body-container-line-1
Sat, 25 Apr 2015 Feature Article

The Kaberuka Economic Theory: GDP is Not Food on the Table

The Kaberuka Economic Theory: GDP is Not Food on the Table
LISTEN

By the way, why has no Ghanaian put his name forward as a possible candidate to replace Donald Kaberuka, the outgoing President of the African Development Bank? I thought we have some quality professionals here who would do very well on the job. The NPP’s Dr. Mahamudu Bawumia could do a great job as the next President of the ADB. We have had accomplished Ghanaian professionals at the top positions of ADB before. Trade Minister Ekwow Spio-Garbrah was the ADB’s communications boss years ago, and we understand he did a great job profiling the organisation and giving it a competitive presence in the international financial community.

Besides Bawumia, we have other solid professionals here who have accumulated great skills and competencies to do a fine job. Mr. Boakye Agyarko, a former Vice President of the Bank of New York, is a fine professional. How about Ken Ofori Attah of Data Bank? There are many quality Ghanaians doing very well in Fortune 500 organisations in America and Europe. Occasionally you hear their names and you are proud that your countryman or woman has survived stiff competition in a foreign land and triumphed over institutional barricades and racial discrimination to make a mark of distinction. We have quality human resources both at home and abroad. Nigeria, La Cote D’voire, Tunisia and other African countries have some excellent professionals who have what it takes to turn the fortunes of countries around. Yet, our people are poor.

African economics works in a very interesting way. We are tied to the apron strings of international financial institutions who dictate policies and progammes that come with lots if conditions. Those policies are implemented as part of party manifesto agenda, where propaganda is deployed to trump up the good sides of the programmes. To make it look even better, we make a good case for our GDPs and project an economy that is doing well. What does a great GDP mean to the poor person who lives in a deprived village where there is no electricity, good educational infrastructure or decent employment? This is the sad picture Kaberuka wants his successor to change.

The Rwandan economist, who has been at the helm at ADB for a decade, recently questioned the work of financial institutions and the GDP countries usually trumpet around. He asked “Does this reach the ordinary citizen in our countries? Not simply. A taxi driver says: “Well, I can’t east the GDP.” He challenges the next leader of the prominent financial institution to prioritise “inclusion and broad based growth”, adding that the test of a nation is not how many millionaires you have, is how many millions of people you lift from poverty into the middle class.” With millions of Africans living in very poor conditions, Kaberuka has spoken for most of the world’s poor who are denied development opportunities despite millions of donor aid pouring into their countries.

Yet Africa is not as poor we as we think. Again, Kaberuka provides a penetrating insight to explain the inequalities and unequal distribution of resources: “Each time I land in an African country, I count the number of private jets and I think, what could be the origin of this wealth? It’s unlikely to be enterprise or innovation.” This is the greatest danger facing Africa’s poor: There is a wide development gap between rich and poor Africans than there is between Africa and the developed world. Our middle class exists only in name; we have the rich who can afford to buy anything in foreign currency and the poor who struggle and work hard to sustain a poor and miserable existence.

Kaberuka’s solution is simple: ADB and other powerful institutions must focus on Africa’s poor. Our interventions must necessarily focus on how we can ensure that the people of Kwame Brentim in the Brong Ahafo region and Bugubelle in the Sissala District of the Upper West region would be able to live with some dignity. The irony is that poor people work harder than the rich, tilling the womb of the earth to plant low yielding crops or walking hundreds of miles to play a poor trade. They put in so much and get so little in return. Yet many economic policies and development pacts are designed with Africa’s poor in mind. How do they get to them? This is Kaberuka’s worry.

Perhaps, Africa is just not lucky. The recent Ebola scourge alone cost us some $3.2 billion, according to Kaberuka. Natural disasters continue to plague us, whittling away meagre resources and plunging them deeper into the abyss of deprivation and misery. Capital flight costs Africa so much in terms of development and taxes. We have almost lost everything to corruption and mismanagement of limited resources. It is difficult to imagine a people who lack everything in the midst of plenty. We have remained sedated on hope for so long. When cometh the hour of redemption?

In 30 years, what will Africa look like? That is easy? Go behind 30 years and compare what we had with what we have now. That may be a good basis to assess our development potential and what we are likely to accomplish in 30 years. Has the condition of the poor improved very much? Whenever I visit the place I grew up 40 years ago, I have some fond but worrying memories. The public toilet is exactly where it was when I was a boy. The playground has not changed. Maame Obolo, the big woman who sold yam by the roadside is still selling at the same spot. Her kids who were my contemporaries are doing well as taxi drivers and electricians. The town hasn’t changed much, except a few houses by the roadside which have been turned into stores. One of them is manned by an old man whose chemical shop is older than my mother. What does he care about GDP? Like Kaberuka, he cannot eat it, even if it is very big. The poor man is not keen on belonging to a middle class or any other class. He just wants food on his table. The economists can keep their GDP.

Kwesi Tawiah-Benjamin
[email protected]

body-container-line