Illusion of economic growth

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The driving force behind growth of Azania’s poverty has been “economic growth”. Politicians and the public are being misled into believing that a good measure of economic development of Africans is through “economic growth”. Africans have been brain washed to believe that economic growth as it is currently measured means good news.

However, this is illusion, in reality it means the rich are getting richer and the poor are getting poorer.  The thinking on growth conveniently ignore the fact that the so called “economic growth” increases inequality. For instance, 10% growth of a negative base becomes a bigger negative, and the opposite is true, 10% growth of a positive base is true growth. Africans are in the negative, and any “economic growth” sends them deeper into the negative. Even if the economy grows, it is not growing for the poor, but growing for foreigners. You can only grow what you have - it means if you are in poverty, you will grow your poverty – and you get poorer. 

It may be difficult to conceptualise economic growth as negative. The concept is hereby explained by looking at resources: If Africa and Foreigners, combined they have 100% resources at their disposal. They have already consumed 50% of the resources.  Africa has 10% (which is of course exaggerated) of the resources and foreigners have 40%. Proportionally it means Africa owns 20% (10%/50%) of the wealth today and foreigners owns 80% (40%/50%). Assuming 10% economic growth- economic growth means depletion of resources. Africa will be sitting at 11% (10% plus 10% growth on the 10%) and foreigners at 44% (40% plus 10% growth on the 40%), which means Africa is only getting 1% from the newly consumed resources and foreigners will be getting 4% of the resources.  Proportionally 55% of the resources will be depleted and Foreigners will have earned 4% of the 5% growth. It is clear that foreigners are the winners.

The bottom line is that Africa is “getting richer” in absolute terms, however proportionally and in reality it means they are falling back on the efforts of trying to catch up with the foreigners. This means Africans are getting poorer and poorer in comparison to their counterparts while the resources are getting depleted. The counter argument will be that things are not so simplistic; growth is more complicated than that. However, even if the learned can make all the adjustment, foreigners will remain the main beneficiaries of economic growth.

The test of good economic policy is not whether it raises output or employment but the proportionate growth of wealth for African. Economic growth as it is currently measured, it does not benefit Africans. The continuing extreme poverty growth in Africa is an indication that these policies a failing in staggering proportions, its decay at its best.

Africans must embrace economic growth of Africans vs. foreigners and not blanket economic growth. It must not focus in maintaining current proportions as required by foreigners. Political leaders must understand that poverty can be eradicated without growth; if the current wealth is shared equally, there will not be poverty. Growth will not achieve poverty eradication but wealth distribution will.  Imagine not exporting the resources and minerals of Africa, if all Africans produce were consumed and kept by Africans equally. Africa will not be poverty poster boy. 

So caution is justified, but the goal must still be achieved. African people must prioritise poverty eradication and make economic decision when putting politicians in office. Africa must ban exportation of raw materials/resources, even between provinces, and redefine economic growth. Grants are making poverty look slightly better, while in reality is hauling Africans deeper into poverty. Social grants must be increased but given as a reward for achieving certain targets. Poor Africa is left behind by fast-growing foreign capitalist. With active Africans, Inequality will be narrowed and Africans will stop growing into extreme poverty. Misery of millions will be consigned to the records of history.

There are unnecessary discussion about what exactly counts as economic growth and how best to measure it. In the African context, economic growth should be when Africans are fully benefiting from their resources and wealth of their own continent. The current economic growth definition will only apply to Africa when there is no poverty and African owns majority of the wealth, and foreigners only benefit from excess African resources and wealth that Africans don’t want. Through history, dire poverty has been a basic and acceptable condition for Africans and Africans have been happy with economic growth that does not benefit them. Africans have been made to believe that poverty is plain and unchangeable fact.  The eradication of poverty seems impossible given the number of times politicians have promised to achieve and failed. The main contributor is the western school of thought that African leaders apply to govern Africa, even though it was proven ineffective.  

 

Last modified on Friday, 18 November 2016 14:12
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Hi my name is Marcubie and I have been the Creative Director on Medunten Technology. The languages only differ in their grammar, their pronunciation and their most common words. he thought. It wasn't a dream. His room, a proper human room although a little too small, lay peacefully between its four familiar walls pronunciation 

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