Many people do not agree with Uganda President and his parliament’s bill against gay people. However, the reaction to this bill is making me wonder what the real objective is, for all the lobby. Is it really about human rights or something else that is not being said? Are some rights better than others? Are gay rights now better than the right to education, right to healthcare among others which are provided by organisations reliant on Foreign Aid? Does a Foreign Aid freeze actually affect many governments or they simply make the poorest people suffer more?
It is with dismay that I read that the World Bank has frozen its planned loan to Uganda. I really don’t get the logic of this. Why is Foreign Aid constantly being used as a way of ‘punishing’ African governments who do not toe the line of Western Powers’ aspirations?
The rationale for foreign aid is usually that everyone has the right to education, healthcare, life, freedom of expression etc and in cases where local governments cannot fulfill this, foreign governments and organisations come in to fill the void. How then does refusing aid to organisations working in Uganda because the president signed a bill which ostensibly denies gays of their rights, becomes the right thing to do?
If anything, I just see many more children who were going to school because of aid to educational organisations, denied the right to education. Many people who benefited from foreign organisations providing healthcare denied the right to healthcare and many children dying at birth because organisations working to combat infant mortality are starved of the much needed funds.
The only aid that should be denied any government is military aid because it will affect the government directly. Unfortunately I doubt if this type of aid is ever frozen. In most cases, it mutates into a debt which the recipient country has to pay whenever the recalcitrant government leaves power.
This is just another reason why foreign aid should never be an option for African governments because it tends to be used as a weapon for negotiation. If any country is unhappy with Uganda, they should look for better ways to attack Museveni and his government rather than taking a route which will end up affecting the very poor, who perhaps do not matter to the government in the first place.
In most African countries, the prices of basic commodies are greatly linked to the price of fuel. This could be attributed to the cost of transportation which increases with fuel price increases and the high elasticity of local demands which make it easier for the consumers to bear the biggest brunt of any increases. This no doubt makes one sees how the capitalist system is working harder than ever to increase the chasm between rich and poor. The removal of the fuel subsidy in Nigeria and the mayhem that followed seem to have been the test-drive by the IMF and World Bank. Since protests in Nigeria did not have much impact, there is now consideration of covering more grounds. Cameroon happens to be next in line – but unlike Nigeria that recieved so much attention, I will not be suprised if ‘France-dominated Cameroon’s removal goes unnoticed.
The thought of it has however made me go back to look at an article I wrote for FabAfrique Magazine on the ‘Red Gold’. If the problem of black gold has been subsidies, what exactly is the problem of this resource?
Over the last few months I have not ceased to wonder if Africa would have been better-off without all the abundance of natural resources. What with all the appellations like Collier’s ‘Natural Resource Trap’, the ‘Natural Resource Curse’ or most strangely, the one that beats me most, the ‘Dutch Disease’. The paradox of a blessing being a curse at the same time, is one too complex for my little head to fathom. But behold, the evidence is overwhelming and I cannot pretend not to see it – the conflict that seems to accompany natural resources and the widespread poverty in Africa – a land of affluence.
It is a fact that Africa is blessed with rich soil that permits it to grow almost everything needed for mankind’s existence. There’s cocoa for chocolate, and its related products, coffee for tea, timber for construction and the making of wooden instruments and paper, cotton for clothing, palm for palm oil, and many others.
Africa is also flooded with natural resources that the world largely depends on. Amongst these are gold, copper, bauxite, diamond, and the one that is usually called “black gold”, crude oil. Another form of “gold” has come up today, which I term “red gold”. This is crude palm oil that amounts for a greater part of income in countries like Nigeria, Ivory Coast, DR Congo and Cameroon. And it is these countries that stand tall in the hall of fame of crude palm oil production in Africa.
Unfortunately, it is also a fact that diamonds are responsible for Sierra Leone’s worst nightmare, that Nigeria’s fuel subsidy crisis is a manifestation of the case of a country ‘living at the banks of a river and washing its hands with spittle’, that the civil war in the Congo and the Libyan crisis are cases where resources have made people wolf unto their brothers – just to name a few.
Am I deliberately leaving out Cameroon here? This should not have been surprising since World Bank Director Paul Collier in his award winning book The Bottom Billion deliberately leaves out Cameroon in most serious discussions and only mentions it briefly when referring to the depletion of resources in the Country.
I am not going to delve into questioning why Cameroon seems so much under the radar or where the depleted resources have gone to, but I am bound by conscience to wonder if Cameroon is free from the resource curse. I am going to take a look at just one resource here – what I call The ‘Red Gold’. This is crude palm oil that accounts for a greater part of income in countries like Nigeria, Ivory Coast, Democratic Republic of Congo, and Cameroon. These are the countries that stand tall in the hall of fame of crude palm production in Africa.
The Republic of Cameroon which ranks fourth in crude palm oil production in Africa according to the United Nation’s Food and Agricultural Organization (FAO) has crude palm oil as one of its main agricultural products. The country which is fondly called ‘Africa in miniature’ can boost of a yearly production of about 200,000 tons of palm oil. In 2011, production was 210,000 tons up from the previous 200,000 tons.
Crude palm oil which has always been a part of the
people of much of West Africa, and Cameroon in particular actually gained industrial prominence in 1910 when the Germans established industrial plantation units around Edea under the Société de Palmerais de la Ferme Suisse. Then, came the Cameroon Development Corporation (CDC), in the 1940s. And later on the PAMOIL Cameroon Ltd.
Palm oil production in Cameroon is highly favored by the tropical climate that consist of 4 to 5 months of dry season, and about 7 to 8 months of rainy season, coupled with the South West Monsoon wind that blows across the coast of the country where large agro industrial corporations like the Cameroon Development Corporation (CDC) is situated, including the Palm Oil Corporation of Cameroon (PAMOIL), the Manyu Oil Palm Initiative. Independent farmers too, are involved in this highly lucrative business, and most of them have come under the Cameroon Association of Palm Oil Producers, headed by Claude Leonard Mpouma, and the Small Holders Scheme.
Large farms of palm nuts used in the production of palm oil which covers about 170,000 hectares can be seen mainly in the South West, South, Littoral, Centre and East.
This new form of “Red Gold” generates a yearly income of more 200 billion FCFA, about 400 million dollars, and provides about 65,000 indirect and direct jobs.
Because of the high quality of Cameroon’s crude red palm oil; which is cholesterol free and rich in vitamin E, there’s high demand for it at home and abroad. If it is not demanded for cooking, it is demanded for the making of soap and other cosmetic products found in the greatest shops around the world.
The exponential growth in demand has meant the supply is lagging as local production fails to grow simultaneously thanks to the poor state of farm-to-market roads, crude or rudimentary machines used by some small holders and the poor quality of some of the seedlings causing am almost 100% increase in the price of palm oil from the official 450frs CFA (almost a dollar) to about 750frs CFA in the black market. This poses a problem given that a majority of Cameroonians in the local areas live on less than a dollar a day. Much like Black Gold, this resource seems to be going down the road of becoming too expensive for the ordinary man.
While one could be optimistic enough to say that the future of palm oil in Cameroon is bright because of the ‘tarring’ of some farm-to-market roads, like the famous Kumba-Buea stretch of road, the widening of the Douala –Yaoundé road, and the provision of high yielding palm seedlings to farmers by structures like the Cameroon Development Corporation (CDC), PAMOIL Cameroon Ltd, Programme de Developémment de Palmerais Villageois(PDPV), which also coordinates the activities of small holders farmers, the question that remains unanswered is whether these modest achievements are worth commending in a country so richly blessed
Maybe I am not being reasonable here, given that the government has signed many agreements in favor of the farmers and in 2010, it jointly launched a project with the government of the Federal Republic of Nigeria (Africa’s biggest producer of palm oil) aimed at generating income in the palm oil sector in four years time, supported by the United Nations Industrial Development Organization and the Common Fund for Commodities. Recently, Cameroon and UNIDO reached a deal in Vienna, Austria to promote the industrialization of palm oil production in Cameroon. Following this programme, four pilot centres were chosen; the Agro Industrial Unit in Bora in the East, Massoumbou Gardens in Littoral, the Agro Industrial Development Company in the South and the Manya Oil Palm Cooperative in the South West. This will certainly bridge the gap between demand and supply which requires the creation of about 20,000 hectares of palm tree farms yearly.
These are wonderful efforts with great prospects but history and the reality of international trade dampen my hilarity. It is true that today, for the first time, most African countries have made the most impressive breakthrough into global markets for goods and services other than just primary products, it is also true that most of the firms established during the colonial era, still continue to play a major role in the export-import trade of the now independent States which were their former colonial preserves. Most of these pay very low prices for the cash crops they export to Europe while they set very high prices for the finished products they import for sale in Africa. Also, the major share of their profits is sent back to their home countries rather than being invested in the African economies where the profits are made. This has the unfortunate effect that a structural imbalance is created in the African economies resulting from their over dependence on the export of one of few primary products and this makes their economies extremely vulnerable to external factors and seriously hinders their internal development.
This is my fear for the future of ‘Red Gold’.
 The Dutch disease is an economic concept that explains the apparent relationship between the increase in exploitation of natural resources and a decline in the manufacturing sector.
The sudden pulling out of Colombia’s Jose Antonio Ocampo from the race of the next president of the World Bank, seems to be the final signal to the likelihood that an American would be chosen given that the US has the most votes at the Bank. To Ocampo”It is clear that this is not based on the merits of the candidates but is a political exercise”
This observation is akin to the reaction that the US attitude has provoked from Mo Ibrahim (of the African governance index/ Celtel fame,) Following are his words:
‘This week sees the lobbying and deal-making ahead of the election of the President of the World Bank reach its peak.
But for all the rhetoric and campaigning, the outcome remains sadly predetermined.
It is high time the US foregoes its sense of entitlement at the World Bank and allows a merit-based and transparent contest for the presidency to allow non-American candidates a genuine chance of winning. But what we are drifting towards is a continuation of the status quo.
The world is changing. For more than a decade now, since the Asian financial crisis, developing nations and emerging powers have sought to reflect the evolution of the global economy and geo-strategic concerns in the structure and leadership of international institutions. It is an anachronism for the leadership of the World Bank, and its sister institution the International Monetary Fund, to remain the sole preserve of established powers. However, established powers seem determined to cling on desperately to these last bastions of twentieth century geopolitics.
The World Bank is an institution of critical importance for the global economy. It is vital that the President of the World Bank be the most competent and experienced candidate for the task. For the first time, this year, there are two credible candidates from the developing world.e of governments and corporate boards to execute their governance responsibilities still reverberate. Yet so soon afterwards, it is becoming clear that the appropriate lessons have not been learnt.
Many of my US and European friends, people who are outspoken on issues of development, governance and democracy, are conspicuously silent now. Some of my American friends cite the US election as a reason not to rock the boat. Others feel embarrassed about appearing disloyal. But these are not credible justifications.
No candidate for the Presidency of the United States will win or lose the forthcoming US election on the basis of how strongly Washington maintains its grip on the World Bank.
Moreover, while France’s quid pro quo support for the US can be taken for granted in the light of Christine Lagarde’s unchallenged ascendancy to IMF Director-General, the rest of Europe has little to gain from preserving the existing arrangement. Nations such as the UK and Germany have a chance to show the kind of leadership on this issue that they displayed during the last round of climate negotiations in Durban.
This is an issue of livelihoods for hundreds of millions of the world’s citizens. On this issue, the interests of US citizens are aligned with those of the citizens of all other nations – a properly-managed, efficient World Bank that promotes sustainable and equitable growth is to the benefit of everyone in our interdependent world.
While citizens across the world fight against cronyism, electoral malpractice and bad governance, we must ensure that our global public institutions set the right example. No-one can lecture developing countries on how to manage their processes, public and private sector, if they so brazenly do not conform to the same standards. Moreover, if this election process is not an open contest, it undermines the principle of fair competition that the US and the World Bank have traditionally exported to the rest of the world.
Having a transparent, open and merit-based process is of course the morally right thing to do. What is more important is that it is the smart thing to do. As the Bank engages in the delicate act of advising governments on best practice, its own leadership must have legitimacy. The Bank’s at times heavy handed approach in the developing world has created a well of bad feeling which already undermines its relevance. This election is a chance to restore the confidence of the Bank’s partners, and even its staff, in the institution.
When the Bank was created in 1944, the world looked very different. Today China is the second largest economy in the world, Brazil the sixth. European economies are struggling with austerity measures while African economies are growing faster than ever.
At this time of global political and economic upheaval, as developed countries watch new powers emerge, the Bank must move away from its post-Second World War origins and reposition itself for the new century. While 20th Century powers drag their feet over UN Security Council reform, here is a comparatively easy step along the path of reframing our global governance architecture.
There would be no better way to begin this process than by a merit-based election for World Bank President. This is a wonderful opportunity. The world is watching to see if it will be taken.”