Africa and the world monetary squabble
By L. Were
Allow me to pollute your minds with my erudite rant on the current Geo-politics that’s going to affect our continent for the next 5-10 years. I am sure by now if you live on this planet earth, you’ve heard of AIIB. For those who haven’t, don’t worry, We understand the info domain is clouded with Kardashians and Euro league finals to pay attention to you future in the next decade.
AIIB (Asian Infrastructure Investment Bank) is a development bank (brainchild of China) that is meant for funding developments globally. AIIB is a huge challenge to World Bank (US Owned) and IMF (also US owned). Till now, US had their policies or as they call it, structural adjustments tied to loans they give to other countries, especially developing countries. How does structural policy works? you ask. Structural adjustment policy is where you are broke and unable to fund government liabilities like salaries for civil servants, fund development of infrastructure, education funding etc…all that good stuff the government spend money on including those fancy jets and mansions for their cronies and family members. So when your government, lets say Zambia (one of the prime examples) need cash to fund these liabilities, they would ask world bank or IMF for lets say 50 billion. Before IMF or world bank grant this loan to Zambia, they will asses what Zambia has to offer, because no bank is not gonna just give you cash without guarantee right? right. So the IMF will then see that Zambia has copper in a abundance, and since the world need copper for obvious reasons, they will tell Zambia how to spend this money, how to mine their copper, who to sell it too, and at what cost and interest. Technically they control your resources while you are still paying them back. To make it worse, they will bully you into letting only their affiliates or associate corporations do the mining, selling and transporting your resources. This means your government has zero control over your resources. By now you are asking, “what does AIIB got to do with this?” Well, AIIB offer an alternative, less aggressive and more measured way to get loans. It’s more like a village piggy bank where if in need, you can take some money out and low interest and pay it bank without losing sovereignty of your country.
Now, how do Africa comes into this? Africa is the next eldorado or the virgin land if you will. Africa is like the untouched, rich land if you will (I know, even after 100 years of exploitation) China is getting vested in Africa so much that it’s economy may not perform at the same rate without the throw away prices for the natural resources they get in Africa. However, it’s not only the resources China gets from Africa, Africa also has the fastest growing middle class population, hence MARKET for cheap Chinese goods. Well, US and China are caught up in the world power battles and whomever dominates or owns Africa will be the victor just by the sheer number of potential consumer for their manufactured products. Of course, as it stands, US is unable to compete with China on a level playing field. What US is gonna do, is use World Bank and IMF to Shower rich resource countries in Africa with ridiculous loans that they won’t pay for a 100 years. This is meant to shackle these countries that otherwise China would be getting raw materials from, and have them under US control. This is meant to suffocate Chinese access to cheap raw materials that has been fueling it’s robust, fast growing economy. Unfortunately for Africa, we have leaders standing over trillions of dollars but willing to give grounds for $ 100. You can therefore see why the next economical-geopolitics epicenter will be in Africa. Unfortunately with current leadership we have in Africa, I can’t even think of a solution or answer to this problem we are about to face. Like Steve Biko once said ” Black man you are on your own.”