Africans: Think before Joining Bandwagon

Published on 13th September 2005

The Daily Telegraph article on Rock Stars and their lunatic economic ideas has been republished in over 8 languages including Vietnamese! Boasts the closing line on an article Franklin Cudjoe has submitted to the CoolestAfricans Newsletter.

 

Following the link below takes you to the article about rock stars and their economic ideas but I beg to ask a few question on Cudjoes take on rock stars and economics.

 

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2005/04/18/ccpers18.xml&menuId=242&sSheet=/money/2005/04/18/ixcoms.html

 

Firstly Franklin Cudjoe merely pointed out problems that have been in existence in Ghana for a long time and he has proposed no practical solutions to these problems a common practice in Africa.

 

One thing that holds true is that in the face of cheap subsidized imports, the local products will suffer as most people will think in terms of price and availability of the goods rather than quality. This is a problem that is faced by many local producers all across Africa including Kenya where cheap sugar imports led to the collapse of more than one sugar factory and almost led to the collapse of the local sugar industry.

 

The problem is rampant in Africa and one of the points Cudjoe should have made in remedying the problem is that tariffs should be imposed on these imported subsidized goods, and if after these tariffs the imported product is cheaper on the shelf than local products, then purchases can then be driven by choice not by the on the shelf price edge subsidized goods enjoy on the shelf. These tariffs would serve to level the playing field for both locally produced and imported goods on the shelf such that next to each other the products are the same and only the consumer’s choice will drive the purchase. 

 

What Cudjoe has also failed to note is that not all imported goods are of superior quality compared to locally manufactured goods. For example some variations of cheap Pakistani rice found in local Kenyan supermarkets are of lower quality than locally produced rice but on the shelf they have the edge price-wise. African Culture has played a big role in developing this erroneous notion that anything imported or remotely Western will always be of higher quality whilst this scarcely hold true. Most variations of imported sugar, shoes, clothes, rice, and even tomatoes are of lower quality than locally produced counterparts but are cheaper on the shelf. Africa has in fact become a dumping ground of inferior goods due to this culture of masses purchasing imported and sometimes subsidized goods rather than higher quality but expensive goods (I am currently writing a paper on this subject as it has been greatly overlooked).

 

He also failed to take into account the technological differences between the West and Africa which greatly hinders the production of quality goods and services and instead talks about the economies growing without showing us any clear way in which Ghana’s economy or any African economy can spur this growth. He like many other misguided individuals believe that the key to African problems lie in land rights, property rights, respect of private property and an accountable legal system. What about infrastructure, access to markets within the region and abroad, promotion of local products at home and abroad, access to cheap credit, access to information, access to technologically advanced production methods? He only talks about broad reforms bringing about some of these but he fails to show us clearly how this can be achieved.

 

Cudjoe rightly talks about high cost of capital as one of the negative factors facing farmers in Ghana but how do Property Rights or and Accountable Legal System address this factor? True better property rights would empower people to use the land or property as collateral to access credit facilities but banks across Africa still charge an arm and a leg as interests and fees on loans which would still drive your production costs up and make your product expensive on the shelf in light of cheap imported subsidized goods. Legal frameworks and property rights are but a tip of the iceberg. Broader reforms are needed to spur development and Cudjoe has again failed to highlight any measures that can be taken to tap into the entrepreneurial spirit alive in Africans.

 

Cudjoe talks about how banning rice and tomato imports would adversely affect Ghana yet nowhere did Chris Martin advocate for this. Eliminating subsidies from Western farmers does not amount to a ban but to leveling the playing field for local and imported goods. The facts should not be twisted to make an argument.

 

Does this not amount to ignoring structural problems a crime he has accused and condemned Chris Martin of?

 

True Ghana’s problems may be greater than those conceived by Chris Martin and other rock stars but how does bashing well meaning rock stars and branding them lunatic solve any glaring trade imbalances? How does attacking the very people who are simply lending Africa a voice as they strive to highlight the plight of Africa in light of the obvious trade imbalances solve Africa’s problems?

 

When Rock stars speak people will listen and what the Cudjoe’s of Africa need to do is identify the rock stars who are genuinely concerned about Africa and enlighten them on the nature and the history of the problems so when they rise to speak they speak with authority. It is no secret that celebrities and stars (rock stars included) open doors that are normally not accessible by me and you et al.

 

Jonathan Curiel, a Chronicle Staff Writer wrote: “Celebrities have always involved themselves in causes. Any list would have to include Audrey Hepburn, who worked with the United Nations International Children\'s Emergency Fund from 1988 until her death in 1993; Danny Kaye, who worked with UNICEF for 30 years, starting in the 1950s; and Humphrey Bogart, who led a 1947 group that protested the U.S. government\'s probe of communism in Hollywood. However, the last few years have seen a marked increase in the depth of their involvement.”

 

Whether it\'s Bono flying to Africa with America\'s Treasury secretary, Sean Penn visiting Iraq to protest the then-impending war or Bruce Spingsteen stumping and strumming for John Kerry, more stars than ever are pushing their political and social views into the public domain in an effort to change the world. 

 

Whether this is a welcome development depends on your perspective. Organizations that work with the stars are ecstatic for the extra publicity they get. The week Jolie was in Sierra Leone, for example, she could have been promoting her new movie, \"Mr. and Mrs. Smith,\" which co-stars Pitt and opens on Friday.

 

Instead, Jolie chose to pay her own way to Sierra Leone so she could act as a representative for Witness, a New York organization started by a musical celebrity Peter Gabriel that uses video technology to spotlight human rights causes. Why would anyone object to these efforts? Two big reasons: Suspicion of the celebrities\' motives and a sense that the celebrities don\'t really understand the problems about which they speak.”

 

He also wrote, \"Celebrities open doors, without question -- everyone wants to meet Bono -- but the amazing thing about Bono is that they want to meet him again and again because he\'s not only a celebrity but knows far more about the subject under discussion than the politicians do,\" says Jeffrey Sachs, an economics professor at Columbia University who\'s worked with Bono for six years.”

 

Jonathan Curiel unfortunately goes on to use the article that Cudjoe wrote as a case point for rock stars who ignore structural problems that continue to hinder development yet I beg to ask how does attacking Chris Martin aid in solving the structural problems or highlight them. Would it not be better to aid the well meaning rock stars in understating these structural and institutional problems so that when they speak they speak about the core issues that would go a long way to solving the problems faced by African economies?

 

Chris Martin is in a better position to open doors that need to be opened and take the message to the ears that need to hear it than Franklin Cudjoe.

 

Cudjoe has also failed to highlight what he has done to help solve the glaring trade imbalances instead he tells us what he and many other Ghanaians have known … that there are issues that need to be addressed for the local industries to prosper. What Cudjoe should undertake to do is to hold workshops and seminars for the celebrities and stars who will have genuinely chosen to lend Africa their voice so that when they speak about Africa’s problems they speak about the issues that matter with all the relevant facts to make all the valid arguments that need to be made. Telling us that Africa does not have its problems highlighted to the right people, who can influence policies that will go a long way in complementing the efforts that we as Africans will need to implement to free Africa from this economic impasse, is to cheat Africa out of its chance of advancement.

 

All in all the argument that cheap imported subsidized goods hurt local economies holds true. Allowing cheap subsidized goods to enjoy the unfair price advantage on African shelves only serves to create markets for these goods abroad as they have failed to compete in their local markets and build Western economies at the expense of local economies. The notion that our local producers need no protection yet we encourage the West to protect their own farmers and create markets for their protected products in our markets using competition as an excuse is wrong. Why for an example is it okay for the United States to provide subsidies to its cotton products to insulate it from world competition and not Ghana to provide subsidies to its tomato and rice farmers to protect them from the same competition? The answer is not to always open our markets to these products. Some of the Japans highest economic growths were recorded when they were employing protectionist strategies on their local industries.

 

Here are some excerpts on subsidies and developed countries by John Madely of the Financial Times (UK).

 

-- Government subsidies to farmers in Western countries are damaging the livelihoods of farmers in developing countries, according to a report by ActionAid. The report \"Farmgate: The developmental impact of agricultural subsidies,\" says the subsidies have led to overproduction and dumping -- exporting at prices below the cost of production -- which is throwing small farmers in developing countries out of business.

 

Rich countries are paying more than $300bn a year in subsidies to their agricultural sectors, six times more than the total amount of aid to developing countries. \"In a massive breach of faith, rather than complying with the spirit of [World Trade Organisation] agreements, and reducing levels of agricultural subsidies, rich countries have actually increased them,\" says the report.

 

At the same time, rich countries have put pressure on developing countries to reduce or eliminate subsidies. Rich countries are practicing double standards, says the report - \"protection for the rich and the free play of market forces for the poor\". The farm subsidies of the EU and the US have encouraged overproduction, distorted trade and depressed prices; and made EU and US farm goods artificially cheap on world markets, resulting in the dumping of cheap, subsidized produce in poor countries.

 

The report also states: “EU subsidies to the sugar sector are also causing problems, eradicating the competitive advantage of sugar-producing developing countries. Swaziland, for example, produces sugar at less than half the cost of EU countries, and yet is unable to compete with the EU imports that increasingly dominate its market. Subsidized EU sugar exports to Swaziland have led to the loss of about 16,000 jobs in the Swazi sugar industry and 20,000 jobs indirectly linked to the industry.”

 

I think it is high time we did something other than build pseudo legacies by attacking the very people who though misguided have taken the first step in trying to highlight problems and solutions of these problems that have existed for ages.

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