Poverty in Africa can be Fixed

Poverty in Africa can only be fixed by African governments taking control of their own economies; welfare and aid will only ameliorate poverty: it will not fix it.

President Macron’s Prescription

As reported in The Times, President Macron said that Europe’s migrant crisis can only be solved in Africa, as he called on leaders from both Europe and Africa to find new ways to stop the flow of people to the Mediterranean.

“We need more Africans to succeed in Africa,” Mr Macron told a crowd in Lagos. Too many people were leaving peaceful countries such as Senegal, Ivory Coast and Nigeria because of “a lack of hope, a lack of opportunities”, he said. “These people, given the magnitude of this wave, cannot be accepted, at least, not all of them.”

Africa Needs More Than Just Talk

Of course only Africans can solve their own economic problems, but Macron’s devotion to Elite Capitalism will not help them.

We can use the world’s prosperity to lift nations out of poverty, via trade, but we have to do it differently. It is no good just using our prosperity to lift the incomes of the top 20% of the people of African nations, as has been happening for the last 30 years.

While increased trade has resulted in some improvement in living standards in some developing nations, in general the gap between the developing world and the rest has not narrowed very much, especially if you leave China, Taiwan and South Korea out of the picture. The difference in those places is that the leaders of these nations didn’t believe the more trade would be enough: they also decided to control the situation more tightly.

The government of each African nation has to realise that trade will not be sufficient to lift their people out of poverty. To lift a people out of poverty it is necessary to increase the income the people receive, either from their farms, or by making things for each other. Forget about a “leg-up” from global corporations; they must always first look after themselves.

An economy that does not make most of its own goods and supply its own services is in a very fragile situation. This is a change in thinking. It requires African nations to increase tariffs, with the explicit objective of increasing the incomes of businesses. Higher local prices will eventually mean higher wages. Less imports means more local work.

Increasing tariffs on luxury goods should keep more money at home, with those with money looking to invest locally as profitability of local businesses improve, rather than spending on expensive luxury cars and other obvious signs of wealth and individual prosperity.

Abundant jobs, not the lowest possible prices, are the key to economic prosperity for every nation.