No single person or institution has a monopoly of solutions to Africa’s development challenges. What is worse, ‘business as usual’ has not helped Africa in the last 40 years and is not going to help Africa in the foreseeable generation unless we change our way of thinking. We need to ‘think outside the box’ for new ideas. A great deal of creativity and innovation is needed from Africans, both at home and abroad, as well as from friends of Africa and Africa’s development partners, to tackle our multiple problems if we are going to achieve the MDGs by 2015.

Although Africa has a lot of sympathizers around the world, Africans cannot just sit back and expect to be spoon-fed by the international community for ever. Neither can we afford to blame others indefinitely for our malaise. Africans both at home and in the Diaspora must ultimately assume the greater burden of their destiny. Speaking as one African to another, we need to advance breakthrough ideas and map out viable implementation strategies on agreeable solutions to enhance the quality of life of our people who look to us, the elite, for salvation from poverty and the misery of underdevelopment.

Poverty Reduction

The phrase ‘poverty reduction’ has gained currency in development discourse and many people use it glibly even in situations that contribute nothing to poverty reduction. The usual gauge of how rich or poor the citizens of a country are, is not improved roads, free education, free healthcare, or even the elimination of corruption, important as all these variables are in a healthy society. It is something called ‘per capita income’ which is the average annual income of individuals in the country. Even if some magical donor were to enable the government to provide its citizens with better physical infrastructure as well as free education, free health and other goodies, the citizens would still be as poor as they were before the arrival of the mythical benefactor.

What is amiss? None of these freebies puts money in individual pockets of the masses. On the other hand, if a magic wand created millions of new jobs, entrepreneurs and asset owners, it would most certainly lead to a rise in the per capita income. The citizens would be better off. The tax base would expand, meaning more sustainable revenues for the government. From the taxes, the government would have more money for those roads, schools and hospitals.

How do Western countries address poverty in their own ranks? In the US alone, there are numerous poverty alleviation programs in the state and private sectors. And there are just as many such programs in the EU countries as well. All these programs have one characteristic in common. They put real money (cold cash) in the hands of the poor by design to maintain aggregate consumption levels for a robust economy. Why can’t the West apply their age-old proven techniques to poverty-stricken countries in the Third World? Not one of their programs is being promoted in Africa. Is African poverty different from Western poverty? Suffice it to say that the HIPC Program has been in existence since 1996 with successful implementations in a number of countries. Yet, no one can identify any post-HIPC countries where poverty reduction has been recorded and by how much.

People know poverty when they see it; they also know prosperity when they see it. We need an agreeable definition of poverty reduction based on standard measures that everybody can see. Nobody, not even in the World Bank, has come up with a concise definition of poverty reduction and how it is measured. So first things first, we need to participate in the definition of this concept and set the parameters that we can all agree on.

The ‘symptomatic economics’ (the tendency to address symptoms instead of causes) arises from the school of thought that sees money as the cure of poverty or food as the solution to hunger. Lack of money is a symptom, not a cause, of poverty. Poverty is cured not with money but by gaining access to the productiveness- the skills, tools and assets, in that order- required to earn money.

Migration and the African Diaspora

The African expatriates living and working in America and Europe respectively today are Africa’s most precious and under-utilized resource. These individuals not only earn money abroad and send some of it back to their families, but also represent an incredible human resource of expertise, knowledge, education, experience, entrepreneurship and enthusiasm that can be deployed creatively on a host of development fronts back home, if only we could create ideas with attractive incentives. We need ideas that put the nationals of the country in the ‘driver’s seat’ under the premise that development is a do-it-yourself proposition. No one can develop Africa but Africans themselves.

For a long time, African leaders have been gathering in high profile Summits of their own to discuss African crises on their own terms, but no results have been apparent from the top. Their ineffectiveness may well lie in their official neglect to engage their own people in a national dialogue. The challenge of our underdevelopment is too big to leave to the politicians alone. We, too, as Africans in the Diaspora, have been conducting our own well-attended conferences in various Western capitals propounding all kinds of solutions that never see the light of day.

There is no point in rehashing African problems at every forum. Who doesn’t know the ‘Anatomy of African problems?’ The hard part is agreeing on solutions. Hindsight is always easy. It is thinking ahead that is hard. The African Presidents who are the prime movers of NEPAD, have called for a credible plan to involve the African Diaspora in NEPAD. They are right. Africans in the Diaspora are clearly underutilized. They can do a lot more, if offered the right incentives. This is the community whose aggregate remittance to their home countries far exceeds all forms of foreign aid combined. Africans in the Diaspora could serve a dual function: as a base for external resource mobilization and also as a lobbying group in Western capitals to promote increased inflows of foreign direct investment (FDI). It stands to reason that foreigners cannot be enticed to invest in Africa if Africans themselves are not investing there.

Remittances

Remittances stimulate the economy by increasing currency flow and consumer purchasing power. These are literally life saving injections, but we can’t help everybody individually in the whole country. Instead, when we help our countries economically through ingenious programs and the economies improve, the effects spill over to everybody in the country. We can mobilize expatriate Africans to pool their remittances to purchase one or more of the state-owned enterprises (SOEs) slated for privatization, resulting in widespread ownership of these assets by the nationals of the country and the ploughing back of their dividend earnings back into the economy, leading to massive economic stimulation, accelerated growth and poverty reduction. The African Diaspora constitutes the most indispensable catalyst in the accelerated development of their home countries because they have a permanent vested interest in the well-being of their people.

Ownership Culture

There is no sustainable way to poverty reduction unless Africa widens the base of economic participants. When knowledgeable people speak of indigenous capital ownership as the sine qua non of sustainable development, they point to the right solution. I have in mind a specific new development paradigm, based on broad participation of the population in market driven economic activities. This paradigm is discussed thoroughly on DeniAfrica.com where it does not only postulate but provides a road map of how Africa can create millions of entrepreneurs and business asset owners and not just a handful of millionaires. The ingenuity of this concept, called Direct Expatriates Nationals Investment (DENI), is to widen the base of Africans participating in the revival and stimulation of their economies.

Initiatives such as NEPAD pride themselves in looking for African solutions to African problems. NEPAD has a lot of laudable goals but based on the wrong premise that money is the cause of development, not the effect. The truth of the matter is the other way around. The strategy should be to impress upon African governments to support a privatization and commercialization model that advances broad-based indigenous ownership of income-generating assets and not simply make the rich richer. Specific and transparent policy initiatives, in this regard, are likely to be more fruitful and the results more robust, if all those focusing on poverty reduction insist on a steady broadening of asset ownership to correspond to a steady and measurable alleviation of poverty. That is the litmus test of a value-added contribution. An asset ownership strategy as yet an overlooked component in country PRSPs holds great promise in turning assetless citizens into proactive stakeholders in the stability of their country.

People create wealth, not the government. This is a classic example of an anomaly where all the planned expenditures on government programs can be met under the MDGs and yet the people will still be poor. This is the hidden danger we see facing the MDGs in the African region. NEPAD has failed to inspire ordinary people because of its lopsided emphasis on government programs, not on people-driven initiatives.

Development

Africa’s development is linked to its ability to attract investment capital in terms of both money and skilled people who are technologically savvy and who can develop robust private sector economies in Africa. The challenge facing Africa is to raise the level of private investment to promote development, particularly in infrastructure and technology. But foreign direct investors (FDI) are not going to invest in Africa if Africans themselves are not investing in their own economies. So, Africans both at home and abroad must lead the way and show that we have full confidence in our economies. This is the only reliable way to create jobs and wealth thereby eradicating poverty. Foreign Direct Investment follows a modicum of development, it does not precede it.

The Debt Forgiveness Campaign spearheaded by Jubilee2000 inadvertently stymied Africa by infusing the African leadership with the obsession that debt forgiveness is a panacea for all our development problems. It is not. And now we are learning the hard truth that the debt forgiveness that so many fought for has not resulted in poverty reduction. Thus, poverty will continue even with the cancellation of debt. Debt can be cancelled with the stroke of the pen, but poverty cannot be cancelled by the stroke of the pen. What is needed is a long-term self-help recovery strategy based on people-driven programs that will turn Africa from aid dependency to trade dependency. That is how all nations developed. No nation has ever developed by aid alone. History tells us that most successful nations relied on trade and commerce. Africa cannot be the exception.

F.W Kwoba

US-Africa Business Council