By Fr. Julio Albanese MCCj
To talk of democracy, governance and human rights in Africa means first and foremost to take conscience of the economic-financial institutions in the framework of the globalization of the markets. Well, in this regard, I would like to remind you that the economy of the sub-Saharan Africa continues to be strongly vulnerable despite the excellent performance in terms of growth by many African countries. In the past it, was conceived that the evils of the continent (in particular in sub-Saharan Africa) were caused by the weakness of the productive processes, consumption and of movements in relation to the offer and demand on the market for commodity (Renewable Energy, minerals and agricultural products, etc). This is certainly true even today, because the prices of raw materials depend on the fate of the governments. In this regard, we certainly need to be very vigilant. But the most worrying issue today is the growth of the so-called aggregate debt of Africa, namely governments, businesses and private households, estimated to be 150 billion dollars. It is good to be reminded that Africa has already experienced a devastating debt crisis protracted in time, since the eighties till the last decade. Thanks to the project of Highly Indebted Poor Countries (HIPC), the work of the IMF and the World Bank (WB), thirty of low-income countries in sub-Saharan Africa could achieve a reduction of the debt (approximately one hundred billion dollars). To this program was added the so-called Multilateral Debt Relief Initiative (MDRI). These initiatives aroused great euphoria because many African governments breathed relief as they were allowed to access loans which they never expected. Another crucial issue about the African debt is that it does not only tend to climb, but the risk is that many governments are not in a position to honor their commitments. In other words, those that can “chock” more on the interests (the so-called “debt service”). It is a real sword of Damocles which could seriously jeopardize the growth of GDP, at least on the medium and long term.
In 2007, Ghana was the first beneficiary to be in contact with the international markets by issuing bonds equal to 750 million dollars. It was followed by four other recipients of remission; Senegal, Nigeria, Zambia and Rwanda. Access to investment funds made available by the high finance, especially in the City of London but also in other locations, was used in part to support foreign entrepreneurial activities in Africa. But it was also used to give in abundance the autochthonous oligarchies, according to the traditional dynamics of corruption more frantic and biting.
They were born, thus, subsidiary societies not able to compensate for the new debt crisis despite the growth in productivity. The new investment programs, in fact, were not associated with organic national development plans. The results were building infrastructure works, like building true cathedrals in the desert, unrelated to each other or independent entrepreneurial initiatives. Therefore, they were exposed to the predatory action of international potentates, especially on the side of raw materials and energy sources.
In the meantime, it triggered on financial markets an unbridled speculation on the excessive indebtedness of African countries that has determined the devaluation of the local currencies. One of the emblematic cases is precisely that of Ghana, considered in some respects, on the formal level, the emblem of the African boom. It is no coincidence that the first U.S. president of Afro origin, Barack Obama, in the course of his first journey in the African continent (2009), chose to stop over in Accra. The increase in the GDP and Ghanaian debt are indicatives of a systematic crisis that has affected any initiative directed to the affirmation of a local welfare able to counteract social exclusion. Moreover, if we consider that the GDP reached 15% in 2011 (8.8 and 7.6 in the two subsequent years) and that today the deficit does not appear to be diminishing and the debt (32% of GDP in 2008) has already reached 50%, there is no reason to congratulate ourselves.
Some readers might argue, affirming that in some industrialized countries such as Italy and the United States, the debt is markedly higher than GDP. It is true, but in Ghana as indeed in the vast majority of African countries, the value of GDP in absolute figures, is still very low (the Ghanaian is approximately 50 billion dollars) and therefore does not represent a guarantee for the international creditors just to give an example, that of the Lombardy Region in Italy is about 350 billion dollars. Analysts are skeptical because, according to the IMF, growth in 2016 would have been “only” 3.6 per cent. But more worrying is the fact that to repay debt, the government of Ghana is forced to sell off its strategic assets (water, oil, electricity, telephone, cocoa, diamonds, etc).
Here, the responsibilities lie both on the local managerial class and on the same international financial institutions. They demand concessions for the exploitation of raw materials, together with the privatization, especially the land grabbing, namely the hoarding of land on the part of foreign companies. All these are implemented “without ifs and buts”, to stem the debt. This is a colossal business for Chinese, Americans and Europeans because the local currency depreciated badly. The fact is that today Ghana has a double problem: it is devoid of its own financial resources and is increasingly loaded by a burden difficult to sustain.
One thing is certain: in the course of the last ten years, there has been a passage in the whole of Africa from the so-called official creditors ( the IMF, the World Bank and the African Development Bank) to private credit sources (banks, investment funds, private equity funds) and to the free market. In brief, as we have seen, it is about financing the debt that has marked the passage from traditional loans and other forms of financial assistance to bonds, both public and private to be left to the open market. It should be noted that the above mentioned obligations are in foreign currency, almost always in dollars and then subjected to movements on monetary changes, always to the detriment of national currencies in Africa. This is generating a vicious circle which could seriously jeopardize the future development of Africa. I would therefore like to share with you an important initiative promoted by a qualified group of lawyers and experts of the Italian economy of the Research Unit ‘Giorgio La Pira’ of the CNR and the Center for Judicial Studies in Latin America of the University of Rome ‘Tor Vergata’.
This was done with the collaboration of the Research Center ‘Renato Baccari’ of the Department of Law of the University of Bari.They have formally asked the Assembly of the United Nations to formulate a request to the ICC regarding coherent rules that at the moment can discipline public and private debit (national and external) of the developing countries. And issue general principles for the developed countries and the human rights of the peoples.
This was done with a strong support of the Holy Sea, of the Italian government and for the government of the countries involved in the grave economic-financial global crisis
It should be noted that this proposal has a very important precedent. The Resolution 63/319 of the Council of the United Nations in 2015, against the so called “funds vultures”, financial funds speculative that act very aggressively on the debt of the countries with grave economic difficulties. The initiative finds its inspiration in the moral principles, ethical and legal content in the historic “Charter of Sant’Agata dei Goti” (the name of the city in the center of Italy, where experienced religious and laity international gathered in 1997), which has condemned the “contract of usury”, the “excessive burdens on debt” and instead affirmed its support for the self-determination of peoples.
This question is even more urgent when we consider that since 2007, the public debt worldwide is more than doubled from 28.7 to more than 61 trillion dollars today. In other words, it represents a new threat of systematic crisis. And the poorest countries, the Africans in particular, are always the most exposed and affected by such heavy burdens.
Nov 14, 2018 0Setting out in 1993, Uganda Martyrs University (UMU) has...
Jul 03, 2018 Comments Off on When a worker is punished for being honestBy Venansio Ahabwe Mr. Naperi did not acquire a lot of...