“Debt
is a cleverly managed reconquest of Africa.” – Thomas Sankara.
“He
who feeds you, controls you.” – Thomas Sankara.
While acknowledging
the importance of borrowing as a measure aimed at financing key projects and
economic activities for a country, the primary concern remains the
sustainability of debt, and how debt financing affects the overall economic
performance.
With a number of debt
analysts, for instance the Jubilee Debt Campaign, pointing
out to an impending debt crisis for African countries, it would be
fundamental to first consider the politics and economics of external debt, and
secondly, the conditionalities attached to it.
In regards to the politics
and economics of external debt, the late Thomas Sankara aptly summarizes it in
terms of the reconquest of Africa. Essentially, loans advanced by various
entities are repaid with interest, and this generates income for the creditors.
As such, more Chinese debt for the African countries means more income for
China, a similar case with the World Bank and other creditors.
Politically, geopolitical
ambitions fuel the need for the formation and adoption of the so-called mutual trading
partnerships. Elementally, such partnerships largely benefit the foreign
entities that issue out loans to the developing economies.
Africa is a card shuffled
by foreigners for ages resulting in dehumanizing statements such as “whoever
controls Africa controls the world.” From the Arab slave trade, the
Trans-Atlantic trade, colonialism and currently the neo-colonialism era,
foreigners dictate the pace of Africa’s game at the global stage.
Part of the
foreigners’ games of strategy include foreign aid whose failures override its
successes. Advancing foreign aid in form of loans and grants comes attached
with conditionalities. The World Bank and the Western states especially in the
1980s and 90s often offered foreign aid with calls for adoption of democratic
institutions and market-oriented economic policies. This changed following
China’s increased presence in Africa with African countries preferring to
partner with the Dragon on the account of issuing loans without
conditionalities.
The perception that
the Chinese loans come with no conditionalities is a lie! It is commonsense
economics that there is no free lunch and there must be a trade-off between cooperating
entities. Therefore, for China, issuing loans to African countries is not
enough. Access to African markets is a condition inherently pegged on the
Chinese loans.
Recently, Uhuru
Kenyatta banned
the importation of fish from China arguing that the local fish market was on a
free-fall. In response
to the supposed ban, China, through her ambassador to Kenya Li Xuhang termed it
as a trade war while threatening to impose trade sanctions including cutting
funding for the economically unviable standard gauge railway line. However, the
threats by the Dragon never took effect following the suspension
of the ban by the Kenyan government.
Back to the moral
sentiments of the indefatigable Thomas Sankara, whoever feeds you controls you.
Signing of economic partnerships between African countries and foreign entities
involves so many underhand deals that are never disclosed to the public. Such
covert deals, in the case of China, seek to create markets for the Chinese
goods, and employment for the Chinese people. The government’s suspension of
the ban on Chinese fish and China’s threats exemplify the Sankarist view on
foreign aid, and dispel the notion that China’s loans are free from
conditionalities.
Ordinarily, trade
relationships between two countries need to be a win-win affair but the
so-called economic partnerships propagated by China can best be classified as
highly parasitic and imbalanced.
Take a look at the
trade statistics between Kenya and China and notice how it is highly imbalanced.
According to the July-September
2018 issue of the Policy Monitor magazine
published by the Kenya Institute of Public Policy Research and Analysis
(KIPPRA), Kenya imported Chinese goods worth Kshs.390 billion in 2017 and
exported commodities worth Kshs.9.9 billion to China in the same year.
An anachronistic plan
hatched by China in 2016 to lure the East African Community member states to
signing a free trade agreement with her indicates an aggressive ambition by the
Asian nation to capture and control the markets of the region.
Luckily, the Kenyan
government rejected
the trade arrangement which would have led to the death of the Kenyan
industries especially the medium and small microenterprises. In as much as this
move may be termed as protectionist, it is necessary that the Kenyan government
adopt highly protectionist policies to promote the growth and development of
the manufacturing sector, key in creating a high number of employment opportunities.
Free trade favors
advanced economies and leaves the poor, developing countries worse off. China’s
intentions to convince the East African Community member states to sign the
free trade agreement ignores the global economic history of development. China
and the Asian
Tigers realized faster economic growth and development on the basis of policies
protecting the infant industries, the same case with the now classified
developed economies like the USA, Germany, Britain and others.
Going back to the
reaction by the Chinese ambassador to Kenya, he bluffed that Kenya’s ban on
imported Chinese fish was against “the principle of free trade, the rule of
law, adherence to bilateral agreements and the rules of the World Trade
Organization (WTO).” All these aforementioned trade doctrines will never work
in favor of developing countries including Kenya because of their skewed nature
working to the advantage of the advanced economies.
Fast forward, was the
ban on the imported Chinese fish doomed to fail? Possibly yes. In June this
year, the not-so-competent Cabinet Secretary in charge of the Ministry of
Agriculture, Mwangi Kiunjuri, came
to the defense of the importation of the Chinese fish stating that the supply
in the local market never met the demand. Quite logical.
But there are
fundamental issues which if addressed would ward off the importation of fish
from China. The first issue is to incentivize the production of fish especially
in geographical areas where fishing is one of the main economic activities.
Additionally, fish farming has to be encouraged but this should be among communities
familiar with fishing.
As matter-of-factly, the
Kshs.60 million fish processing factory built in Nyeri County in 2015,
following the introduction of fish farming in the region as part of the
2009/2010 Economic Stimulus Programme (ESP), is now considered to be a white
elephant with its location among a community not accustomed to eating fish heavily
influencing its collapse.
Lack of initiative by
the Jubilee administration to address the root cause of the increased
importation of fish from China is deliberate. Kenya is China’s captive market
and with the Chinese loans and/or debts, the Mandarins will dictate what they
want in exchange for their financial and technical assistance.
Failure of Kenya and
other African countries to learn from history is the bane for their economic
floundering. Western powers considered African countries to be captive markets
during the colonial era and thereafter in the post-colonial period. The same
script is being played by China; on advancing ‘cheap’ loans and controlling the
markets. This is neo-colonialism and lack of economic independence.
Therefore, increase in
the importation of Chinese fish has got more to do with Kenya being a captive
market as a consequence of borrowing finances from China than the purported
high demand and lower supply in the local fish market.
