How can we avoid the ‘humiliation’ of going to the IMF in future?

It is immensely sad to see a proud  African country squirming before to the IMF.

Most of economists went to the same “Ivy League” colleges from which the IMF draws its personnel. So it is galling to see them being lectured to by IMF teams, about the need to balance budgets and ensure that their countries’ Debt/GDP ratios are in a healthy state. 

When IMF teams reiterate such truisms to our economists, they become irritated and wish to reply with sarcastic comments. But they can do nothing, except bow to the wishes of the IMF.  Even if they find the Fund’s comments “arrogant.” 

For, as a Ghanaian proverb says, “when your hand is in someone else’s mouth, you do not smack him on the  head!”  The reason is that if you smack him on the head, his mouth would automatically snap shut, and his sharp teeth would bite you painfully.

Institutions like the IMF cannot,  out of altruism, reverse their ”raison d’être”, which, is, in so many words, to discipline the borrower nations in developing countries, to restrict their expenditures so that they will have enough foreign exchange in their “balance of payments” systems, to service their debts to their (mainly) Western creditors..

 To earn enough foreign exchange to meet their local needs  AND service their international debts, developing countries must UNITE  and help create a new economic system, under which they will receive  fair prices for the goods (mainly raw materials at the moment) that they produce. 

That the current pricing system in world trade impoverishes, particularly, those of us in Africa is not under any doubt. What is evident, also, is that we lack either the gumption, or the guts, to fight politically to force the change. 

 African governments have, in the past, been short-sighted and self-centred to a degree that borders on stupidity. I must quickly point out that in the years immediately following  World War Two,  the oil producers in the Middle East also largely accepted the ”world price” of petroleum (as dictated by the “Seven Ugly Sisters” of the oil world) all based in Western countries.

But then, Sheikh Ahmed Yamani became Oil Minister in Saudi Arabia and Middle Eastern oil producers sprouted  teeth through an organisation called OPEC. And the rest is history.   

OPEC’s strength lay in its denunciation of the West’s trade stranglehold over the rest of the world, as murderous and immoral.  After the 1967 war, OPEC popularised the notion in the Middle East that the United States, in particular, enjoyed a luxurious lifestyle, based on cheap oil imported from the Middle East, to feed its factories and transportation system. 

Enriched by oil, the US  then used the taxes it obtained from its industrial production, to arm and strengthen Israel. Israel then  used its strength to fight against Arab countries and threaten the lives of Arabs.

Our governments, too,  are currently treating  the Western countries n in the polite, near-servile manner that used to characterise relations between the West and the Arab countries before 1967. Africans who know the true causes of their continent’s poverty must preach to the African masses to understand that  the West is a large part of their problem. 

We must show that we are not interested in such palliatives as aid, or the dubious “honour” of being recognised as  “highly indebted poor countries” [HIPC] reliant on charity.

We must instead demand economic justice. African countries must form “cartels” (lie OPEC)  that can levy, and put aside, money to acquire the means of each of them adding value to their raw materials before export. 

Goods that are processed can be held back from sale when prices are low. OPEC (and before OPEC) the giant oil companies) manifested their economic power through cartels. But you cannot form viable cartels using raw cocoa, coffee beans or tea leaves. Unlike oil, which can stay unspoilt underground, food commodities are perishable. We must find money to make our products imperishable. That’s the only way we can survive. 

We don’t, for instance, appreciate enough, the fact that , coffee is the second most important commodity traded in the world – yielding first place only to oil. So if Africa could bite significantly into that market, it could earn enormous sums. I daresay that the US company,  Starbucks, earns more from coffee than Ethiopia. Yet Ethiopia produces the best coffee in the world: so much so that Starbucks tried to copyright the name “Ethiopia” as a coffee brand owned by Starbucks!

 At present Africa is a “price taker”, and the value of its exports is determined not by their final price in western sales outlets, but by the initial price offered at the farm gate. Hence the insulting statement often made in Western publications that “Africa contributes less than 3% of world trade”. Were account to be taken of the actual volume of raw materials shipped to the West by Africa, plus the huge tonnages with which African products enrich western shipping companies, freight handlers and insurance brokers, it would be realised that the Western economies directly and indirectly such huge sums of money out of Africa’s resources.

We have woefully failed to fight our corner in terms of world trade. We have been fooled, in the past,  into becoming members of “alliances” of coffee and cocoa producers, and of “international organisations” ostensibly set up to “stabilise” commodity prices, but which also include, as members, the very consumers who have been cheating us!

No wonder all these organisations have failed in their self-appointed tasks. However,  Africa timorously shrinks from the next step: forming its own cartels to control the pricing of the commodities that constitute our exports.

We must end the stupidity NOW!

Ghana and the  Ivory Coast, must pool resources to produce chocolates for export, instead of concentrating on how to sell our raw cocoa beans. We must invite Nigeria, Equatorial Guinea and Cameroon to join us.

Kenya, Tanzania, Ethiopia and Uganda must similarly band together and maximise sales of processed coffee in Western supermarkets.

 Ghana and South Africa must cooperate to export gold jewellery, instead of gold bullion and bars. Sierra Leone, Ghana, Botswana and South Africa must buy technology to challenge the diamond polishers of Antwerp, Paris, Tel Aviv and New York.

If we don’t act fast, our children will grow up to mock as African perpetrators of slavery: slavery in a system of economic strangulation. Isn’t one system of slavery enough to shake us to action? Need we cultivate another?  

Before OPEC flexed its muscles in the 1960S  and 70s, petroleum was selling for under $3 a barrel. Today, it is selling for over  $100! Need one say more?

By Cameron Duodu

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