Aliko Dangote lunches with the FT

This is Pilling in the FT:

As a rule, I don’t get worked up over oil refineries. But the one gradually taking form on 2,500 hectares of swampland outside Lagos, Nigeria’s Mad Max commercial capital, is so big, so audacious and so potentially transformative that it is like Africa’s Moon landing and its Panama Canal — a Pyramids of Giza for the industrial age.

If Aliko Dangote, the billionaire businessman behind what even he calls his “crazy” $12bn project, can pull it off, he will go down as the continent’s John D Rockefeller, Andrew Carnegie and Andrew Mellon combined. And once he’s built it, he intends to treat himself to a small indulgence: he’ll buy Arsenal, his favourite football club.

The whole thing is worth reading. Dangote is a fascinating individual with a very interesting life story (are there any bios out there?) This paragraph caught my attention:

There is not enough industrial gas in the whole country to weld everything together, so Dangote will build his own industrial gas plant. There aren’t enough trucks, so he’s producing those in a joint venture with a Chinese company. The plant will need 480 megawatts of power, about one-tenth of the total that electricity-starved Nigeria can muster. You guessed it. Dangote is building his own power plant too.

Why is Mugabe Still in Power?

Zoe Samudzi provides some excellent answers to the question of why President Robert Mugabe has had such staying power despite the many political and economic upheavals that have beset Zimbawe since the late 1990s.

Here is an excerpt:

Throughout the course of his thirty-six years in office, President Robert Mugabe has used coercion and violence to clear the Zimbabwean political arena of opposition and dissent and consolidate his political power. He has singularly blamed the deteriorating economy on western sanctions rather than responsibly attributing it also to his own inadequate planning, mismanagement of both capital and resources, his allowance of economic liberalisation and structural adjustment, and political corruption. Yet, contrary to the singularly critical narratives that tend to dominate, he enjoys some earnest support beyond what western reports about stolen elections indicate.

Also:

Most critically, the land issue – an issue of indigenous sovereignty, and perhaps the most unifying politic of Black resistance to colonial rule – went unaddressed. President Mugabe’s refusal to resign or allow regime change is justified, in part, by an idea that the revolution was stalled, and there must be consistent leadership in its continuity. It is no mistake that the ongoing process of land repossession and reform is characterised as the Third Chimurenga, and it is no accident that such vehement western critique has been levelled at state policy (genuine or otherwise) seeking to regain land sovereignty.

Remember that around independence in 1980 some 6,000 European immigrants, nearly all of whom defended the apartheid-lite (Southern) Rhodesian regime, owned 42% of Zimbabwe. Given the importance of land in an agrarian economy such as Zimbabwe’s, this was always going to be a politically untenable situation — regardless of the race of the landowners. Zimbabwe was on a path to significant land redistribution, one way or another.

So why didn’t Zimbabwe deal with the land question before independence in 1980?

Screen Shot 2017-02-10 at 7.45.33 AM.pngThe answer has to do with the the relative political power of the European settler community, especially after UDI. Since 1923 the group had enjoyed effective self-government with significant autonomy from London. And it is precisely because of their political power that Zimbabwe never had a “Swynnerton Plan” akin to what happened in Kenya in response to the Mau Mau anti-colonial insurgency.

Zimbabwe’s landowners failed to appreciate the need to make deals when they had the (political) upper hand. And by so doing set themselves up for very costly reforms/expropriations thirty years hence.

Why they made this choice is an interesting and open question.

Perhaps they trusted that Zimbabwe would continue to rely on Western aid in a manner that would have incentivized property rights protection by the government (under the threat of aid cuts and sanctions). They may have also thought that the government would not be crazy enough to jeopardize its commercial farming sector and risk total economic collapse. Another reason might have been the comfort of knowing that any land reform efforts in Zimbabwe would elicit reaction from South Africa (then under apartheid) in defense of property rights.

Apartheid, of course, ended in 1994. And the first two considerations did not stop President Robert Mugabe, at great cost to Zimbabweans of all stripes.

Given the complicated history of Zimbabwe and the wider anti-colonial struggle in eastern and southern Africa, I expect Mugabe’s legacy to be sanitized as soon as he passes on, especially outside of Zimbabwe.

 

 

When Markets Discipline Politics

President Jacob Zuma continues to be in conflict with his own Finance Minister, Pravin Gordham, over fiscal policy (and propriety in the management of public finances). The markets trust the latter. The former has more power, including the coercive apparatus of South Africa’s administrative state. Having just presided over a disastrous outing for the ruling ANC in this month’s municipal elections, Zuma needs to create more policy wiggle room for his floundering administration. And Gordham’s commitment to fiscal discipline stands in the way. So far the markets’ reaction to Zuma’s machinations at the Finance Ministry have managed to discipline intra-ANC elite politics. But as Zuma gets closer to retirement (or being forced out) it is unclear how much he is willing to continue humoring the markets…

The revelation on Tuesday that Gordham may be forced out via (likely dubious) charges of improper conduct while he served as head of the South African Revenue Service sent the rand tumbling, again.

This is the third time the police unit, known as the Hawks, have questioned Gordhan. Earlier this year, just days before he was set to deliver a crucial budget speech, the Hawks demanded Gordhan answer written questions. Then in May, rumors of Gordhan’s imminent arrest sent the currency tumbling, just as ratings agencies were assessing South Africa. Gordhan was not arrested then, and went on lead South Africa’s recent economic recovery, assuring international investors of the country’s stability.

Screen Shot 2016-08-24 at 11.13.59 AMAnalysts believe Gordhan is the target of president Jacob Zuma and his political allies. The two are reported to be at loggerheads over the management of South Africa’s state-owned enterprises, especially the national carrier South African Airways. Gordhan’s office has delayed bailing out the embattled carrier until a new board is appointed (effectively removing those close to Zuma, according to reports). Gordhan’s office has also curbed spending on plans to build a new nuclear power plant.

Earlier this week, a cabinet briefing announced that Zuma himself would now directly oversee state-owned companies. Analysts say the move allows Zuma to maintain political power and protect his interests after historic losses in this month’s local government elections. Zuma’s office has denied that there is a rift between the president and the finance minister. According to reports, Gordhan is determined to resist pressure to resign

For more on this visit Quartz Africa:

Penpals: Karl Marx and Abraham Lincoln

I just came across this fascinating letter that Karl Marx wrote to Abraham Lincoln, following the latter’s re-election in 1864.

We congratulate the American people upon your re-election by a large majority. If resistance to the Slave Power was the reserved watchword of your first election, the triumphant war cry of your re-election is Death to Slavery. From the commencement of the titanic American strife the workingmen of Europe felt instinctively that the star-spangled banner carried the destiny of their class. The contest for the territories which opened the dire epopee, was it not to decide whether the virgin soil of immense tracts should be wedded to the labor of the emigrant or prostituted by the tramp of the slave driver?

… The workingmen of Europe feel sure that, as the American War of Independence initiated a new era of ascendancy for the middle class, so the American Antislavery War will do for the working classes. They consider it an earnest of the epoch to come that it fell to the lot of Abraham Lincoln, the single-minded son of the working class, to lead his country through the matchless struggle for the rescue of an enchained race and the reconstruction of a social world.

On a related note, my girlfriend and I recently watched Lincoln while on a short work/fun trip to Ghana (posts on Ghana coming soon). The controversies over the historical accuracy of parts of the film aside, Lincoln is a must-watch. The movie does a brilliant job of portraying the complexities that inhabit all humans – good or bad, or somewhere in-between.

The abolitionists in 19th century America were no altar boys. Their triumph against slavery was also a triumph against parts of themselves.

Another interesting thing about the movie is how Obama-esque the Lincoln in the movie is, or it might be that Obama has read so much Lincoln that he emulates the man from Illinois. The truth is probably a mix of both. It is almost impossible to imagine that the first black president would have no influence on the production of a movie about the president who signed into law an act abolishing slavery.

Go watch Lincoln.

And Django Unchained which is also awesome – but which I had to finish watching alone at the hotel because of a skype appointment with my adviser (and the Tarantino violence which in the end was too much for my girlfriend).

An infinitely more sophisticated review of the two films (Django Unchained and Lincoln) by a scholar of their subject matter can be found here.

On technology, governance and development

By now many of you have perhaps seen the takedowns of TED talks (see here, highly recommended), which some think have become rather pedestrian (I still find most TED talks insightful, just for the record).

The pushback against the belief among some disciples of TED talks that technology is the answer to all of humanity’s problems (whether this depiction is accurate or not) also speaks to the issues of governance and development. As Shea, the Journal’s blogger points out:

……. Morozov also detects, besides superficiality, a distinctively TED-style attitude toward politics in which institutions and democratic debate are derided and technology is looked to as a deus ex machina that will solve such once-intractable problems as poverty and illiteracy—obviating those pesky voters and squabbling elected leaders.

The global “development sector” has recently seen a wave of tech-inspired attempts to accelerate development by bypassing politics and other socio-cultural inhibitors, with little success (development economists are also implicated here). The lesson that many have missed is that bad governance and underdevelopment are not primarily technical problems that can be fixed by experts. Many have fallen to the temptation of thinking that,

…. technology is an autonomous force with its own logic that does not bend under the wicked pressure of politics or capitalism or tribalism; all that we humans can do is find a way to harness its logic for our own purposes. Technology is the magic wand that lifts nations from poverty, cures diseases, redistributes power, and promises immortality to the human race.

The characterization of governance and development as purely technical risks abstracting too much away from the human beings that development is supposed to help. Think of how scientific communism worked out. Statements like the one below are a reminder that bad ideas die hard.

Using technology to deliberate on matters of national importance, deliver public services, and incorporate citizen feedback may ultimately be a truer form of direct participation than a system of indirect representation and infrequent elections. Democracy depends on the participation of crowds, but doesn’t guarantee their wisdom. We cannot be afraid of technocracy when the alternative is the futile populism of Argentines, Hungarians, and Thais masquerading as democracy. It is precisely these nonfunctional democracies that are prime candidates to be superseded by better-designed technocracies—likely delivering more benefits to their citizens…. To the extent that China provides guidance for governance that Western democracies don’t, it is in having “technocrats with term limits.”

The problem, of course, is that more often than not these “technocrats” in the poor countries of the world (read those with the most and biggest guns, a.k.a autocrats) are woefully incompetent (see here) and never observe their term limits (this classic on dictatorship comes to mind).

The question of what to do with the relatively more competent autocrats will be the subject of a future post.

H/T Ideas Market

South Sudan to relocate capital to Ramciel

The Sudan Tribute reports:

“The survey for the proposed new capital of South Sudan, Ramciel, is expected to be completed within the next six months, reports the official in charge of the project.

resolved to suspend any construction of new public buildings for the national government in Juba.

Juba was disqualified for a number of reasons including administrative stalemate over which level of government its jurisdiction should fall under.”

That is the official reason.

Source: Political Geography Now

I know very little about the deliberations that resulted in the move but another reason could be that Juba was too far from the new nation’s centre of (ethno) political gravity (see maps; click on image to enlarge). Relocations of capitals almost invariably have political considerations. One only hopes that the Bari community whose ancestral homeland is around Juba will not suddenly find themselves completely abandoned by the central government.

The government should ensure that Ramciel does not suddenly suck in all the money. It could prove beneficial to decouple the political and economic capitals of the country.

Source: Gulf 2000 Project

On the plus side this is a sign that the new government in Juba is willing to try out new things. A fresh start in Ramciel might not be such a bad idea.