounded by constant government interference in the marketplace. Even domestic entrepreneurs are reluctant to invest if they cannot expect tax legislation or normal commercial law to be respected on a predictable basis.

None of this will change until African governments reduce the role of the military, operate transparently, are accountable for their actions to the public and respect the rule of law equally for everybody. The Cold War is over, and outside nations have no excuse for coddling dictators and anti-democratic regimes, key obstacles to progress and prosperity.

Harry Sterling, a former diplomat, is an Ottawa-based commentator. He served twice in Africa.