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George Ayittey on the future of African economies | Canadian Insurance

George Ayittey on the future of African economies

George Ayittey has his own descriptions of Africa's economic wildlife. Some are not very flattering.

Pretend it’s 1994 and you’re a well respected African economist travelling from Senegal to the U.S. Before you board the plane, you buy something at the Senegalese airport, and the cashier gives you your change in recently devalued CFA francs. Now you have two options. You can walk away with change that would get laughed out of even a Monopoly game, or you can ask for dollars instead.

George Ayittey—retired economics professor from the American University in Washington, D.C., founder and president of the Free Africa Foundation, author of several books about African issues, and one of Foreign Policy maga – zine’s top 100 global thinkers of 2010— refused the francs.

“Soon some kind of an altercation took place, and they went and brought the police inspector,” recalls Ayittey. “The police inspector saw me and said ‘I know this guy, he’s a troublemaker.’”

He tried to explain his refusal, and was then detained in a cell for hours. “They put me into the airport, you know, jail, because I said I wasn’t going to take the money. I was trying to tell them that the money was worthless. And to them that was an insult.”

The Ghanaian native was permitted one phone call. He chose to call his cousin, who worked in a department of the United Nations. “When my cousin was coming, he had a book that I had written, Indigenous African Institutions, which had my picture at the back of the book, and then showed them my picture. And he told them, ‘You know who you have put in the cell?’ And I think that sort of worked them up a bit.”

After about an hour of persuasion, Ayittey’s cousin was able to free him—and of course, by then, he’d missed his flight. But on one level, the police inspector was accurate; George Ayittey has been known for causing waves, whether it’s through his various conference appearances, his TED talk in 2007, his advocacy at high government levels in the U.S., and his books, including his highly influential Africa Unchained: The Blueprint for Africa’s Future.

In Africa Unchained, released in 2005, he concluded bluntly, “Africa is a mess—economically, politically and socially.” Pointing out how many intellectuals kept up the blame game over the colonial era, he ripped into figures such as Liberia’s Charles Taylor, writing, “The leadership in Africa is a despicable disgrace to black people. I won’t back down from these ‘harsh words’ because I am angry—very angry—and I am not alone in feeling this way

Ayittey makes a distinction between two groups he identifies as the “hippo generation” and the “cheetah generation.” Ayittey’s hippos are the corrupt, greedy leaders and complacent bureaucrats at the top of the food chain. The cheetahs are the young entrepreneurs in Africa who have the potential to court foreign investment and combat authoritarianism. They value the free market economy and want to re-introduce it to Africa to promote positive change.

The problems started for Africa, says Ayittey, after various countries gained their independence and introduced economic political systems that were alien. “After independence… we did not go back to build upon our own indigenous institutions. After independence, what we did was, we retained the authoritarian colonial state.”

Power lies at the centre of a regime like a pot of gold, provoking different groups to compete for a handful and exclude all other religious, social and political groups. “So it becomes something like an economic apartheid. If [you were] a member of the excluded group, what would you do? You pick up a gun and say, ‘Well, I’m going to remove them and put my group in power.’ Or you might say, ‘We don’t have guns, but we have legs, so we’re going to vote with our feet and go and move and settle somewhere else.’”

In fact, he argues, most of the civil wars in Africa were started by politically excluded groups—which means it’s the political system that’s at fault. For example, “In Rwanda in 1994, they refused to open up the political system, and that’s why the country blew up. Exactly the same thing happened in Ivory Coast. Power was monopolized by southern Christians. They didn’t want to open up the political system. And the northern Muslims rebelled. And that country blew up.”

Gods in the swamp

He concedes there have been some examples of inclusive systems. “Since South Africa saw the light and dismantled the apartheid system, okay. South Africa was saved because of that. Now South Africa is practicing the politics of inclusion.”

One way the African countries can adopt an inclusive system is through a confederacy, or “a sort of political system with a decentralization of power and devolution of authority.” He would also like to see nations introduce indigenous institutions, like a council of elders or village meetings.

Ayittey considers the most stable and democratic country on the continent today to be Botswana, where “cabinet ministers are required to go to these village meetings and put developing issues before the people. It’s called kgotla. I remember in 1993, the Botswana government wanted to drain the Okavango Swamp. And the minister of development went to a kgotla and put that issue before the people. I mean the minister was hammered by villagers. They said, ‘Why are you going to drain the swampland? You’re going to upset the gods that we have in the swamp.’”

And ultimately, the government decided not to drain it.

“When I read that in the newspapers, I said only in Botswana can this happen. It would never happen in Nigeria, because the government would just go and mow down these villagers who were opposing the project. In Botswana, you have a system of government which the people can relate to. And the people can participate.”

Ayittey says this should be the model upon which African countries base their governing systems. “They don’t have to go to Asia, they don’t have to go anywhere to copy any foreign model. They have the model right there in Africa. And it’s Botswana.”

So if the model of a functioning African country is actually in Africa, there’s the inevitable question of what the West can do to help (assuming it should help at all).

“The governments are the problem in Africa, they’re not the solution,” says Ayittey. “They are gangster regimes. How can the West call some of these governments partners in development?”

And he offers a reminder of Nigeria’s situation. “In Nigeria between 1970 and 2004, more than $450 billion in oil revenue flowed into the Nigerian government coffers. Now, of that money, they set up an economic financial crimes commission, and the chairman of that commission, I met him. And he said of that $450 billion in oil revenue, more than $410 [billion] was simply looted by Nigeria’s military rulers.”

In addition to working around corrupt governments, he says the West needs to appreciate that there’s a sequence that must be followed in order to create lasting change. “If you want to dismantle a controlled society and move into a free society, you need reforms in all kinds of areas. You need economic reform, political reform. You need intellectual reform to establish intellectual freedom.”

One persistent obstacle preventing reform: newspapers and broadcasting operations having their strings pulled by the powerful. “The West doesn’t have to reinvent the wheel. Africans themselves know what ails them. They do not have the opportunity to speak out. The only way they can speak out is through these government-controlled media stations. The best help that the West can give Africa is to get the media out of the hands of these corrupt and incompetent governments.”

Cheetah males and females

Ayittey also sees markets as a “part of Africa’s economic heritage” that benefits communities rather than individuals. “Let’s suppose you have something like $200,000, and you build a market, and you put stalls in them, and you rent out these stalls for market women,” says Ayittey. “If you went there and gave $100 to say, 200 market women, you know, they might be able to pay you back, but when you put up something like a market, a $200,000 market, you’re helping a whole community.”

But in order to bring a free market economy back to Africa, the cheetahs— those young, dynamic entrepreneurs and fresh leaders—need funding.

“There are many young Africans who consider themselves to be cheetahs. What I had wanted to do was to see if I could set up some kind of a network, a cheetah network. And I have about a hundred of them, but the main problem is, you know, getting a little bit of capital for them to get started.”

Ayittey considers the amount of money needed—between $10,000 and $50,000—mezzo capital rather than micro grade finance, since the loans would be based on economies of scale, benefitting the group rather than the individual. And to create that cheetah fund, Ayittey doesn’t want to approach the hippos or even target foreign aid dollars that could potentially be skimmed. Instead, he wants “African entrepreneurs, African business people to support these ideas.”

When they do step up, they’ll have their work cut out for them. Currently, those hippo-dominated African governments are dealing with many issues, not the least of which is growing debt, which is curtailing many economies. Countries that have been hardest hit by Ebola—Sierra Leone, Guinea and Liberia—are pushing for debt cancellation and international donations to help rebuild their economies.

And in April, it was announced that Ghana is aiming to issue another $1 billion Eurobond by the end of June as its economy continues to struggle.

Ayittey thinks, in general, it’s a good idea to forgive African debt, but he has stipulations. “In the past, African governments borrowed recklessly, and spent the money on economically unproductive investments and projects. So if you wipe the slate clean, if you don’t put a set of provisions on it, it will give them the incentive to borrow and waste the money again.”

First, he says, “You don’t want to forgive the debt to a country which is currently engulfed in civil war. Countries like Sudan and Uganda borrowed money to purchase what was [needed] to fight a civil war. Obviously this was unproductive.”

Second, debt relief should only go to countries that “at least have some democratic accountability. In the past, loans were taken without consulting the people about what the loans were going to be used for. So you want to make sure that when you give debt relief, you need to have some kind of accounting of what the loans and the past loans were used for.”

Which brings him back to the issue of an open media. “The freedom of expression and free media are important so that at least, you know, when those future loans are being squandered, the people can ask questions.”

It’s interesting and telling that Ayittey says when and not if the loans will be squandered, perhaps because he’s seen the cycle of rising leader turned villain so many times before. His is a guarded and pragmatic optimism, but it is optimism in the end. He has a vision, and he has an idea of how it can evolve into reality. Though his concept of the “cheetah generation” has been popularized over the past decade, he doesn’t believe they’re ready to govern.

“Right now I don’t want the cheetahs to go into the political arena, because they’ll just be chewed up by the hippos. Instead, they have to make their money, develop their capital and their experience in the business world first before they break out into the political world.”

Copyright 2015 Rogers Publishing Ltd. This article first appeared in the May 2015 edition of Corporate Risk Canada magazine