Thursday, March 23, 2006

Dark and light in Africa

At the risk of sounding simplistic, there were two contrasting stories about Africa which caught my eye in this week's Economist. One, the good news, was about the recent elections in Benin; the other, yet more problems besetting Zimbabwe.

Benin is a small, very poor country, formerly one of France's colonies, sandwiched between Togo and Nigeria. As such, it's a somewhat surprising example of democracy in West Africa. The president has reached the age limit set by the constitution and has said that he will retire. This contrasts wonderfully with most of Africa's so-called democratically elected presidents, who would rather extend the age limit than step down. The elections have been largely fair, and turnout for the first and second rounds was 70% and 67% respectively; which puts the UK to shame. I visited Benin two years ago - the port and city of Cotonou, on the Atlantic coast - for work: we were only there for a couple of days, but the restaurants were good and the people friendly. And the weather was better than in Abidjan!

Unfortunately, Zimbabwe seems to be going from crisis to crisis. The Economist reported this week that inflation is over 700%, foreign currency earnings are coming largely from mining, and imports (even of such necessities as sanitary towels) are severely disrupted. The government had attempted to regain its IMF borrowing rights again by paying back some $9million, but the IMF has still not lifted its currency embargo. Foreign currency earnings are thus coming almost exclusively from mining. Zimbabwe has very large platinum deposits (not on the scale of its neighbour, South Africa, but still large); platinum is rising in price; and there are several international companies who want to invest huge sums of money to extract the stuff.
But the government plan to nationalise their mines, taking 51% of the profits from such operations, and yet unable to provide 51% of the investment needed. Mines have warned that this extension to the Mines and Mining Act could cause the collapse of the country's mining industry, and lead to yet more misery for a country whose economy is already on the brink of collapse. World leaders seem reluctant to interfere with Zimbabwe's government, and to be fair, it's unlikely that all of its problems can be laid at Mugabe's door, but you do wonder how on earth the Zimbabweans can keep going under such conditions. Its educated professionals are leaving, which of course accelerates the problems. Something needs to be sorted out, if only the will is there, from within the country.


At Fri Mar 24, 11:46:00 am, Blogger Who is this Dave? said...

Just hope our politicians don't decide to invade to sort out their problems for them.

At Mon Mar 27, 06:23:00 pm, Blogger Tamburlaine said...

I can see Zimbabwe sliding into an unholy mess because no-one seems to have the political will to do anything about it. African, not Western, leaders should be putting pressure on Mugabe, and perhaps the IMF and World Bank need to ease off a bit.

But then, what do I know about economics?


Post a Comment

<< Home