Living through a Paradox

The lights have just gone off and I am now in battery mode on my computer. It is 7:30 at night, and the sounds of generators starting and humming now fill the night. I am in Ghana, which means the lights may or may not go on again tonight.
I find myself living through a paradox. Has Ghana not recently begun drilling for oil, one of Earth’s most prized energy sources? It produces 80,000 barrels of crude a day, pale in comparison to Nigeria’s 2.5 million barrels of daily output but certainly enough to keep the lights on in some parts of the country. Where is all of the oil going?

This is a problem which plagues all of sub-Saharan Africa, and an issue which most of the world – except the few benefitting from oil production in the region – is now very familiar with. Nigeria is the biggest basket case: despite producing 2.5 million barrels of oil per day, it is a net importer of fuel. Angola, with steel-fisted Dos Santos at the helm, is another puzzling case. How did the world sit back and ‘allow’ Luanda morph into an enclave of multimillion dollar housing complexes, US$300 meals, champagne and hummers? The two million barrels of crude produced in Angola each day further enriches Dos Santos and his cronies. Then we have the ‘lesser’ producers, such as Cameroon, Equatorial Guinea and Congo Brazzaville, each with its own corrupt leaders and greedy customers. In total, there is an average of 10 billion barrels of oil produced in Africa. But what benefits have come about from this production?

Going back to Ghana, the Ghana Oil Fund has, according to the World Bank, accumulated savings in the range of US$69.2 million. I do not dare estimate what the value of the oil extracted was that yielded this sum but regardless: there is little disputing that this is a substantial sum of money. So why not improve your capacity to generate electricity, to construct facilities capable of turning your rich, untapped reserves of oil into the electricity needed to transform your country into the developed nation your delusional Vision 2020 alleges you will become by the year 2020.

Make no mistake. The resource curse is alive and well in Ghana today.

Briefing: Fair Trade for Whom?

It appears that as an idea, Fair Trade mining has finally captured the consumers’ conscience. Through extensive lobbying, many of the organizations that make up the umbrella Fair Trade Labelling Organizations International (FLO) have successfully popularized this idea, painting the picture that the acquisition of so-called Fair Trade minerals is helping to lift some of the world’s poorest people out of poverty. But further analysis reveals an entirely different story.

Apart from gold mining – a discussion which I will leave for another day – perhaps the most intriguing cases in this context is coloured gemstones. How can Fair Trade schemes be launched for these high-value commodities, which only occur in a handful of countries? There are now a host of international players involved in the production, distribution and sale of coloured gemstones. At first glance, it would appear that implementing a superimposed system of Fair Trade in such instances would be an impossible feat. Closer investigation underscores just how difficult this can be.

Take, for example, the case of Nyala ruby, a much-coveted precious stone sourced from Malawi which the Washington State-based distributor Columbia Gemhouse has curiously – and potentially, prematurely – has labelled a ‘Fair Trade Gemstone’. This classification seems to have arisen on the basis of the organization knowing where the stones are being sourced from, and that production is taking place under certain conditions. But the message is very different on the ground. If we were to follow the model in place for agricultural commodities, it would mean that Columbia Gemhouse is partnering with impoverished small-scale gemstone operators, which is not the case. It is rather partnering with a series of ‘local’ businessmen (of Indian descent) who run a large-scale operation. During interviews, these men shared their own ideas about Fair Trade that were completely different from those of Columbia Gemhouse and small-scale miners.

The reality is that each of the different parties involved has a very different perception of what Fair Trade is. Research is ongoing to unpack each of these viewpoints further but in the meantime, the customer should not be told they are purchasing a commodity which could be the furthest thing from Fair Trade.

Restoring the Unrestorable

There is a ubiquity about rural Malawi that most travellers to sub-Saharan Africa would appreciate. In fact, I would say that it has a certain ambiance about it. It possesses all of the characteristics that the traveller has come to recognize as being quintessentially rural African: goats roaming freely; cattle herders directing their flocks on to roads, pretending to be unaware of the cars passing by in excess of 100 km/hr; and rural traders, stationed 50 feet apart, selling the same product – in this case, watermelons – for a three mile stretch. If one stops and thinks about why these various phenomena persist throughout rural sub-Saharan Africa, the answer is, I guess, simple: they are, in effect, products of evolution. They are what we identify as the very constituents of sub-Saharan Africa’s rural cultural fabric. These ‘sights’ have emerged from decades of political, economic and socio-cultural change.

When reflecting upon my travels to Sierra Leone and more recently, Liberia, I cannot help thinking about how rare such sights are. One rarely sees a goat running around in the rural stretches of both countries; the banana vendor, who is normally a regular sight, can never be found; and agricultural commerce is absent – at least to the naked eye. The reconstruction process has been painfully long in both countries, dependent upon the inflow of donor funds from a range of countries, including the UK, US, China and – until recently – Libya. Some recent highlights on this front include US$1.2 million being pledged to reconstruct the Liberia National Police, and US$62 million being awarded by the African Development Bank and the OPEC Fund for the reconstruction of three water stations in Sierra Leone. But as more infrastructural pieces fall into place, the absence of ubiquitous rural African images becomes all the more obvious.

We are all aware of how the reconstruction projects in Liberia, Sierra Leone and elsewhere in sub-Saharan Africa are the ‘operationalized’ visions of donors and donor governments. Sure, the taps will eventually come back on; the electricity may finally flow once again. But all of the money in the world cannot restore cultures – dolalrs cannot ‘recreate’ the circumstances that lead rural people to line up stalls of watermelons, 50 yards apart, for three mile stretches. Culture must evolve, typically over generations – it cannot be restored.

As paradoxical as it may sound, next time I travel to rural Liberia, I will certainly remember to pack fruit...

Appreciating no Concept of Time

A running joke in Africa is that most of its people have no concept of time. I vaguely remember organizing a focus group for my PhD, set for a specific time and date, and no one showing up. ‘They are not here because they are on “African Time”,’ my Ghanaian colleague laughed. ‘Go knock on the doors of their offices, and they’ll probably come in the afternoon.’ Sure enough, they did.

Sometimes I think our view of Africans’ perception of time extends – quite unfairly –to other somewhat unrelated situations. Take the Kenya Airways flight I took to Monrovia just over a week ago from Accra. The flight arrived late from Nairobi in Accra, was delayed further in Accra, and ended up arriving in Liberia really late. As we waited to be escorted off of the plane, one man – A Brit based in East Africa somewhere, I believe – decided to speak out loud, amongst other grumbling passengers. ‘This is the last time I take this bloody airline,' he said. ‘They leave when they want and arrive when they want. Next time, I’ll go through Brussels or Amsterdam.’ But would he say the same thing today? Because boy, what a difference a week can make.

On Saturday, my Kenya Airways return flight from Monrovia to Accra (where I am currently grounded), which left about two hours late, was completely full.

And there was no one complaining about it being late.

There was no one complaining about the typically-shocking food.

There was no one complaining about Kenya Airways as an airline.

In fact, everyone seemed happy to be in the air. Because a perpetually erupting volcano in Iceland, which has grounded European travel completely, has suddenly changed many people’s perception of the airline: it is a shining star, an airline that can do no wrong. One gentleman I spoke to, who was scheduled to travel through Brussels where he was supposed to transfer on to a connecting flight to Toronto, seemed quite upbeat about the Accra-Johannesburg-Dakar-Washington DC trip, a voyage which spanned three days, he had managed to sort out as an alternative. Countless others were no doubt jubilant over taking Kenya Airways in a southeasterly direction, further away from their North American destinations, into airspace unaffected by volcanic ash, to Nairobi, linking to South Africa, and finding their way back West. Every Kenya Airways flight not going to Europe is no doubt full with experimental travellers. Maybe people are flying from Nairobi to China and trying their luck getting on a flight to Vancouver or Seattle or LAX.

Who would have thought that travelling in Africa would be so coveted? Even those who believe that Africans have no concept of time are forced to admit, for the time being at least, that Kenya Airways is not only ‘The Pride of Africa’ but the envy of the airline world.

Managing Expectations

You can see it now. All of the NGOs applauding the Ghanaian Government’s move to double mineral royalties, from 3% to 6%, which should take effect this year. This is indeed something which is long overdue. It is no secret that African countries have achieved very little in the way of economic development through leasing their mineral-rich lands to international mining houses. The great disparity between the sector’s miniscule contributions to national GDPs and the value of the product they are exporting is testament of this. But the decision of the Ghanaian Government to do this now certainly raises eyebrows – or at least it should.

Of course, the move to change the royalty payment to 6%, though perhaps significant in practice, will entail only a slight amendment to extant legislation. At present, and as stipulated in the Mining Act, mining companies are required to pay between 3 and 6% as a royalty payment. As they are not charities, all pay 3%, with the exception of Newmont Ghana’s planned Akyem Mine, which, when it finally opens, will pay royalties in the range 3.25% as compensation for being situated in a – albeit contested – gazetted forest reserve.

But why make this amendment now, and not 10 years ago? Has it really taken the government this long to realize that the existing arrangement of 3% generates next to nothing economically for the country, or is it because of something else? It is certainly far more disadvantageous for the government to make such a change now than it would have been, say, a decade ago or even five years ago. All of mineralized sub-Saharan Africa has been partitioned to multinational companies in the past 10-15 years, and quite rapidly for that matter. Significantly, for Ghana, with gold, the principal mineral extracted in the country, being ubiquitous in the region, there is concern – or there at least should be – that, once the new mineral royalty rate takes effect, international mining houses will simply abandon their exploration activities and relocate elsewhere, such as Mozambique or Mali, where the investment climate is comparatively more attractive economically.

The claim made by the Ghanaian Government that the move to modify the mine royalty rate stems from its desire to ‘boost revenues from the sector’ is purely a facade: it certainly did not become enlightened about the implications of a 3% royalty rate overnight. It is rather, and quite worryingly, as result of an confidence, which seems to resonate in many branches of the government, about the perceived viability of other sectors of the economy. Notably, the Atta Mills NDC-led government is convinced that it will net something from what has become a debacle with Vodafone, which now holds a 70% stake in Ghana Telecom. It is working to unravel what it claims was an unlawful deal forged between the previous NPP government and the company. Some allege the deal was consummated rapidly before the 2008 elections in order to compensate for finances siphoned by the previous regime.

But the biggest reason why the government is exuberating confidence is the belief that the country’s economic woes will be resolved in record time, courtesy of revenues brought in from oil. Oil could indeed change the face of Ghana forever – for the better – but it would require the implementation of a comprehensive policy recipe that hitherto has failed to materialize in sub-Saharan Africa. Thus, the government’s continued belief that offshore drilling, which is scheduled to commence in late-2010, will catapult Ghana’s economy along a new development trajectory entirely is one concern. A more significant concern relates to what appears to be a belief that revenues from oil will be an instant cure-all – or, more specifically, the projection of this message on to an expectant public. The overhyping of oil discoveries in the local media has created great expectations in Ghana. Every one of its citizens will be paying close attention to how the current government manages oil revenues in the months to come. This could be serious because it has already created the impression that the economic benefits will be instantaneous.

NGOs and community groups, therefore, should view the adjusting of mineral royalties with some trepidation. Whilst ten years ago, such a move could have set an important precedent in sub-Saharan Africa, doing so today could prove fatal for the Ghanaian economy.

Child Labour in Ghana

This past week, at the second meeting of the International Working Group on Labour in Cocoa Farming, in Accra, Vice President John Dramani Mahama called for the US Department of Labour to remove Ghana’s cocoa from its list of goods produced by ‘child or forced labour’. Ghana’s cocoa regions have long been identified as ‘hotspots’ for child labour – that it is an industry comprised of children supposedly working in appalling conditions. The US Department of Labour has included Ghana’s cocoa on a list of 122 products from 58 countries on its Trafficking Victims Protection Reauthorization Act of 2005 (TVPRA List). ‘This is unacceptable and serves to undermine the efforts that we are making to address the issue of the worst forms of child labour as well as a disincentive for other countries to embark on any comprehensive effort,’ the Vice-President said. He continued by citing that the inclusion of Ghana and neighbouring Cote d’Ivoire on the list stemmed from the inability of stakeholders in the cocoa industry to agree on common indicators and benchmarks for measuring the impact of child labour.

On this issue, the Vice President may a point. People in the developed world, particularly those in the ivory tower, seem to have a distorted image of child labour in rural sub-Saharan Africa, seemingly unaware of the fine line between ‘child labour’ in the exploitative sense and children ‘going to farm’. We need look no further than Kanye West’s music video of ‘Diamonds are Forever’, which contains images of children being beaten whilst mining diamonds underground in Sierra Leone, despite the fact that there are no underground mines in that country, to realize how little Westerners know about the issue of child labour in sub-Saharan Africa. The suggestion made in Accra was exactly this: that the United States Government is completely unaware of the situation on the ground, drawing conclusions about situations it knows absolutely nothing about. Ironically, the Vice President is in no position to refute these claims because much like the US Government, he himself has not gone to the field to properly size up the situation. The Vice President’s claim, therefore, is about as reliable as the potentially-erroneous claims being made by the US Government.

But what is perhaps even more bizarre than two governments disputing over something they no absolutely nothing about is the idea of the United States Government actually accusing a country of trafficking individuals. After all, this is the only country, along with Somalia, that has not ratified The United Nations Convention on The Rights of the Child. Somalia can be given some reprieve here, given that it has not had a functional government since 1991 but what is the US’s excuse? Of course, ratification would mean cracking down on a series of US-based clothing companies, a long list of multinationals that include Walmart, GAP, Nike and Adidas, which, if reports are accurate, owe child labour for their hefty profit margins.

But have no fear: hope is on the horizon. Recently, US president Barack Obama described his country’s failure to ratify the UN Convention as ‘embarrassing’, and, much like the climate change issue, has promised to review it. Maybe when he does eventually get around to it, makes an eloquent speech from the White House, and organizes a conference in a world clothing capital like Paris or Milan, we should nominate him for another Nobel Prize.

Rewarding the Rewarded

Rumour has it that John Agyekum Kufuor, the former President of Ghana, is a virtual shoe-in for the much-coveted US$5 million Mo Ibrahim Prize for Achievement in African Leadership.

Mo Ibrahim, an African himself and self-made entrepreneur, established the foundation as a ‘carrot’ to discourage kleptocracy on the continent. It is awarded annually to a former African Head of State or government who demonstrates ‘excellence in African leadership’ – basically someone who ‘steps down’ come election time. It is a US$5 million prize awarded over ten years, with the potential for an extra US$200,000 annually for life thereafter. Whilst I share Dr Ibrahim’s passion and desire to eradicate corruption in Africa, I disagree completely with the idea of a financial reward for ‘good leadership’ in Africa and anywhere else for that matter. What next – a Rolls Royce for paying your phone bill?

But the award process underscores everything that is wrong with the approach taken to resolve the continent’s problems to date. It is hypocrisy of the highest proportions: on the one hand, condemnation of the continent’s leadership but on the other hand, a willingness to forge deals with its corrupt elite, in this case, rewarding corrupt leaders for doing the jobs they have been elected to do. We do not want to be seen interacting with the big and bad Mugabes and Obiangs of the world but because we want their countries’ resources, we formulate development action plans to extract coveted raw materials under pretexts of transparency and ‘good governance’.

We need look no further than Kufuor to put into perspective how wrong the Mo Ibrahim Award is. Here is a man who, in his eight years in office, sold Ghana Telecom to Vodafone, sold what little remained of the large-scale gold mining economy to foreign investors, and negotiated unfavorable oil contracts which the impotent, newly-elected NDC Government cannot possibly change anytime soon. The most significant achievements made under his watch were the construction of a shopping mall in Accra, right across from his house; the installation of several roundabouts in his hometown of Kumasi; and providing moral support for the Ghana National Team, on site, at the 2006 World Cup in Germany.

The point is that Kufuor is nothing more than the ordinary man, an unspectacular leader who was more interested in accumulating air miles by travelling outside of his country. So why is going to be given US$5 million – for stepping down at the end of his rule? Rewarding people like Kufuor for doing virtually nothing almost concedes that we have given up on tackling corruption in Africa, and have accepted that the high-ranking people in the region who do their jobs are anomalous and should therefore be rewarded because, well, they do what they are supposed to do.

But I guess there is no reason to get upset over Kufuor having done nothing to get this US$5 million. After all, Barrack Obama was awarded a Nobel Peace Prize for doing little more than winning an election and assembling a handful a fairly-engaging speeches…