Oil-price volatility highlights the fragility of a development model based on a single resource. For oil-producing countries the imperative of adopting a more diverse investment strategy can no longer be ignored.
Guinea’s Latest Dictatorship
As they gather in Cape Town later this week to convene the 25th World Economic Forum on Africa, business, political and civic leaders from Africa and around the world cannot ignore what is happening in the Republic of Guinea.
Economic development and investment are the cures that can help many of Africa’s ills
The conference is dedicated to celebrate Africa’s “remarkable economic turnaround” – something that is well worth celebrating – but recent events in Guinea are a stark reminder that not all Africans have shared in this new prosperity.
Pan-African growth over the past 15 years has accelerated, growing 3 percentage points faster than global GDP. Guinea, by contrast, has seen foreign direct investment flee and the sanctity of contracts and rule of law eviscerated, contributing to an increase in poverty, corruption, and government-sanctioned violence.
In fact, despite achieving independence from France 57 years ago, Guinea has been unable to escape the influence of foreign masters – the colonial rulers of yesterday have been supplanted by an increasingly authoritarian President, and western companies like Rio Tinto that are literally squatting on the key to the country’s future.
WEF Africa participants need to play a commanding leadership role in bringing Guinea to the centre of world attention.
This is an election year – only the second democratic election in Guinea’s history. So far, it is not going well.
President Alpha Condé refuses to hold the local elections that were promised years ago. Guineans – protesting against this denial of democracy – have been shot, in some cases fatally, by Condé’s security forces.
Attempts to negotiate have come to nothing, and Condé is now being accused by many observers from Europe and America of stoking ethnic tensions in the country.
The first six months of 2015 are the latest episodes in a pattern of failure.
Under Condé’s stewardship, foreign investment has ground to a halt in the face of government expropriations, corruption allegations have run rampant, and democracy has been eroded.
The people of Guinea are suffering for these failures, with urban and suburban poverty on the rise in a country where the U.N. estimates that 40% of people survive on less than $1.30 a day.
It’s why the United Nations’ Human development Index (HDI) ranks Guinea 179th out of 187 countries, given the welfare of its citizens.
For perspective, that means the subjects of war-ravaged Rwanda (#151), Sudan (#166), Liberia (#175), and Mali (#176), as well as those who’ve suffered three decades of Robert Mugabe(#156), have a better quality of life than do those who live in Guinea.
The scale of the failure is clear, when these statistics are read and understood.
Guinea has extraordinary wealth potential thanks to its vast natural resources, including iron-ore and gold deposits, as well as the largest bauxite reserves in the world, and also an inexhaustible water supply in the form of three massive river systems.
This West African country could be one of the richest countries in Africa. Instead, it is one of the poorest.
Perhaps the most glaring example of Condé’s mismanagement concerns the massive concession at Simandou by Anglo-Australian mining giant, Rio Tinto.
Widely recognised as one of the world’s greatest iron ore deposits, Rio Tinto has developed and exploited precisely nothing despite holding the licenses for almost 20 years.
That is 20 years of missed opportunity for the people of Guinea.
Alpha Condé, despite being advised by famous foreign advisors such as Tony Blair and George Soros, has not succeeded in securing action from Rio Tinto to develop the site, or move his country’s mining industry in the right direction.
This is one example amongst many. Economic development and investment are the cures that can help many of Africa’s ills – and when you look at where success in Africa has been achieved, you will find that a fertile investment climate is a major reason why.
It also needs to be the right type of economic investment: African leaders must choose investors who will develop, not delay – we need investors who want to partner, and not just squat on our future.
In Guinea, Alpha Condé has not made these choices correctly.
The need for free and fair Guinean elections – especially in the wake of the recent fatal shootings by government security forces – is clear.
A fragile democracy in Guinea is being undermined; the investment climate is being undermined; and the poverty of the population is worsening as a result.
Franklin Cudjoe is Founding President and CEO, IMANI Ghana. IMANI is ranked 2nd influential think tank in Africa.