By Ismail B. Kandeh
Africa is presently crushing and crumbling under the gruesome weight of its external debts. And the external debt uploading superpowers are counter-acusing each other as to who among them is responsible the most for the continent’s genocidal external debt crisis.
It’s on record that the Bretton Woods Institutions (IMF and World Bank) with their western shareholder governments, development agencies and multilateral banks have poured over $400 billion into Africa since the 1960s (ITRD Consulting Group, 2022), hence the continent got firmly trapped in an unending vicious cycle of external debt crisis.
For instance, as of end 2023 Sierra Leone’s foreign debt increased by 358.40% to about $2.53 billion from $0.55 billion in 2007. When the civil war ended in 2000, Sierra Leone’s external debt was $1.25 billion that decreased by 55.86% to $0.55 billion in 2007 due to the country’s benefit from the IMF and World Bank’s Heavily Indebted Poor Countries (HIPC) debt relief initiative in that year. But in the past 16 years since that time the country’s external debt has again been exponentially increasing to where it is today at what is described as an unsustainable external debt level. The country’s external foreign debt increased by 218.88% in 11 years from $0.55 billion in 2007 to $1.76 billion in 2018, which further increased by 43.75% in the past immediate 5 years to about $2.53 billion in 2023 (www.macrotrends.net).
Most people consider this kind of exponential increase in foreign debt as a bad thing for Africa!! But is incurring foreign debt or aid loan by a country actually a bad thing to do? Foreign debt or aid loan in pure economic sense is not really a bad thing to do but rather what is bad is poorly negotiated, misdirected, and misused aid loan resources that is bad. In economic sense, it is not necessarily wrong for countries to borrow but the borrowing should be used to generate a net return value and, which many times has not been the case in Africa. Our African ‘big men’ always negotiated dubious poor loans due to the intoxicating influence of ‘brown-envelop-kush’, misdirected loans to areas of little or no relevance to productive economic development apart from reckless spending such as bloated recurrent expenditure, and worst still diverted substantial portions of loan resources to personal use through chronic grand corruption. And this is exactly where the problem lies with foreign borrowing by African countries; incurring huge external debt with very little or no development impact shown for it!!
The continent’s traditional lenders, the BWIs (IMF and World Bank) with their western shareholder governments and development aid agencies, have been far too reluctant to direct significant aid loan to directly develop the economic infrastructure that are relevant to Africa’s industrialization for job creation, growth and economic development as they did for war-torn Europe after WWII, and inversely the African governments/leaders too would not either insist to direct aid loan to the development of their countries’ economic infrastructure or always negotiated, misdirected, and misused aid loans.
We do hear the speeches delivered by African leaders/presidents during the recent (May 2024) World Bank International Development Association (IDA) Conference in Nairobi, Kenya. And one that catch public interest is the speech delivered by the Ugandan President Yoweri Museveni who observed that foreign aid loans/debts from western international development partners to Africa are hardly directed to productive economic infrastructure (electricity and power, railway & road or port etc) that are crucial to the continent’s industrialization and economic growth but rather are always directed to the least or non-productive sectors like workshop capacity development, institutional and ruinous policy reforms, which objectives never got accomplished.
Recently I came across an article in the international news media on Internet that talks about the Federal Government of Nigeria in collaboration with the World Bank eying the development of a 10,000 MW hydropower for sustainable electricity. I was eagerly enthused to read the article but only half-way through the article did I realise the objective of the World Bank’s funding is not to develop any new hydropower plant but rather to ‘enhance the utilisation of existing hydropower facilities (none of which was developed by them!) for both irrigation and electricity generation by strengthening institutional frameworks related to integrated water resources management within Nigeria’. There is nothing different from what President Museveni mocks in his IDA Conference speech as ‘intangible workshop capacity development and ruinous policy reform projects’ direction of western international development partners’ aid funding!! Nothing absolutely different!!
Why are Africa’s traditional western international aid agencies with their governments not directing significant aid loan to the development of the continent’s productive economic infrastructure, and why our African governments/leaders not insisting to direct aid loan in that direction?? In short, the answer is they both protect each other’s vested interests, courtesy Africanist Press Chernor Alpha Bah. African governments/leaders to hang on to political power whereas the foreign aid agencies with their shareholder governments to rake money out of the continent at free will!!!
The continent is such trapped in this vicious cycle of external debt crisis that most people have resigned Africa’s economic fate to divine intervention!! African governments/leaders who remain cozy to IMF and World Bank’s ruinous policy reform projects invites economic hardship to the anger of their populations with consequences of either being voted out of power or rooted out of power by military coup d’etats, whereas those who brave it to remain independent minded or non-compliant with aid conditionality in favor of their populations invites the wrath of the invincible hands of regime change. This situation has resulted, at least for the meantime, in collusion of the two parties protecting each other’s interest at the expense of the ordinary populations in Africa.
When the World Bank was created in 1944 as the International Bank for Reconstruction and Development (IBRD) it was not for workshop capacity development and vague ruinous policy reforms, but for real productive economic I frastructure development as we saw it complimented the US marshal plan post-war Europe. So why the twist in direction by the World Bank with their western shareholder governments for Africa when the continent needs most the urgent development of its productive economic infrastructure as basis of its industrialization for its much-needed job creation, growth and economic development??
Africa need not to deny any well negotiated, well directed, and well managed aid loan for its productive economic infrastructure development from any international development partner whether from West, East or the Middle. But if the BWIs (IMF and World Bank) with their western government shareholders do not change course to the right direction for development aid in Africa, then their wrong development aid course is sure to make them fast wane to fast emerge alternative aid powers dominant and victorious on the African co tinent in the soonest possible time. And African governments/leaders also need to be prudent with foreign aid handling or perish with it in the hands of their angered broke and hungry populations. Can anyone hear us?? LONTA.