At the conclusion of the lavish Africa Union Conference of Finance Ministers held in Abuja (Nigeria), these guiding lights of economic wellbeing declared that appropriate mechanisms should be established to tap sources of capital to finance Small and Medium–Scale Enterprises.
This is so because there is insufficient industrialization and insufficient infrastructure constraining African development. They also added that Central Bankers should no longer be tasked with maintaining price stability, but they should be actively involved in supporting industrialization (or so the newspaper The Punch reports).
Right!
And there you have it folks. The reason why Africa is an economic, military, political, human, social (and anything else you may want to add to the list) basket case: lack of capital for industrialization purposes.
And we thought that Africa was in deep trouble because the most common political hobby seems to be outdoing each other in bribe size when they are not outright on a killing spree. Silly us. It is not. It is lack of capital for development purposes. Of course! It is not that no sane entrepreneur wants to touch Africa with two meter tongues, driven by a robot directed by remote control while the driver is sitting at a safe distance (typically a few thousand miles) in full–body explosive–protection suit. Of course! It is the lack of capital.
Let's analyze this.
Most African nations have a corporate tax level of about 30%. To put this into perspective, most fist world countries do not have such a high tax rate (there are exceptions, of course). Most development countries (in the World – Africa excluded) do not have such tax rates.
To this 30% corporate theft, we need to add "personal" taxation which typically runs in the order of 20% (depending how is it calculated).
Then, of course, we need to add a "modicum" (i.e. a modest amount) of Value Added Tax of "only" about 15%.
In addition, we can never forget, we have the hidden tax of inflation that runs in the order of 10% (excluding hopeless countries).
And what would an entrepreneur get for all this robbery? Well, this person would get, under–educated population, decrepit and unreliable infrastructure (when available), incompetent bureaucrats at any level, bribery as a way of living and on top of that, a microscopic internal market and export barriers with good chances of war! Heaven we tell you! We can't possibly understand why business people are not flocking to Africa to avail themselves of this wonderful one–time opportunity… to get broke (or perhaps, if they are lucky enough, killed).
Ahh… but you see dear reader, Africa cannot develop without capital and since obviously these evil, evil entrepreneurs do not want to invest their money in Africa, never mind, Central Bankers will help themselves.
And what is the plan that these masters of the fiat universe propose?
To tap (i.e. steal):
- Diaspora Remittances
- Pension Funds
- Sovereign Wealth Funds
- Excess Foreign Reserves
Let's run through this again, this time with our translation in italics:
- Disapora Remittances
This is money that African nationals living outside Africa send to friends and relatives to help them survive. That's right! Central Bankers are going to tax donations! Revolutionary concept! These bastards (the poor people dying of hunger) have not been paying their dues to the government! How dare they! But that's OK, we'll get them!
- Pension Funds
Yet another wasteful pile of money that people don't need anyways. What's this concept of retiring? Why? Hell! If a person worked for 50 or 60 years, they may as well keep working until they drop dead! Retirement, no way! We need the money to spur industrialization (whether industrialists want it or not)… or maybe there is another reason… hum… we have to wonder… what happens in Africa when there is money floating around… hum… never mind.
- Sovereign Wealth Funds
That's right. All this money coming to Africa to invest and not sharing. No way! We need to tax them… hold on… we already do… never mind… we we'll tax them again! That will teach them to come to African and…gasp… invest! The bastards!
- Excess Foreign Reserves
That's right. Why do people need all those "excess" reserves sitting in their bank accounts? Why do banks need all that money anyway? Aren't they happy with all the money we print? It is good stuff, look, first class paper and ink. It says money and all on them. It's not like we are creating these colored pieces of paper out of thin air… oh… wait … we are. Never mind! They don't need that anyhow. It is only private property and as everybody in Africa knows, what's yours is ours…whether you like it or not.
In summary, African nations are basket cases, primarily due to politicians. They have created this gigantic mess with no way out. Nothing works and nothing can be made work. And what is their solution? Rob people. Theirs, ours, visitors, citizens, corporate, personal, no matter, just rob'em. Right! Actually, it is right there with our expectation. We didn't expect less and they did not disappoint.
African Central Bankers see private piles of money as cookie jars, and the temptation is overwhelming. Instead of lowering taxes (or even better, abolishing them), they rise them. Instead of decreasing their debts, they keep piling it on. Instead of printing into oblivion, they keep printing. Instead of terminating this cycle of economic destruction they fuel it.
Is then there surprising that African countries are in a death spiral? Certainly not for us.
Of course, we can't blame African citizens; they haven’t yet evolved past their tribal political systems. It is not their fault, it is politicians and bureaucrats fault. They are the ones that know best. Yet, there you have it. Government through thievery, only the lowest action will do when the temptation to get their fingers into the few remaining cookie jars overwhelms them.
Power to the people? Sure. Just a few selected ones.
And the rest? They get robbed.
Why do we bother?
Seriously, why do we bother?
Because most people do not understand that what these Central Bankers are doing is exactly what other Central Bankers throughout the world are doing. It is pointless to replace the people at the top because they all act in the same manner anywhere in the world. It is not an "African" problem, it is a World problem. Just like the hunger they never seem to get around to solve.
Believe it or not, dear reader. It is your choice.
Note: please see the Glossary if you are unfamiliar with certain words.
