Opinion: Sankara’s warning on the odious debt lent to the continent… is relevant today

Sometimes we need an reminder, that some powers and some states doesn’t come with the best intentions or with a real helping hand. If it is the famous white elephants or the other giant aid initiatives that doesn’t amount to anything. However, what is now at stake is for instance a lot African states and their loans to China. The Chinese has collateral in either ports, state owned enterprises or ability to directly extract the needed resources the current state with huge loans has. This is their trap and Sankara warned about this, just like the French, British and Americans has done in the past too. Nothing new under the sun, just new methods to get ahead.

What I am quoting is a speech done to the OAU in 1987, just a few months before his assassination. Therefore, the words and warnings seems more important. As in our time, the leaders of today is recycling the ills of the past. They are doing it out of greed and in the end, the people and the citizens will suffer. Not the multi-national corporations, not the state itself, but the public whose disregarded and have to reinvent money.

The wise words of Sankara:

“We believe analysis of the debt should begin with its roots. The roots of the debt go back to the beginning of colonialism. Those who lent us the money were those who colonized us. They were the same people who ran our states and our economies. It was the colonizers who put Africa into debt to the financiers—their brothers and cousins. This debt has nothing to do with us. That’s why we cannot pay for it. The debt is another form of neocolonialism, one in which the colonialists have transformed themselves into technical assistants. Actually, it would be more accurate to say technical assassins. They’re the ones who advised us on sources of financing, on underwriters of loans. As if there were men whose loans are enough to create development in other people’s countries. These underwriters were recommended to us, suggested to us. They gave us enticing financial documents and presentations. We took on loans of fifty years, sixty years, and even longer. That is, we were led to commit our peoples for fifty years and more. The debt in its present form is a cleverly organized reconquest of Africa under which our growth and development are regulated by stages an norms totally alien to us. It is a reconquest that turns each of us into a financial slave—or just plain slave—of those who had the opportunity, the craftiness, the deceitfulness to invest funds in our countries that we are obliged to repay. Some tell us to pay the debt. This is not a moral question. Paying or not paying is not a question of so-called honor at all” (Thomas Sankara – Speech given at the African Unity Organisation Conference, Addis Ababa, July 29, 1987).

Let us not forgot the lessons of the past, as we in the present is continuing a cycle of recycling debt, growing debt and cycles of repayment schemes, which will only make the next generation suffer. If not, when the grace period hits and the state doesn’t have a big enough tax-base or revenue. It defaults and has to give away extraction licenses, state owned enterprises and other vital transport infrastructure like ports and airports. Because, that what is happening.

This is happening in our time. The world is looking, but nothing is getting done. Peace.

Kenya: Operational Update: KDF Engages and Successfully Destroys Al Shabaab Terrrorists’ Camp (10.04.2017)

Kenya: Operational Update – Destruction of Al Shabaab Bases in Baadhadhe District (27.03.2017)

Kenya: Potential U.S. Military sale to Kenya in support of the fight against terrorism (18.02.2017)

U.S. House Representatives wants to block the January Arms trade sold to the Kenyan Government!

“The arms trade – an intricate web of networks between the formal and shadow worlds, between government, commerce and criminality – often makes us poorer, not richer, less not more safe, and governed not in our own interests but for the benefit of a small, self-serving elite, seemingly above the law, protected by the secrecy of national security and accountable to no one.”

― Andrew Feinstein

As of today there two United States Representatives from the Republican Party Ted Budd of North Carolina and Duncan Duane Hunter from California that for their own reasons to stop sales of U.S. arms to Kenya, this they have forwarded a joint resolution. This was first from Ted Budd, but Duncan Hunter became his co-sponsor of the bill. Of today it has been transmitted to the Committee at the House Foreign Affairs that will work on it, before initial voting.

“That the issuance of a letter of offer with respect to any of the following proposed sales to the Government of Kenya (described in the certification Transmittal No. 16–79, sent to the Speaker of the House of Representatives and the chairman of the Committee on Foreign Relations of the Senate pursuant to section 36(b)(1) of the Arms Export Control Act (22 U.S.C. 2776(b)(1))) on January 19, 2017, is hereby prohibited:

(1) Twelve Air Tractor AT–802L.

(2) Two AT–504 trainer aircraft.

(3) Weapons package, technical support and program management” (Budd & Hunter, 2017).

It is not long ago since this was sanctioned to the Kenya Defense Force and their missions, as this was a supplement to the on-going missions that the Kenya contingent in Somalia and might even be used as blue-helmets inside South Sudan. Still, the U.S. Representatives think these will be misguided and not well used arms for their ally in East Africa. This is the double-standard and double moral from the U.S. counterparts that easily has dropped and sold this sort of weapons to others, but has to all of sudden sanction Kenya for buying the same thing.

Just take a look at the timing of the deal between the U.S. and Kenyan earlier in 2017:

“The US Defence Security Cooperation Agency (DSCA) notified Congress of the possible sale on 19 January and disclosed the potential sale on 23 January” (…) “The DSCA said Kenya had requested the sale of up to twelve Air Tractor AT-802L and two AT-504 trainer aircraft, weapons, technical support and programme management worth $418 million” (…) “This proposed sale contributes to the foreign policy and national security of the United States by improving the security of a strong regional partner who is a regional security leader undertaking critical operations against al-Shabaab and troop contributor to the African Union Mission in Somalia (AMISOM),” the DSCA said” (…) “The proposed sale provides a needed capability in the ongoing efforts to counter al-Shabaab. The platform maximizes the Kenyan Defense Force’s Close Air Support (CAS) ability because it is a short-field aircraft capable of using precision munitions and cost effective logistics and maintenance.” (DefenceWeb, 2017).

So a purchase accepted in January is now in question in February, as the new Trump Administration will not care for the allies and friends as such before. The DSCA sanctioned the sale on the 23^rd January 2017 and now on the 14^th February 2017 the U.S. Representatives questions the sale. So the AMISOM mission and their allies who fights in it doesn’t matter as much, as that was the destination for the arms and technical weaponry in this transaction. That the sales of close worth over $400m that suddenly goes into the wind!

We will see if the Foreign Affairs Committee at the House of Representatives will work with this and see if this will go for voting in the House or Senate to sufficiently go forward with joint communique of Ted Budd and Duncan Hunter. That then will become legislation as the deal will not happen as the Committee will put forward a motion or legislation that the stops the arms agreement and trade between the DSCA and the Government of Kenya. Therefore the U.S. Arms trade to the Kenyan Defense Force.

This story is certainly not over. Peace.

Reference:

DefenceWeb – ‘US approves possible Air Tractor, weapons sale to Kenya’ (24.01.2017) link: http://www.defenceweb.co.za/index.php?option=com_content&view=article&id=46563:us-approves-possible-air-tractor-weapons-sale-to-kenya&catid=35:Aerospace&Itemid=107

Representative Ted Budd (R-North Carolina) & Representative Duncan Duane Hunter (R-California) – ‘H.J.Res. 72: Relating to the disapproval of the proposed foreign military sale to the Government of Kenya of Air Tractor aircraft with weapons, and related support’ (14.02.2017)

Somalia: Operational Update – Kolibiyow (27.01.2017)

At UN debate, Kenyan Vice-President implores Security Council to take Somalia situation ‘seriously’ (21.09.2016)

21 September 2016 – Addressing the United Nations General Assembly, the Vice-President of Kenya today implored the UN Security Council to align the mandate of the African Union Mission in Somalia (AMISOM) to the threat levels in that neighbouring country, and to provide adequate, predictable funding and other support for the Mission.

“For the last two and half decades, the region has been seized with the situation in Somalia,” Vice-President William Ruto said. “Throughout this time, Kenya has stood with Somalia, provided a safe haven for refugees, joined peacekeeping missions, and invested resources in combating al-Shabaab and its affiliates.”

This solidarity has helped to substantially weaken the al-Shabaab militant group, liberated large swathes of land in Somalia and provided the space for its Government to begin the journey of rehabilitation and reconstruction, he explained.

On its part, Kenya has committed to $10 million in new funds to support the safe, dignified and orderly repatriation of the more than 400,000 Somali refugees in Kenya. “Sadly, the efforts of the region and Somalia’s neighbours have not been matched by the international community,” he stated.

Instead of supporting regional activities, the European Union this year cut support for AMISOM by 20 per cent. Despite repeated appeals, the UN Security Council has failed to provide adequate, predictable funding, as well as force multipliers for AMISOM.

“I once again implore members of the Security Council to take this matter seriously and align the mandate of AMISOM to the threat levels in Somalia on land, air and sea,” he said.

On South Sudan, Vice-President Ruto said that Kenya, as a guarantor of the 2005 comprehensive peace agreement and the 2015 Agreement on the Resolution of the Conflict, has been spearheading the search for sustainable peace, continues to invest significantly in efforts to build peace.

Echoing an earlier statement made by Ghana’s President, Mr. Ruto said that Africa accounted for only three per cent of global trade. Meanwhile, Africa’s population is set to surpass that of India and China combined by 2050. “Unless the trade imbalance is reversed as a matter of urgency, this will accentuate vulnerability, poverty, risk of insecurity and instability for both Africa and the rest of the world,” he said.

In the pursuit of sustainable solutions to global challenges, Kenya hosted the UN Environmental Assembly in May, the 14th session of the UN Conference on Trade and Development (UNCTAD) in July, and the Sixth Tokyo International Conference on African Development (TICAD VI) in August. Kenya will also host the second high-level meeting of the Global Partnership for Effective Development Cooperation in Nairobi later this year.

As the current chair of the UN Peacebuilding Commission, Kenya has been at the forefront of advocating for a new peacebuilding architecture for sustainable peace throughout the world, he said, drawing attention to a pledging conference Kenya will co-host later today to boost the Secretary-General’s Peacebuilding Fund.

“For us the message is clear: If we are ever to enjoy a peaceful world for all, we cannot invest any less in peacebuilding than we do in peacekeeping,” he said.

UN: Debt in Eastern Africa is rising Rapidly, but Remains Manageable (05.08.2016)

The UNCTAD report was presented as a starting point for a discussion organized in Kigali by the Sub-Regional Office for Eastern Africa of the UN Economic Commission for Africa (ECA). 

DAKAR, Senegal, August 5, 2016 – In Eastern Africa, debt stocks have risen rapidly over the past five years, but debt ratios appear to remain manageable, according to the UNCTAD Economic Development in Africa 2016 Report on  “Debt Dynamics and Development Finance in Africa” which was released in July in Nairobi during UNCTAD 14.

The UNCTAD report was presented as a starting point for a discussion organized in Kigali by the Sub-Regional Office for Eastern Africa of the UN Economic Commission for Africa (ECA), with Leonard Rugwabiza, the Chief Economist at the Rwanda Ministry of Finance and Economic Planning, acting as the discussant.

Andrew Mold, a senior economist from ECA, recalled that it is estimated that an additional 600 billion USD is needed in Africa every year until 2030 in order to achieve the Sustainable Development Goals. Progress towards achieving such ambitious levels of additional finance can only be achieved by relying more on domestic resource mobilization, he argued, particularly since the prospects for ODA are not especially encouraging.

To underpin this point, preliminary econometric research conducted by ECA and presented by Andrew Mold suggests that growth performance in Eastern Africa over the last three decades has been stronger when supported by higher domestic savings, rather than being financed from external sources (such as FDI, debt, or ODA).

Between 2011 and 2014, the annual growth rate of external debt in Eastern Africa has been higher (13.3%) than the average for Sub-Saharan Africa (9%), However, as a percentage of GNI, debt levels are still sustainable, with only two countries in the region (Burundi and Djibouti) currently being deemed at high risk of debt default, according to a recent evaluation of the joint World Bank–International Monetary Fund Debt Sustainability Framework.

In order to increase domestic resource mobilisation, Eastern African countries will also want to stem more effectively illicit financial flows, which currently account for a loss of around -6% of GDP in Africa, according to UNCTAD estimates.

Similarly, remittances and diaspora savings could be leveraged more to provide financial resources in the region, especially in Kenya and Uganda.

UNCTAD Warns on Debt, Says Africa Should Find New Ways to Finance Development

This year’s UNCTAD Economic Development in Africa Report 2016 finds that Africa’s external debt ratios appear manageable, but African governments must take action to prevent rapid debt growth from becoming a crisis, as experienced in the late 1980s and 1990s. 

NAIROBI, Kenya, July 21, 2016 – African governments should add new revenue sources to finance their development, such as remittances, public-private partnerships, and a clampdown on illicit financial flows, an UNCTAD report said on Thursday, warning that debt looks unsustainable in some countries.

This year’s UNCTAD Economic Development in Africa Report 2016 finds that Africa’s external debt ratios appear manageable, but African governments must take action to prevent rapid debt growth from becoming a crisis, as experienced in the late 1980s and 1990s.

“Borrowing can be an important part of improving the lives of African citizens,” UNCTAD Secretary-General Mukhisa Kituyi said. “But we must find a balance between the present and the future, because debt is dangerous when unsustainable.”

At least $600 billion will be needed each year to meet the Sustainable Development Goals in Africa, according to the report which is subtitled Debt Dynamics and Development Finance in Africa. This amount equates to roughly a third of countries’ gross national income. Official development aid and external debt are unlikely to cover these needs, the report finds.

A decade or so of strong growth has provided many countries with the opportunity to access international financial markets. Between 2006 and 2009, the average African country saw its external debt stock grow 7.8 percent per year, a figure that accelerates to 10 percent per year in the years 2011–2013 to reach $443 billion or 22 per cent of gross national income by 2013.

Several African countries have also borrowed heavily on domestic markets, the report finds. It provides specific examples and analyses of domestic debt in Ghana, Kenya, Nigeria, Tanzania, and Zambia. In some countries, domestic debt rose from an average 11 percent of GDP in 1995 to around 19 percent at the end of 2013, almost doubling in two decades.

“Many African countries have begun the move away from a dependence on official development aid, looking to achieve the Sustainable Development Goals with new and innovative sources of finance,” Dr. Kituyi said.

The report argues that African countries should look for complementary sources of revenue, including remittances, which have been growing rapidly, reaching $63.8 billion to Africa in 2014. The report discusses how remittances and diaspora savings can contribute to public and development finance.

Together with the global community, Africa must also tackle illicit financial flows; which can be as high as $50 billion per year. Between 1970 and 2008, Africa lost an estimated $854 billion in illicit financial flows, roughly equal to all official development assistance received by the continent in that time.

And while governments should be vigilant of the borrowing risks, public-private partnerships have also started to play a more prominent role in financing development. In Africa, public-private partnerships are being used especially to finance infrastructure. Of the 52 countries considered during the period 1990-2014, Nigeria tops the list with $37.9 billion of investment, followed by Morocco and South Africa.