Global Financial Crisis: Africa Must Rethink its Economic Paradigms

Published on 20th October 2008

Now that it’s no longer speculation that Capitalism can go under like communism, Africa must take a note reminiscent to her future.  This quagmire started late September in the US. Mega companies Fannie Mae and Freddie Mac went under thanks to the so called toxic mortgage. Before the dust settled, Lehman brothers, an international giant in financial business, went under for the same reasons. Wachovia did not escape, not to mention AIG that was saved by the government.

The US, a pinnacle, bastion and panacea of capitalism had to do something to avoid witnessing capitalism collapse overnight as it happened to communism and socialism.For the first time, what seems to be socialism introversion-bailout became a magic bullet as the government scooped 700 billion dollars (of tax payer’s money) and offered it to private institutions.Politicians, especially the senators and representatives, had to inevitably give their consent to the president to ‘steal’ from the tax payer so as to serve private business. One senator called this ‘un-American’. And indeed it is. Socialism means was used to save capitalism!

The first bail-out bill ended a cropper thanks to the fear of election for some representatives.The government, under its paradigm of fear, warned that if the bickering politicians would not vote for the bill, the economy of the top rich nation could collapse. The government got what it craved for. In the same week, financial markets tumbled to negative territories in history so as to force the representatives to give in and give their consent.

The seismic tremors and heat that started in Washington was felt in London, Dubai,  Tokyo Hong Kong and everywhere in rich countries. Topspins in world financial capitals sounded their drums of doom. The sin of letting powerful connected individuals to own people, their means of production and resources is clearly seen and felt.

Given that the high and mighty is gasping for air, what is Africa’s position? Do our prefects see this danger we’re in? We recently heard the head of IMF, Dominique Straus Khan and World Bank boss Robert Zoellick, warn that shall this credit crunch and economic misnomer go on, Africa will bear the brunt.

Consider President Jakaya Kikwete’s foreign trips. His spokesperson says that Kikwete’s trips are good for the country because he globe trots to solicit aid.What I just can’t understand is, the donor community has already registered their worries. Why should African beggars still languish on self-assurance that begging will still go on whilst the donors are looking at it differently?

Africa has to grab this chance to redound her economies by reducing dependence on donor countries. For example the prices of fuel are going to drop considerably thanks to the decrease of power of consuming for rich countries. This will create less demand compared to supply and of course costs of production. This will help Africa do away with increasing hardship so as to embark on sound plans to rejuvenate her economy.

Another area Africa is likely to benefit is doing away with surrogate regimes sired and created by rich countries. Rich countries will not inject money to these ever-hungry governments. Hence private armies in Rwanda and Uganda are likely to be slashed in numbers.
True, shall our rulers, keep on self-assuring: there’ll be begging business as usual at this time of crisis, the hoi polloi will rebel and turn tables against them. Given that donors have openly said they will slash aid, our rulers will turn to the already suffocated hoi polloi to finance their extravagant lives.Whilst the everywhere on earth governments are struggling to save their economies, nothing is heard of from Africa. Doesn’t this show and imply Africa is ruled by lame ducks seating on golden eggs as they crave for donors’ dry grain?  

All African countries that used to enjoy economic support from the Soviet Union and China found themselves in an impasse when communism collapsed. Africa ought to have learnt from this.China, a rising global economy, instead of depending on political potentates, depends on its own business people to go wherever there are materials to do business. Refer to the increase of Chinese almost everywhere in Africa as they’re involved in all levels and types of business.  Now that capitalism is on the verge of its demise, who will cover this seemingly vacuum?

Should the world resort to neo-socialism based on transparency and accountability? Indeed, what’s being done currently to save world economy is typically socialistic. Is the capitalism dream becoming a capitalism scream?

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