6
Back to Africa
The irony with the world today is that the richest nations aren't always the ones with the most resources while the poorest nations have untapped wealth beyond their imaginations.
With vast swabs of land and ocean left undiscovered, Africa holds 30% of the world's minerals, including 40% of the world's gold, 90% of the world's chromium and platinum, 8% of natural gas, and 12% of oil reserves of the world, in addition to holding the largest reserves of cobalt (a key metal for batteries and smartphones), diamonds, and uranium on the earth, and enormous concentrations of tantalum, iron, titanium, zinc, copper, gypsum, salt, sulfur, and phosphates.
In 2019 alone, 1 billion tons of minerals worth US$406 billion were reportedly produced by the continent, or 5.5% of the world's produced minerals.
That same year, other parts of the world produced way more than what Africa put out, with Asia producing 9.1 billion tons of minerals, North America producing 3.1 billion tons, and Europe producing 2.72 billion tons. Developed nations are depleting their natural resources at an alarming rate as Africa supports their energy needs, but due to its low consumption, Africa still has a long way to go before its tank runs dry, while some developed nations are already on the brink of depleting their natural resources.
Source: Statista / https://www.statista.com/chart/26371/african-countries-with-the-highest-gdp-over-time/ last accessed December 08, 2022 / CC BY‐ND 3.0.
Despite the centuries of bloodshed on its grounds from wars, slavery, colonialism, and apartheid, land in Africa remains fertile – 65% of the world's arable land and 10% of the planet's renewable freshwater are located on the continent. If African soil becomes unfruitful one day, the world will starve.
Perhaps this is a fitting testament to the birthplace of mankind, where there is more genetic diversity than anywhere else on earth. Genetic diversity is a good thing to have when new viruses emerge. The more genetic diversity a population has, the more prevalent gene variants are, which help people to adapt better to new climates, diets, and diseases.
Collecting human DNA samples from around the world since the late 1980s, geneticists have traced back the maternal heritage of mankind to a common ancestor from Africa, dubbed Mitochondrial Eve, adding substance to the “Out of Africa” theory that came from similar studies of genetics, supporting the claim that early humans migrated from the continent, hence confining their genetic pool to smaller groups.
The potential to unlock the puzzles and origins of how we got here has led many scientists to Africa to study not only local genetics for the advancement of medicine, but the biodiversity and medical benefits of plants as well. Probable cures for a host of illnesses have been discovered in Africa, including flora that have proven in studies to alleviate substance addiction, the effects of cancer, and even COVID‐19.
The wealth of natural resources has historically made Africa a target for foreign powers who continue to strongarm heavily sanctioned nations into trading their resources freely and cheaply instead of selling at world‐market prices. Through monetary imperialism, it is estimated that France receives about US$500 billion annually from their former colonies in Africa, according to African Union ambassador Dr. Arikana Chihombori Quao.
In addition to the trade trap ensnaring Africa, the continent loses an estimated US$195 billion of legitimate capital annually to illicit financial flows, illegal mining and logging, wildlife poaching and trafficking, unregulated fishing, and other forms of corruption enabled by Western‐backed, African dictators, according to the UN.1
However, as numerous economic journals have pointed out, all of this is changing. In 2019, the IMF projected that 5 out of 10 of the world's fastest growing economies were in Africa, as measured by their GDP growth.2
Foreign powers may see the wealth of Africa buried deep underground, but the continent's greatest asset is its youth – all 200 million of them, aged 15–24 – who are set to witness the birth of a new Africa that will be finally independent from foreign manipulation.
Not only is Africa home to the largest population of young people in the world, it also has the fastest growing youth population in the world, with 60% of its population under the age of 25, and more than a third between 15 and 34 years old.3
While youth populations in other parts of the developed world are decreasing, Africa is the only region in the world that is expected to see more young people in the coming years. Forecasts predict that by 2050, the sub‐Saharan African youth population (under age 25) will increase by nearly 50%, in contrast to youth population decline in South Asia (–41%) and Western Europe and North America (–6%).
As for aging dictators, they are dropping like flies. Recent years have seen the deaths of authoritarian leaders who had to flee Africa out of fear of being caught and executed by the people.
Spending their final years in exile, former leaders such as Zimbabwe's Robert Mugabe who died in Singapore at the age of 95 in 2019, Angola's José Eduardo dos Santos who died in Barcelona in 2022, and Chadian dictator Hissène Habré who died of COVID‐19 in Senegal in 2021, represent the last pages of brutal military‐regime reign.
With a list of crimes against humanity that has been described as “endless,” remaining dictators are either exiled, on the run, or struggling to hold onto power as youth‐led protest movements galvanize and overthrow political dinosaurs across the region. Young people taking to the streets in protest has culminated in the downfalls of long‐term rulers such as presidents Zine El Abidine Ben Ali, Muhammad Hosni El Sayed Mubarak, Blaise Compaoré, Abdoulaye Wade, and Bashir, respectively. In the Democratic Republic of the Congo (DRC) and Burundi, the youth demonstrated against proposals for constitutional amendments to extend presidential term limits. In South Africa, students protested against an increase in university fees and used the hashtag #FeesMustFall that caused their plight to trend on social media. Meanwhile, protests against austerity measures and the high cost of living in Sudan that broke out in 2018 ultimately led to President Bashir's exit.
Now, in the face of a new, politically independent Africa, how do the foreign powers that once had a grip on its land, resources, and people, feel about it?
Following strained relations with Ghana after the nation stood up against Europe's exploitation of African cocoa through regulated trade, France, the sole foreign power of influence left in Africa, is trying to maintain relations with the few living dictators even as the tides of change are washing up upon the coast.
Earlier this year, French President Emmanuel Macron made an official trip to Cameroon, Central Africa's biggest economy, to develop agricultural ties and secure food distribution in view of the war in Ukraine disrupting supply routes.
“France doesn't organize transitions of power either in Cameroon or any other country,” Macron's Africa advisor, Franck Paris said in a press statement. “Rather, our role is to maintain close ties with our interlocutors.”
With more than 40% of the population living in poverty and in need of humanitarian assistance against renewed conflicts with Islamic terrorist organization Boko Haram in neighboring Nigeria, and a recently signed military agreement with Russia, Cameroon does not seem to be in a position to be cutting deals with France. Yet the French have their ally in President Paul Biya who has served in office since 1982, making him the second‐longest‐ruling president in Africa, the oldest head of state in Africa, and the longest‐ruling non‐royal leader in the world.
Macron scrambling to meet African leaders today is in contrast to his attitude when he was just elected as president of France.
At a press conference at the G20 Summit in Hamburg in 2017, when asked by a journalist from Ivory Coast about the Marshall Plan for Africa, Macron said that Africa has “civilizational” problems and part of the challenge was that African nations “still have seven to eight children per woman.” His words prompted critics to question if France's prolonged “honeymoon” in Africa was over.
Source: African Development Bank / https://www.icafrica.org/fileadmin/documents/Publications/AEO_2019-EN.pdf / last accessed December 08, 2022.
Having a large youth population, former dictators dying or exiled, and less foreign influence on trade is a good thing for a region so torn by exploitation; however, that alone does not guarantee clear victory or change.
South Africa, the most resource‐abundant nation in Africa, has a working population of 40 million of which more than half (51.6%) are young people (15–34 years) as polled by the Quarterly Labor Force Survey in the first quarter of 2022, but the youth unemployment rate in the country went through the roof in 2020 at 59.6%.4
The future may be bright for Africa but at the moment progress is still stifled by France (and to a larger extent, Europe) that controls the financial systems of 14 African nations and imposes regulations on trade that only benefits their interest and hinders the cross‐border transactions direly needed by the young people who are part of the big industry.
We are Family? We are Françafrique
Almost all of Africa has been colonized by Europe at one or another point in history. Though its land has been ravaged for much longer, the period known as New Imperialism from 1881 to 1914 witnessed seven Western European powers – France, Britain, Portugal, Spain, Germany, Italy, and Belgium – embarking on what was called the “Scramble for Africa.” To put it bluntly, it was a race to rape the continent of its resources and enslave its denizens.
Britain had nearly 30% of Africa under its control, while France took 15%, Portugal took 11%, Germany had 9%, while 7% and 1% of the region were held by Belgium and Italy. Nigeria, at the time, had 15 million subjects – more than in the whole of French West Africa or the entire German colonial empire.
The Scramble for Africa, also known as the Partition or Conquest of Africa, resulted in invasion, annexation, division, and colonization, of which the effects are still felt today.
After World War II, Europe was in bad shape and could barely keep the accounts contributing to their own economies in balance, let alone their colonies. Fed up with centuries of systemic racism and ill‐treatment, the colonies of these powers began to seek independence and challenge their masters' authority.
Devastated by the Nazi occupation and later, wars in Indochina (1946–1954) and Algeria (1954–1962), France worried about losing its power in Africa. French politicians began to build relations with what remained of their colonies in the continent.
In September 1958, France President Charles de Gaulle, recognizing that African states had legitimate demands for independence, organized a referendum to decide the fate of its colonies. De Gaulle promised them independence on the condition that they went through a period of political learning in the French Community, an organization encompassing France and its colonies.
States that voted “yes” would join the French Community and embark on their journey to independence, which would be granted once France had decided they were ready. A “no” vote would mean immediate independence. However, de Gaulle also warned that states voting “no” would commit “secession,” and that France would withdraw financial, military, and material aid to them.
All states voted “yes” except for Guinea, which gained independence the following month. Other states became independent almost two years later, but these states were not given true freedom like Guinea that was led by President Ahmed Sékou Touré, a trade unionist who was not a French loyalist nor educated in France. Other nations were granted independence on the condition of signing “cooperation agreements.”
Through their ruthless logic of support for dictators, rigged elections, political crimes and corruption, and French military intervention, the government and subsequent presidents of France have continued their twisted vision of Françafrique – a term used by African and French politicians to romanticize their close political ties that was first introduced in 1955 by President Félix Houphouët‐Boigny of Ivory Coast.
Originally called France‐Afrique to denote the informal, family‐like relationship between France and its former colonies, the term was renamed to Françafrique by François‐Xavier Verschave and was used as the title of his 1998 book, La Françafrique: le plus long scandale de la République, which criticizes France's dominance of Africa.
Known as one of the founders of French NGO Survie (“Survival”) that fights hunger and corruption in developing nations, Verschave repurposed the expression to name and denounce the many concealed bonds between France and Africa. He defined Françafrique as “the secret criminality in the upper echelons of French politics and economy, where a kind of underground Republic is hidden from view.”
There is a pun in Verschave's Françafrique that lends a shade of poetic justice, sounding like “France à fric” which means “a source of cash for France.”
It was a conscious decision with the pun as Verschave noted that, “Over the course of four decades, hundreds of thousands of euros misappropriated from debt, aid, oil, cocoa… or drained through French importing monopolies, have financed French political‐business networks (all of them offshoots of the main neo‐Gaullist network), shareholders' dividends, the secret services' major operations and mercenary expeditions.”
Today, France has the largest military presence in Africa of any former colonial power but the influence of China and Russia, as well as the presence of a majority of youths wanting change, is gradually revealing Françafrique for what it truly is – an agreement between powers without the consent of the people to use a currency that indebted nations.
The Last Colonial Currency
Former French president Jacques Chirac acknowledged that, “Without Africa, France will slide down into the rank of a third [world] power.” In a retributory statement, he said, “We have to be honest and acknowledge that a big part of the money in our banks comes precisely from the exploitation of the African continent.”
France has continued its colonization of Africa through an imperial monetary policy that involved the implementation of a currency that is minted and managed by the Bank of France in Chamalières.
The CFA franc (Franc of the Financial Community of Africa) is used as a currency by 14 countries in sub‐Saharan Africa, divided into two derivative monetary unions presiding over two sub‐regions. The Central African CFA franc is governed by the Central African Economic and Monetary Union while the West African CFA franc comes under purview of the West African Monetary Union.
When former French colonies were granted sovereignty to rule their own nations, monetary systems were needed. In exchange for the stability of being backed by the franc at the time, in 1945, the CFA franc was invented for these new nations whereby in return, they would have to deposit 50% of their foreign exchange reserves to the French Treasury. The Wall Street Journal dedicated a feature on the CFA franc calling it “monetary colonialism.”
The 14 countries that use CFA franc – Cameroon, Central African Republic, Chad, Republic of the Congo, Equatorial Guinea, Gabon, Benin, Burkina Faso, Côte d'Ivoire, Guinea‐Bissau, Mali, Niger, Senegal, and Togo – continued to vest their foreign exchange reserves with the French Central Bank years after declaring independence from France. This system was supposed to guarantee convertibility of the CFA franc with other currencies but ultimately became another currency, like the CFP franc in French Polynesia, that created economic dependency and bounded former colonies to France. It also meant that these nations had to pay France for storing their money.
This post‐colonial free‐meal system was hushed from the general public with France putting a spin on the exploitation to make it look like Paris had the region's best interests at heart. Both French and African politicians were dissuaded from commenting about the CFA franc unless they wanted to face repercussions.
When Guinea issued its own national currency in 1960, France sent secret agents into the country on a sabotage mission to destabilize the monetary flow by flooding the economy with fake banknotes, disrupting businesses and the livelihoods of the people. Many citizens and establishments of Guinea went bankrupt in the process. People took their lives.
The irony is that while the CFA franc system has been forcing African central banks to deposit large sums of their foreign reserves into the French treasury since 1945, the amounts deposited equal to double the amount of aid, or as the France government refers to it, “help” that is given back by Africa.
Now pegged to the Euro, Africa's monetary and trade problems are exacerbated by an expanded financial system for a whole continent. Trade and relations with other nations in the European Union are tied to France's capitalization of Africa, hence, Europe's deafening silence on atrocities as recent as the 2011 massacre in Côte d'Ivoire – a result of French intervention in the politics of the country.
The CFA franc has to be sustained by a sufficient level of foreign exchange reserves by Africa, which creates a vicious cycle of borrowing for the nations that are unable to make enough income through trade. It is insane that any nation would need to borrow money to sustain the peg of their own currency.
The African Union?
After decades of criticism, attempts were made to ditch the colonial relic that gives France monopoly of Africa's shipping, exports, and imports.
After the formation of the European Union, there were talks among African leaders which concluded in the idea of the eco – a single common currency that would replace the CFA franc in West Africa, benefitting these economies in terms of trade and investment flows, political stability, and an intercontinentally shared agreement and roadmap.
The idea was first brought up in 2003 by leaders of the 15‐member Economic Community of West African States (ECOWAS) but has since been repeatedly postponed due to a lack of consensus between French‐loyalists and independent state leaders in addition to the complexities of varying economies. Despite the eco's formal introduction, the concept of an African monetary union had been discussed for 30 years, with economic‐driver Nigeria spearheading the movement.
On 29 June 2019 in Nigeria's capital, Abuja, ECOWAS finally came to an agreement on the implementation of the eco. The ECOWAS Central Bank was to be set up and tasked with managing the currency, modeled on a federal system, with a joint institution to guide the other central banks in the union. It would be gradually implemented with a convergence criteria, countries that did not meet the criteria could come in later when their economies had stabilized.
It seemed for a moment that because of the changing times and overwhelming number of youth voters, France's avenue of control by placing puppet leaders and supporting dictators was narrowing.
A few months later, however, Ivorian President Alassane Ouattara with French President Emmanuel Macron announced in the capital of Côte d'Ivoire, Abidjan, that eight members of ECOWAS had decided to reform the CFA franc and change its name to the eco by 2020.
The public were shocked at the revising of the plan which now stated that the eco must be built around the eight West African CFA franc zone states and pegged to the euro at a fixed exchange rate and guaranteed by France.
Nigeria, with a population of 200 million and an economy that makes 70% of the region's GDP, was supposed to be ECOWAS' financial anchor, much like how Germany is in the EU now.
Nevertheless, even in its current proposition, the eco is expected to bring about positive changes. French representatives no longer having seats on the board of the Central Bank of West African States and the removal of the obligatory 50% deposit of foreign exchange reserves into the French Treasury are clear signs of improvement.
These wins after the eco's implementation are only for West Africa, and not Central Africa, which still has no plans to move away from the CFA franc. But the main issue remains unresolved.
ECOWAS central banks will still have to report to France daily to ensure the “convertibility guarantee,” the promise that France will finance the needs of West African states by lending Euro.
The eco is now proposed to be launched in 2027 after the pandemic derailed its 2020 target when some African states called for help, asking for up to US$100 billion in international aid to restart their economies.
Africa's cycle of debt will not end until an independent financial system is created.
The Last Digital Frontier
Hair and hairstyles are culturally relevant in Africa. First ladies and celebrities fly in the top freelance hairdressers regularly from around the region just so they can look the part. Hairstylists are just some of the tradespeople who are in high demand in Africa. However, cross‐continent jobs used to be only available when high‐profile clients who could pull strings were involved. The rest of the mobile labor force had to overcome limited local markets due to sanctions restricting business across borders. But African laborers have found ways around these draconian laws and today about 75% of informal cross‐border trade in West Africa is not reflected in official statistics, which show that only 14.4% of total African exports are traded intercontinentally according to the UN Conference on Trade and Development as of December 2021,5 the lowest globally.
According to the 2016 World Bank Group report titled “From Hair Stylists and Teachers to Accountants and Doctors – The Unexplored Potential of Trade in Services in Africa,” the continent's export potential in traditional services, such as tourism, is clearly recognized, but the vibrant emergence of new, cross‐border, informal‐ and knowledge‐based services are often overlooked.
Accounting, architectural, engineering, and legal firms from countries in the Common Market for Eastern and Southern Africa (COMESA) are already engaged in exports, mainly to neighboring countries. Hospitals are treating foreign patients and are using tele‐medicine. From hairdressing, construction, and housekeeping to education, health, and finance, cross‐border services seem to be flourishing, albeit unnoticed by those outside of Africa.
Helped by facilitators and fixers to provide their services in a foreign country, tradespeople pay a fee to operate in a larger market. But when you have everyone from the girl‐next‐door to top modeling agencies booking your skills, it's a small price to fork out for enterprising individuals.
For these young freelancers, export earnings are often their main source of income. In the World Bank report, 38‐year‐old Zambia‐based Congolese hairdresser Helene says, “This is the only way I earn an income. I have been able to take care of my family.”
Importing services improves productivity through increased competition, better technologies, and access to foreign capital, but the obstacles that hinder trade diversification are still prevalent – domestic regulatory hurdles and trade barriers increase the cost of transactions. Restrictions on tele‐medicine and e‐learning, the non‐portability of health insurance, and expensive visa and work permits are decelerating the growth of Africa's job market and poverty reduction efforts.
Another reality is that, unlike most of the developed world that has automated teller machines on every street corner, many in Africa lack access to formal financial services – the nearest bank is sometimes miles away in the next district.
Bridging the gap, the availability of affordable smartphones and the internet has connected otherwise economically isolated nations to one another. Young people, being natural adopters of technology, have discovered other methods of conducting their businesses and running transactions. Among them is using cryptocurrency to bypass barriers to trade or sanctions.
Nigeria had the second highest cryptocurrency trade volume, and second only to the United States in Bitcoin trading, before the government banned cryptocurrency due to its anonymity and supposed lack of traceability.
In 2020, Nigerians traded over US$400 million on local cryptocurrency exchanges. Despite the prohibition of crypto that came later, and six Nigerian banks being fined for breaking the regulations, blockchain research company Chainalysis reported that the dollar volume of cryptocurrency received by users in Nigeria in May 2022 increased to US$2.4 billion from US$684 million in December 2021. The true amount of crypto held and traded in Africa is also much larger, with many trades untraceable by analysts.
During the EndSars demonstrations against police brutality, Feminist Coalition, a Nigerian non‐profit organization, managed to secure funds for protest groups after the government suspended their bank accounts. They did this through cryptocurrency, raising US$150 000 for the cause.
Some eight months after the banning of crypto, the Nigerian government announced the coming of the eNaira, the country's very own Central Bank Digital Currencies (CBDCs). Launched on 25 October 2021 by President Muhammad Buhari, with the slogan “Same Naira, More Possibilities,” the eNaira brought hope of economic inclusion and ease of cross‐border transactions amid skepticism that it was controlled by the central bank that would be privy to its customers' data. Developed by the fintech company, Bitt Inc., based in the Caribbeans, it was among the first CBDC projects to launch following the Bahamian sand dollar and China's digital renminbi.
Today, at least 10 countries have CBDCs, including DCash from the Caribbeans and JamDex from Jamaica, and at least 80 countries are working on digital currencies that operate on distributed ledger technology, also known as blockchain.
Though CBDCs have their critics, who focus on the lack of user privacy from the government and stability relying on GDP as with fiat money, research shows that CBDCs helps facilitate the flow of cash, eases informal cross‐border trade and tax collection, and enables international remittances and direct welfare distributions while increasing inclusivity in rural areas where banks are unavailable.
Unlike paper money issued by central banks, CBDCs are designed to be one‐way. Depositing it in the bank will not generate interest. Rather, its use is to expand the economy and facilitate trade.
The eNaira, for example, operates through a user's eNaira speed wallet that is downloaded from app stores. Pegged at 1:1 with the naira and recognized as official tender in Nigeria, everyone from individuals to businesses to government agencies can easily adopt the new currency after registering their Know Your Customer (KYC) details and connecting to their traditional bank accounts. It is convertible into other nations' currencies as long as they recognize the naira.
Roughly 38 million Nigerians are currently excluded from the financial system. The country's central bank has set a target of 95% adult financial inclusion by 2024. With its central bank empowered to credit the account of any eNaira speed wallet user either directly or through partner financial institutions, the target seems achievable. This would not be possible if everyone had to go through a regional or district bank.
The high‐speed and high‐security feature of CBDCs makes them the choice for informal and international remittances, where transaction costs were reported at 9.3% in Africa as opposed to the 7% average globally.
As oil prices rise, Nigeria is hoping that the introduction of its eNaira would be a catalyst to boost export revenue, hence, adding to its foreign reserves and causing a domino effect across the continent that will once and for all end Africa's reliance on the foreign monetary system enslaving it.
While this might look like the ultimate win for Africa, people need alternatives to CBDCs, whether in the form of cryptocurrencies or stablecoins, to protect themselves if governments turn against them, as illustrated with Feminist Coalition during EndSars, and when sanctions prohibit trade with partners across nations, which is pretty often considering the continent's history. The alternatives to CBDCs will flourish in tandem to the proliferation of CBDCs. You just can't have one without the other; ingenuity will bypass bans.
Africans are entering a new era and the timing has never been riper as the old guard passes and foreign powers grapple with their own demise.
Resilient and wiser from the misfortunes of the past, equipped with technology, knowledge, and awareness of the economic might of their land, the scale of power is about to be tipped, and the world better watch out.