In October, President Muhammadu Buhari presented an Appropriation Bill of N20.51trn ($43.7bn) for the fiscal year 2023 to the joint session of ... the lower and upper Chambers of the National Assembly. He described the 2023 proposed budget as one “of fiscal sustainability and transition" - his very last budget as Nigeria's president. However, what financial legacy is he leaving behind?
The economic, financial and cultural isolation that Russia has suffered since late February – as a result of Western sanctions – illustrates the dangers of the autarkic unconsciousness that is so prevalent in autonomist-independence discourses throughout Africa. Almost overnight, 144 million Russians are discovering what real life is like without foreign banks and Mammon’s seal, “exploitative and neo-colonial” multinationals and the “imperialist influence” of the “almighty” dollar.
The rest of the world, and the most vulnerable African households, in particular, have to contend with this new reality of threats to economic growth, accelerating inflation and the risk of food shortages. In an ideal world, the “instant impoverishment of a major economy”, in The Economist‘s words, and the West’s “economic blitzkrieg”, as Vladimir Putin put it, would serve as a warning and mark the “day of reckoning” for the many who foresaw the “break-up” between the continent and its traditional economic partners. Do the most ardent autonomists really understand how vulnerable the continent is?
At the beginning of March, Mthuli Ncube, Zimbabwe’s finance minister, reiterated that the economic sanctions that the West imposed on Harare had cost the country $42bn since 2002. This “is almost double the size of our economy, which is $25bn. This is […] huge and people need to realise the effects of such a loss,” said the Zimbabwean expert, a former AfDB chief economist.
“Now everyone knows that financial reserves can simply be stolen,” said the Kremlin’s master in mid-March, as Euro-US sanctions deprived the Russian Central Bank of a large part of its $600bn foreign exchange reserves, the “war chest” that had been painstakingly built up in the run-up to the offensive in Ukraine. In vain…
Despite the major “upheavals” in the continent’s economic relations announced in recent years, by the end of 2019, the Netherlands’ investment stock in Africa alone had reached $67bn. This was 52% more than that of Chinese investment. African countries still export twice as much to the European Union (33% of sales) as they do to China (17%). And although more than 70% of exports from African countries to other parts of the world are raw materials, the share of manufactured goods in Africa’s sales to the EU rose from less than 25% in 2011 to 35% in 2021.
This is not to paint a flattering picture of relations with the West. Africa’s trade deficit with the Old Continent remains colossal – €24bn ($26bn) in 2020. “Most EU countries have a trade surplus with Africa, except Sweden, Slovenia, Italy and Spain,” says the European Commission. Brussels’ new green strategy puts future African exports at risk. Those who propose gradually reforming economic ties – probably a multi-generational process – between African countries and the West are aware of this profound inequality of power and do not believe that rhetoric is an economic strategy. Furthermore, the “real” world has a rather cruel way of bringing dreamers back to earth.
Exasperated by the impracticality of her husband, who, despite a lack of financial resources, was preparing to run for the US Senate in 2002, Michelle Obama joked that he had “magic beans” in his pockets, which, if planted, would bring him the success he hoped for. “Something like that,” he said. Elected senator in November 2004, the future US President turned to his wife and said: “Magic beans, honey. Magic beans.” A nice story. If only it hadn’t ended with Donald Trump as president.
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