A discredited economic template will cripple Zim

NEW Finance minister Mthuli Ncube and the government in general have swallowed the myths of foreign aid, investment and the International Monetary Fund (IMF) as solutions to Zimbabwe’s economic problems.

David Barber and Tendai R Mbofana

If this matter is not exposed and debated, Zimbabwean citizens will continue to be in the morass of extreme poverty for decades longer. As if 38 years have not been enough.

We hasten to say it is not their fault because all African nations have been brainwashed by the West into believing that aid, foreign investment and its unholy partners — globalisation and free trade — are the solutions to poverty.
We fully understand why they have accepted the West’s policies because it is only the developed nations, which are primarily Western, that have the practical experience and knowledge of how to take their citizens from poverty to affluence. So our nations have had no choice but to trust them (or, more particularly, their global agencies, the United Nations, World Bank, IMF and World Trade Organisation (WTO)) to show us the way.

Africa has suffered harm

The fact is that, had African nations been given the right advice immediately after colonialism ended, there is no doubt at all that their citizens would by now have been rapidly attaining Western standards of living, if not better.

And Zimbabweans would have had the knowledge to see the flaws in Robert Mugabe’s management of Zimbabwe’s economy many years ago.

First, we will dispense with the idea that the IMF and World Bank will help Zimbabwe — or any African country.
Supported by the UN, what they will do is to impose what is called a structural adjustment programme (SAP) on Zimbabwe. But you only have to study what SAPs have done to every other nation — and there are dozens of them in Africa, South America and, most recently, Greece — to realise what a diabolical scheme they are. It is not exaggerating to say SAPs have caused absolute mayhem in every country in which they have been embraced.

If you want proof that the UN, World Bank and IMF are not really interested in eradicating poverty, despite their frequent assertions, you only need to look at SAPs. Without doubt at all, the effect has been to make things even worse for those in extreme poverty and to make it far less likely they will ever escape it.
Second SAP would be terrible for Zim

But what is wrong with foreign investments? Since the end of colonialism, these have been based on paying African staff and workers at well below what is legally allowed in the West, and they are not interested in investing in any business that is aiming to take Africans out of poverty and certainly not paying Western-style incomes.
While Western investors hide this bitter truth under a pretence of “fighting poverty”, China is at least honest in that it does not peddle the lie that it is interested in helping ordinary African citizens to escape extreme poverty.
David Barber, one of the authors of this article, has personal experience of this. As he explains:
“I planned to set up a business in Africa manufacturing portable solar lamps. But, unusually, my plan was to pay Western wages to the staff and workers. Every potential investor (black or white) was prepared to back me, but without exception they would only do so only on condition that I dropped the pay scales to the usual African poverty rates which are only a fraction of their Western counterparts.
“After a while, the realisation of what foreign investment is really doing to Africa hit me. So somewhat tongue in cheek (because I knew by then I was not going to get the investment I needed on my terms), I asked them to put their offers in writing, recording that they were conditional upon my dropping the pay scales to typical African rates. Surprise, surprise, they all refused — they certainly were not going to commit anything so damning to writing! Although some did write to say that they would invest ‘subject to the conditions as verbally discussed’.
“When my plan became known to the ruling elite, I was forced to close down and leave the country. I was similarly stopped in another country. I also received threats from Western multi-national corporations to desist from offering Western rates. It was very clear to me that Western commercial and financial organisations have no interest in helping Africans escape poverty, never mind to have Western-quality lifestyles.”

The African Union (like many of the better-informed African activists and campaigners) is fully aware of the appallingly detrimental effects of Western loans and investments on Africa. In its Agenda 2063 and the accompanying First Ten-Year Implementation Plan 2014-2023, it insists that Africa has to become “self-reliant”, that is, to no longer depend on Western or Chinese aid and loans. It wants foreign aid cut by 75% by 2023, and it also wants to “minimise Africa’s dependence on the global financial system”, cutting foreign investment to no more than 10-25% of the total.
To achieve this, the First Ten-Year Implementation Plan gives African governments a step-by-step plan for taking their citizens from poverty to affluence or what it calls being “amongst the best performers in global quality of life measures”. As “the best performers” are the developed nations, its aim is therefore for all Africans to have a Western-quality lifestyle.
Now the point is this: the Zanu PF government signed Agenda 2063 some time ago. So it is fully aware of the AU’s very workable plan. So why is the government not implementing the First Ten-Year Implementation Plan?
We can tell you why. Agenda 2063 would involve the government having to work very hard at generating other available sources of revenue with which to back and support Zimbabwe’s entrepreneurs and businesspeople and this would leave very little room for corruption. Whereas foreign aid and investment leave lots of room for “backhanders”, diverting funds and fraud.
One obvious and extremely large source of funds for investment is for the government to take back the illegally acquired assets that corrupt politicians and businesspeople have acquired, much of it now abroad. For instance, Mugabe is estimated to be worth around US$10 billion, and that alone would go a very long way to financing the business base Zimbabwe needs.
It is an utter disgrace that he is allowed to live in luxury and collect a huge pension while 90% of Zimbabweans live on less than US$1,90 a day. However, there is no way a corrupt government would take such a drastic step because it would be shooting itself in the foot if it did.
We said at the start that “had African nations been given the right advice immediately after colonialism ended, there is no doubt at all that their citizens would by now have been rapidly approaching Western standards of living”. We need to explain that.
If we look at how what are now the developed nations took their citizens from poverty to their present affluence, every single one, without exception, used exactly the same formula. This formula is well-known to the UN, World Bank, IMF and WTO — as well, of course, to the governments of all developed nations — because they all followed it.
We should also say that every country that has followed this formula has taken its citizens from poverty to affluence. In other words, it has had a 100% success rate, which is pretty amazing?
Also, all the “miracle” successes since World War II used exactly the same formula to develop their economies. These countries are Japan, China, South Korea and Taiwan.
On the other hand, no country that has used any other formula has managed to take its citizens out of extreme poverty.
Now, given this evidence, you would have thought the Western agencies would have taught African nations to follow the same provenly successful formula — or, more to the point, the only formula that has ever worked in the history of nations. Yet, for some reason, not only have they not done that, they have actually made it impossible for any African country to apply the formula.
It also needs to be pointed out that no country has ever managed to escape poverty by using the aid/globalisation/free trade policy template the West keeps imposing on the developing world.
West’s formula has failed

Every developing country (and this includes every African nation) that is following the plan of the UN, World Bank, IMF and WTO is actually falling further behind the developed world. We can prove that by using the figures for per capita gross domestic product, which are the official and internationally recognised measure for a country’s economy.

In 1968, the GDP per capita for each African citizen was US$191. For each UK citizen, it was US$1 896. So each African citizen was US$1 705 behind.

In 2017, the GDP per capita for each African citizen was US$2 423. For each UK citizen, it was US$39 720. So each African citizen is now US$37 297 behind — a massive increase in the gap between African and Westerner.
And that gap is growing. Since the year 2000, the GDP per capita for each African citizen has increased by an average of US$81 a year. Each UK citizen averaged US$900, or 11 times more, a year! On this basis, it means Africans can never catch up with Westerners.

But even if the UK were to stop growing entirely (which is extremely unlikely) so Africans could catch it up by US$81 a year, it would still take Africans 460 years to eventually attain a Western-quality lifestyle!
The message to our government and Ncube could not be clearer. You need to stop wooing the West and definitely avoid the IMF and World Bank like the plague. You need to start implementing Agenda 2063. And you need to learn the formula — the only formula that has ever worked to take the citizens of a nation from poverty to affluence — and apply it to Zimbabwe.

Barber and Mbofana are co-principals of The Arise — Africans Initiative. — dbarber@arise-africa.info or Mbofana on WhatsApp: +263 715 667 700, or (calls only): +263 782 283 975.