19/02/2016

The advocates argued that since no region of the world has ever been developed by foreign aid, however generous, it is time for Africa to be allowed to grow its economy by earning its keep, instead of continuing to rely on foreign donations or assistance.

The new battle-cry: Trade and not Aid

Available empirical evidence alone support this position. While Westerner politicians and commentators like to bandy fanciful, self-generated positive statistics about the conditions in Africa, the fact remains that more Africans continue to sink into deeper and deeper poverty. The much touted economic growth has benefitted very few individuals and has resulted in yawning gap between the rich and the poor. South Africa is said to be the most unequal country in the world.

While Western economists roll out impressive macro-economic figures that show that Africa as the fastest growing region in the world, the stark, abject poverty one sees on the streets of Africa belittle the impressive GNP and GDP figures orthodox economists like to dazzle us with.

Many Africans have found their voices and have started to question the whole aid thesis. Their main point is that western policies towards Africa, either by design or by accident, is self-defeating.

Example, whereas, on the one hand western governments like to point out how generous their aid to Africa is, and how it is helping to ensure macro-economic stability, policies imposed by Western-institutions, like the World Bank and the IMF, simply wiped out all the macro-economic gains, when it comes to the micro level that directly impact the lives of ordinary people.

Let us consider the agricultural sector as an example.

Many African countries rely almost exclusively on the exports of raw materials, with most of them depending on mono-crops for their sustenance. Since the prices of these products are determined beyond their borders, they have no say in setting the prices. What happened is that these poor countries are dealt a double-whammy whenever the prices of these products collapse on the world market. A recent example is in Zambia, where the president resort to asking citizens to pray for their currency which sank due to the collapse of the country’s main income earner – Copper.

These wretchedly poor countries have little recourse except to borrow. It happens that most of those willing to lend money demand a clean bill of health from the IMF. Among the stringent conditionality the IMF imposed in its austerity package was for these countries to liberalize their agriculture and industrial sectors, and open them to competition from more advanced economies. The result is that cheap imports from Western nations simply flood local markets with cheap industrial products, and wipe out the nascent industries of the poor countries. Consequences include more debt, a steep rise in inflation and in unemployment figures.

The same thing happened to African farmers who suddenly have to compete with super cheap imports from Western farmers, who enjoy all forms of subsidies and support from their home government.

This is how the president of Ghana put it

On 23rd November, 2015 President John Dramani Mahama of Ghana, speaking in Accra at the launch of the Made in Ghana (MiG) Campaign and Logo, disclosed that his country spent 1.5 billion dollars in foreign currency on imports of rice, sugar, fish, tomato and basic cooking oil in 2014 alone. The president lamented: “if this money had been retained and spent in Ghana it would have gone into the pockets of Ghanaian entrepreneurs which would subsequently remain here to boost the economy.”

The president pointed out that Ghana has comparative advantage in the availability of vast arable lands and favourable climate, and would want his compatriots to consume “what we produce and produce what we consume,” and reminded them that: “as we “buy Ghana”, we “build Ghana” together.

Speaking earlier at a National Farmers Day celebrations, the president admonished citizens: "If we eat what we grow, it will create jobs in Ghana. If all of us will begin to make a point to begin to eat Ghana products, we will create more jobs in this country and there will no problem of youth unemployment because we can expand agriculture and make incomes better for our people all over the country

The president went further to praise the health benefits of local Ghanaian foods: "Because our foods are natural and fresh... Indeed in developed countries they are looking for the kinds of food that we eat now. They call them organic foods and they pay a higher price for those foods than what they grow themselves...and eating what we grow will promote economic growth. It will save Ghana $1.5 billion on imported food products." 

The president continued his theme when he opens the 38th Governing Council meeting of the International Fund for Agricultural Development, IFAD in February, he called on governments to boldly refuse donor support for Agricultural programmes that do not serve the interest of the rural farmer.

Sadly, although the president of Ghana correctly analyzed the problem and appeared to know the solution, he is severely handicapped as Ghana remain one country firmly under the tutelage of the IMF.

The President of the Ghana National Poultry Farmers Association, Victor Oppong-Agyei, put things in better perspectives when he explained the dwindling fortunes poultry farmers in Ghana. According to him 70 per cent of chicken in the country are imported which cost Ghana 350 million dollars each year. The reason is simple: Imported poultry products are almost 100 per cent cheaper than what local farmers offer. He said: “Imported broilers are cheaper than what we produce. Imported frozen chicken was 10 Cedis a Kilo but has been reduced to 7 Cedis a Kilo, while the locally produced stands at 12 Cedis.”

Mr. Oppong-Agyei would like the Ghanaian government to put in place policies that will strengthen local farmers against foreign farmers, who are heavily supported by their governments. He mentioned the unabated influx of frozen chicken, the high cost of production, lack of financial support and of modern technologies, as some of the problems plaguing the country’s poultry industry.

He stated that the current domestic broiler production represents only 5 percent of broiler chicken consumption in the country, “and should the government walk the talk to boost local production to about 40 percent, about 60 million birds, as promised there will be massive job opportunities and other economic benefits. An industry that has a huge potential to aid the desired transformation of our economy could soon grind to a halt. Poultry is a key economic element in some countries like the USA, where it employs about 1.3 million people and generated close to US$469billion in 2014. It’s now crucial for us to change the status quo in this country so as to save the sinking poultry industry.”

During a debate in Accra on the topic “Is Importing Chicken Good for Ghana?” held in August, 2011, Ghanaian farmers blamed their government for their plight and accused authorities of letting the poultry industry down.

The farmers argued that the country seems to be clueless about how to save the industry. They mentioned past promises governments made to help farmers acquire equipment. They accused the government of neglecting its pledge to help poultry farmers increase production to meet the domestic demand by the year 2012.

The poultry farmers grumbled that there was a time that parliament passed a law to increase taxes on the importation of frozen chicken but that law was never implemented due to pressures from the International Monetary Fund (IMF).

“They are taking us for granted and they seem to be getting away with that,” one poultry farmer said.

The winner of the 2007 National Best Farmer award, Alhaji Abdul Salaam Akate, complained that the current situation does not favour local farmers. He expressed the fear that more farmers will quit unless the government intervene. “Clearly if you listen to the discussions, you can say that there is crisis in the poultry industry. The cost of borrowing in very high for farmers. In the olden days, we used to have something like an agricultural loan and the interest rate was good, but this is no longer the case and the challenges are many.”