AFRICA DEFINE YOURSELF: AS AFRICANS IN AFRICA AND IN DIASPORAS WE NEED TO BEGIN TO QUESTION AND CHALLENGE ANY COLONIALITY THAT SEEK TO ESPOUSE WHITE SUPREMACY AND BLACK SUBJUGATION THROUGH USE OF COLONIAL PRINT AND/OR ELECTRONIC MEDIA By Senzo Scholar Coloniality tends to criticize everything that good done by the Africans especially in countries where the ruling party is made of more 80% native people. A case in point is South Africa, some white people are not happy that the black government is doing much better than either the apartheid and colonial government in running and managing the South African economy. They always desperately look for something negative to say. A classic example is Ms Claire Bisseker of financial mail newspaper, who in her article dated 24 July 2014, entitled “BRICS BANK: Costly club to belong to” Out of her professional jealous and suffering from sour grapes syndrome, she is alleging that South Africa doesn’t deserve to be a member of BRICS. Her exact words were - “SA PULLED off a diplomatic coup when it was invited to join the Bric grouping in 2010 since it in no way deserved to be in a club with some of the fastest-growing emerging markets in the world, given its economic performance, either then or now.” It should be highlighted that the BRICS has no criteria that only the fastest growing emerging economies or markets in the world should be the members of BRICS. I wish to also point out that to Ms Claire Bisseker, that being a journalist for Financial Mail Magazine and Newspaper doesn’t make you an authority in determining who and who should not be a member of BRICS. As a doomsayer Ms Claire Bisseker goes on aver that - “The Brics’ New Development Bank (NDB) is either going to be the best thing that ever happened to SA, accelerating infrastructure development at home and in the region to the benefit of private SA companies, or it is going to be a R100bn drain on the country’s foreign reserves that might even weaken SA’s credit rating.” It is expected that any colonial and imperial newspaper would not write anything positive about strategic moves of an African state government led by Africans, because this is against the whole existence and mission of ‘white supremacy and black subjugation’. Any prudent and reasonable pan Africanist would not expect a white journalist working for a colonially owned newspaper to sing praises for excellent political manifestation of any African state. South Africa is the richest economy in Africa, soon to be overtaken by Nigeria, and if it wasn’t for the colonial and imperial Scramble for Africa’s Resources, South Africa’s GDP would be 3 to 4 times, what it is now. The western beneficiation of raw diamonds, gold, and other natural resources sourced from South Africa is the major reason why South Africa GDP is almost a quarter of what it out to be. If South Africa was to stop exporting raw materials and nationalise all banks, the economy would 4 time its current GDP. She quoted the Chief Executive Officer of Pan-African Capital Holdings CE Iraj Abedian, who considers the NDB - a Mickey Mouse political gesture with no prospect of making any real impact on the sliding growth of Brics countries. It will take three to five years just to get the bank operational and its size, at $100bn, is insignificant in relation to the GDP of Brics countries. “ She quoted Iraj Abedian to substantiate her thesis that “the Brics have not tried to downplay the fact that the creation of the NDB is a political gesture designed to send a message to the West that the balance of economic power has shifted and the developing world will no longer be denied a seat at the top table.” As a doomsayer who is angry that BRICS is offering African countries and alternative source of finance that will not be accompanied by ridiculous and nonsensical terms and conditions She is bitter that Africa will be freed from colonial and imperial funding which advance, espouse and sustain white supremacy and black subjugation. She is angry due to the fact that US or any colonial and imperial government will not be able to use IMF and World Bank to control and reduce black population by demanding that gay marriages should be allowed if an African states needs financial aid from international donors and financiers such as IMF and World Bank. I fully concur with But Tutwa Consulting director Peter Draper who doesn’t buy this argument, and dismiss it by saying that - It may be the case that the conditions under which funds will be lent may initially be more lenient than those of the World Bank, but I suspect that once the rubber hits the road and these countries’ tax money is on the line, their finance ministers will respond accordingly by tightening conditions,” he says. In an effort to sustain her thesis that South Africa should prioritize national sovereign and economic interest, she quotes Frontier Advisory CEO Martyn Davies, who said - “SA needs to move away from the altruistic idea that the Brics bank should be used to develop infrastructure in other African countries rather than directly in SA, when it is SA taxpayers’ money that is being put on the line.” This is a soft accentuating and espousing colonial and imperial capitalist selfish tendencies, of wanting to screw Africa instead of helping Africa for self-enterprising interests. I think BRICS New Development Bank (NBD) is what Africa needs, instead of Africa being compelled to seek funding from colonial and imperial multilateral finance institutions such as IMF and Wold Bank, who are designed to advance colonial and imperial Scramble for Africa’s resources. The full story as per the article of Ms Claire Bisseker, is attached hereunder, and sourced from [financialmail.co.za/features/2014/07/24/brics-bank-costly-club-to-belong-to] BRICS BANK: Costly club to belong to SA expected to benefit from deepening trade and investment relations with the four dynamic Bric nations (Brazil, Russia, India and China), enabling it to diversify its trading partners away from stuttering industrialised economies. This has happened to some extent, but it is only with the announcement in Brazil last week that the Brics will be launching its own US$50bn development bank and $100bn credit line facility that SA can lay claim to tangible results. The Brics’ New Development Bank (NDB) is either going to be the best thing that ever happened to SA, accelerating infrastructure development at home and in the region to the benefit of private SA companies, or it is going to be a R100bn drain on the country’s foreign reserves that might even weaken SA’s credit rating. Colin Coleman, the head of Goldman Sachs in sub-Saharan Africa, thinks that SA, as the smallest Brics economy, stands to gain the highest return since it is highly likely that a significant portion of the infrastructure projects funded by the bank will be in Africa. This is so not only because Africa is relatively undeveloped but also because the development of African economies is strategically important to the Brics members, especially as a source of raw materials. If this bank has the institutional capacity to get things done it is a very different proposition from the Development Bank of Southern Africa or the African Development Bank (AfDB) financing locally arranged projects,” says Coleman. It implies the strategic co-operation and mobilisation of capacity from state-owned enterprises and the financial and corporate sectors in the Brics countries. This could have a very significant impact on African development.” Africa has infrastructure investment needs of about $100bn/year, half of which are unfunded. This unfunded gap is constraining Africa’s GDP growth by as much as 2% in some countries, according to AfDB chief economist and vice-president Mthuli Ncube. He is strongly in favour of the NDB, which he sees as a development partner that could help the AfDB to close this gap. At the opposite extreme is Pan-African Capital Holdings CE Iraj Abedian, who considers the NDB a Mickey Mouse political gesture with no prospect of making any real impact on the sliding growth of Brics countries. It will take three to five years just to get the bank operational and its size, at $100bn, is insignificant in relation to the GDP of Brics countries, he avers. The Brics have not tried to downplay the fact that the creation of the NDB is a political gesture designed to send a message to the West that the balance of economic power has shifted and the developing world will no longer be denied a seat at the top table. The NDB will provide developing countries with an alternative source of capital to the International Monetary Fund and the World Bank, dominated as they are by the US, which has failed since 2010 to ratify reforms that would give greater voice to developing nations in these institutions. The expectation is that NDB financing will come with fewer conditions attached than IMF or World Bank funding, whose structural adjustment requirements have long been a source of tension with the developing world. But Tutwa Consulting director Peter Draper doesn’t buy this argument. It may be the case that the conditions under which funds will be lent may initially be more lenient than those of the World Bank, but I suspect that once the rubber hits the road and these countries’ tax money is on the line, their finance ministers will respond accordingly by tightening conditions,” he says. SA lost out to Shanghai in its bid to have the bank headquartered in Johannesburg, but perhaps this is not such a bad thing. Financially and managerially, the Chinese are the most capable of running a Brics-focused bank that funds large infrastructure projects,” says Frontier Advisory CEO Martyn Davies. Nobody does developmental finance as well as the Chinese.” But for SA to get the most out of the bank he feels there are two things that must change. The first is to ensure that not only SA parastatals but also SA’s private construction and engineering firms benefit from NDB projects in Africa, as opposed to Chinese, Indian or Brazilian ones. He points out that SA is the only Brics country that doesn’t align its development finance to benefit its private sector. I can’t imagine China’s Development Bank or BNDES [Brazil’s development bank] financing projects abroad using taxpayers’ money and not using the projects to benefit their private companies,” he says. In SA there’s a disconnect, a low-trust political economy, an unwillingness to act as Team SA.” Second, he argues that SA needs to move away from the altruistic idea that the Brics bank should be used to develop infrastructure in other African countries rather than directly in SA, when it is SA taxpayers’ money that is being put on the line. While funding infrastructure in SA’s close neighbours might have direct spinoffs for SA, doing so in far-flung countries would have a minimal benefit, he says. The big worry for Abedian is that SA is way too poor to be a bank partner. The NDB will have subscribed capital of $50bn. Each of the five Brics member countries will have an equal shareholding to match their individual contributions of $10bn (roughly R100bn each). The World Bank had capital in June last year of $223bn. In addition, the Brics have established a $100bn Contingent Reserve Arrangement (CRA), to act as a financial safety net to address short-term balance of payments or liquidity crises that member countries may face. The CRA is a virtual pool of members’ foreign reserves to be called on only in time of need. China will make available $41bn, Brazil, Russia and India $18bn each and SA $5bn. The agreement allows China to seek assistance up to a maximum of $20bn; Brazil, Russia and India up to $18bn each; and SA up to $10bn. The CRA complements a similar facility operated by the IMF but which, at $850bn, is over eight times larger. Abedian fears that setting aside R100bn or roughly 20% of SA’s foreign exchange reserves to capitalise the NDB, not to mention the contingent liabilities that SA would assume as a bank shareholder, could put SA’s credit rating at risk. However, Standard & Poor’s (S&P) MD for sub-Saharan African and SA, Konrad Reuss, says SA’s participation in the NDB will initially have no direct rating implications since it will take time for the bank to build up its loan book and for rating agencies to work out the contingent liability it presents to its shareholders. On the other hand, he confirms that S&P looks at unencumbered foreign exchange reserves when measuring a country’s external liquidity, so it would be forced to net out any illiquid or fully committed reserves from any future analysis of SA’s position. “[The level of SA’s reserves] is not one of SA’s strong points, so committing a certain portion of SA’s reserves wouldn’t strengthen SA’s external liquidity ratios, but a lot remains to be seen in the detail,” he says. For now we wouldn’t see a direct ratings implication.” Some economists have argued that by giving SA access to a $10bn credit facility to stabilise its currency during a crisis, the CRA could place a valuable floor under the rand. While such a facility is a nice-to-have, Reuss doesn’t believe it would be a game-changer from a ratings perspective since SA’s problem has never been lack of access to capital markets. In the event of a crisis, the facility would provide a short-term way of patching things up but it would be no substitute for real political action to address underlying problems,” he says. For Sanlam economist Jac Laubscher, SA’s capital contribution to the new bank will be worthwhile if it gives SA access to substantial amounts of preferential funding at lower interest rates or with fewer conditions than it has now. For example, if the bank was prepared to invest in Eskom, it would give SA a much bigger asset base from which to capitalise the embattled parastatal. But the most important thing will be whether the five Brics countries can work together. The NDB is likely to be pulled in a number of different geographic directions and be in constant danger of becoming hamstrung by politics and bureaucracy. It isn’t going to be easy to translate geopolitical will into effective delivery. Even more so for a group of countries that have little more in common than their desire to thumb their noses at the West. As pan Africans in Africa and in Diasporas we need to challenge any advancement of coloniality which seek to undermine any strategic progress or contribution by any African state to the liberation of Africa from colonial and imperial economic raping. Aluta Continua!!
Posted on: Tue, 29 Jul 2014 13:20:00 +0000
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