DIVERSIFICATION: ANSWER TO SUSTAINABLE ECONOMIC GROWTH IN DEVELOPING COUNTRIES

Economic growth in Developing countries (Resource-rich) continues to hinge on the overwhelming emphasis on the generation of national GDP from the exportation of goods from the extractive industry and agriculture (Oil, minerals and farming produce).  In Developed countries 98% of the labor is engaged in the Tertiary and Secondary Sectors combined and the remainder 2% is engaged in agriculture, conversely in developing countries, between 50-75% of the population is engaged mostly in agriculture and the extractive Industry, while a much smaller percentage could be found in the Secondary (manufacturing) and Tertiary Sectors. Paradoxically despite the abundance of natural resources, excellent and fantastic topography, fine climatic and weather systems, fertile lands and rich biodiversity, the poorest people on earth today can be located in developing countries. On balance, globalization has helped make the world an increasingly interdependent place and has presented several opportunities globally, yet those countries with a highly educated and skilled labor force have been the beneficiaries of globalization.

Based on sectoral analysis of statistical data on GDP in the economies of Developing countries, Emerging economies and Developed Countries, it is logical to conclude that there is a correlation existing between the sectoral distribution pattern (of labor/GDP and overall GDP creation) in the economy where a slimmer labor force/smaller GDP in the Primary sector with progression from the Secondary to the Tertiary sector resulted in a phenomenal cumulative GDP per nation (Botchwey, 2014).

The implications of this finding and others before it, ultimately call for Developing countries (Resource-rich countries) to embrace a proactive industrialization drive, economic efficiency, Export and Economic diversification platforms, openness to globalization and an end to the skewed sectoral distribution pattern of labor, GDP generation and commodities (inputs in the production of other goods) in the Primary Sector, an end to the “resource curse”, the endemic vicious cycle facing most developing countries in a corruption free environment. Further, the recent success stories of research and case studies on Chile, Indonesia and Malaysia (Revenuewatch, 2013) attests to the viability of the diversification process in resource-rich countries. In an increasingly dynamic and sophisticated World, the World cannot do without globalization and so do Developing countries.

Africa Land Grab Unacceptable

AGRI FOCUS

 
 

Africa Land Grab Unacceptable

 

“My son, before BIDCO and other palm oil production investors came to acquire vast tracts of land on Bugala Island for palm oil production purposes, local communities around the shores of Lake Victoria used to live a good life. Our fish catch, especially species like, Haplochromines, Tilapia, Nile Perch, and Lung fish used to be good, enough to make us get money to pay school fees for our children and to cater for other household needs. We used to grow bananas, beans, cassava, maize and sweet potatoes, among others, which we would transport and sell in Kampala.

When BIDCO and other palm oil investors came, the government of Uganda convinced us to surrender our land to the investors on the strength that we would be adequately compensated and given land elsewhere. This did not happen. The money we were given was too little to secure an alternative parcel of land. Our fish catch has been declining at an alarming rate due to chemical effluent into the Lake. We are worse-off than we were in the beginning,” says John Baptist Kyambadde, a resident of Bugala Island, Kalangara district in Central Uganda. 

The farmers who BIDCO gave agro-inputs at subsidized price to plant palm oil trees in their individual gardens later failed to pay for them. This forced many of them to sell their land cheaply in order to get food to feed their families.

Paul, one of the many affected farmers, owned about 14 acres of land on which he grew various food crops such as cassava, beans and matooke. He would sell some of his produce and get money to pay school fees for his children.

“When BIDCO came and convinced us to embrace its palm oil outgrowers  programme,” he says, “I joined, thinking that I would make good money. Unfortunately, like many farmers, I later failed to pay for farm inputs, forcing me to sell my only piece of land.”

Such heartbreaking stories are all over sub-Saharan Africa. Foreign investors financially backed by their home governments, transnational companies, corrupt politicians and selfish local rich people have for decades engaged in grabbing peasants’ land to use for their large scale tree plantations, biofuels and food production, mainly for export.

Millions of peasant farmers, women and pastoralists in countries like Ethiopia, Ghana, Uganda, Tanzania, Sierra Leone Mali, Ivory Coast, Liberia and Mozambique have lost vast tracks ectares of land to land and water grabbers. The victims have been rendered landless in their own countries and ancestral communities.

Developed and emerging powerful economic countries like India, China, Singapore, South Korea and oil rich countries like Saudi Arabia, UAE are increasingly acquiring land for commercial and food production purposes in Sub- Saharan Africa, where there is still plenty of unexploited land at a reasonably cheaper price.

Information from Global Land project report, indicates that, by the end of 2009, an estimated 62 million hectares of land in Sub-Saharan Africa had been leased and was firmly in the hands of foreign investors for biofuel and food production.

A representative of Agro-Africa, a Norwegian company operating in Senegal, was one time quoted to have said, “We have convinced rural communities to grow Jatropha Curcas on their land measuring about 200,000 hectares.” In Tanzania, New Forest Limited, a UK based owned company is utilizing over 200,000 hectares of land for tree planting, specifically for timber and carbon credit. As land and water grabbing continues to skyrocket in Sub-Saharan Africa, hunger, famine, and malnutrition in Africa continues, yet the continent possesses 62% of the world’s remaining arable land.

While in 2003, the Heads of State and government of the African Union, adopted the Comprehensive Africa Agriculture Development Programme (CAADP) to spur food security in Africa, this is being negated by the fact that groups of people are being evicted from their ancestral and communal lands in a non-transparent manner, usually through, trickery, coercion, and intimidation, by land and water grabbers, supported by government functionaries. The Maputo protocol, in which Heads of State committed themselves to allocate 10 per cent of their National budgets to the agricultural is being implemented at snail-pace.

The trend where African transactional leaders, selfish tribal chiefs and corrupt politicians are conniving with foreign investors and governments to  in cheaply and freely dishing out Sub- Saharan African land for large scale food and bio- fuel production, for exporting abroad, in total disregard of locals protests is unacceptable. Africa’s citizenry must on the other hand be proactive and make productive use of arable land that is lying fallow. Whining about grabbing while the land is not being made use of is a sign of clouded thinking.

By Moses Hategeka.

The author moseswiseman2000@gmail.com is a Ugandan based independent Governance researcher.

NEW GLOBAL NETWORKING OPPORTUNITY FOR VIEWERS

 

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NEW GLOBAL NETWORKING OPPORTUNITY

I have nominated you for Maven, a “microconsulting” network in which you can earn substantial fees for sharing your knowledge with other professionals. You can also connect with other smart people and get answers to your business questions. You can simply accomplish this by clicking on
http://www.maven.co/join/Bb3DvMHf

Individuals who click on this button will have the opportunity to send you an invitation to connect on Maven.

Individuals who click on this button will have the opportunity to send you an invitation to consult on Maven.

UNRAVELING THE MYRIAD OF PROBLEMS FACING AFRICA: ARE THERE ANY LINKS BETWEEN POVERTY, DISEASES AND HUNGER?

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The truth is that poverty, hunger and diseases in Africa are inextricably linked and cannot be separated. Desease treatment and disease prevention require not only investment, research, cutting edge technologies but also commitment. Resolving the three does not come on a silver platter. Africans should be committed to do that no matter the difficulties to be encountered in achieving that objective. The opportunity cost to implement these measures/objectives today will be greater if Africans shelve this responsibility to later. Today we have Institutions of higher education, research institutions, stakeholders and academia on the continent that have not lived up to expectations. It is for this reason that I have called for the processing of the bulk of natural resources in Africa, an overhaul of farming practices geared towards increase agricultural productivity and export diversification platforms in Africa. Value addition methodologies will not only create jobs in Africa but will extend the “shelf lives” of processed goods unlike their unprocessed counterparts like oranges, pineapples, cocoa, vegetables, coffee, maize, millet etc (mainstay of African economies today) and simultaneously boost food security on the continent. Canned food can last longer and value more and can also create multiple jobs simultaneously. Value added goods could also open the floodgates for the granting of patents to African inventors and researchers. The African local currencies will be strengthened vis a vis other foreign currencies to jump start the fragile African economies and consequently improve the standard of living of millions of Africans. This will bring about a drastic reduction in poverty. Further it is the same research prone African ideals that will further aid in the creation/manufacturing of medication, cutting edge technologies in disease prognosis and therapy. It is the same research prone African ideals that will also uplift traditional medicine that abound in Africa today. Most of the ingredients for the creation of medicines globally can be traced to Africa. All Africans need to do is to add higher value to these natural ingredients for the domestic treatment of ailments and for commercial purposes/international trade. The wealth of a nation to a large extent depends on the cash inflow from foreign countries (from export sales) as against cash outflow (expenditure related to the purchase of expensive value added goods from abroad). In a situation where the value of your cash inflow is greater than the value of your cash outflow, the country in question will experience a balance of payment surplus and improved standard of living for millions of Africans. Conversely if African States get a balance of payment deficit that will mean national debts, unemployment, inflation and weak national currencies like most African countries are experiencing today. Further, diversified economies (case in point, the economies of industrialized countries) can withstand global shocks much better than fragile economies in Africa that are not diversified. Yes poverty, hunger and diseases are inextricably linked and should be seen in that perspective when it comes to solving the myriad of problems facing the African continent. For a limited period read my book for free to unravel contemporary impediments facing Africa and the developing world and subsequently unearth proactive longstanding solutions to these obstacles. TRANSFORMING THE ECONOMIES OF DEVELOPING COUNTRIES $0.00 Kindle Purchase! Borrow this book for free on Kindle, a must read! This book has special applications to farmers, stakeholders, academia, NGOs, policy makers, environmentalists and all progressives in Africa, Asia and Latin America. Rush in to get your free copy! Thanks for your patronage! http://www.amazon.com/-/e/B008MMY74S

RELIGION AND ECONOMIC DEVELOPMENT IN GHANA

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While prayers and the recognition of God are critical in the daily lives of Ghanaians, Ghanaians should know economic prosperity will not drop from the heavens and transform Ghana. Incidentally this equally applies to both developed and developing countries. Ghanaians will need to make that happen….which is… there is the need for a paradigm shift whereby all stakeholders, the formal sector, the informal sector, public and private sectors, institutions of higher education, the government and all political parties recognize to add higher value to what God had endowed on Ghana in the form of abundant natural resources before their sale on the global market. There is also an urgent need to have export diversification platforms. If these are done correctly jobs will be created from the inherent “multiplier effect” that is associated with value addition methodologies, this will strengthen the local currency the cedi as against foreign currencies, increase the “shelf lives” of processed food as against farming produce, yield more foreign exchange, improve the standard of living of Ghanaians, it will give credence to indigenous technology and open the floodgates for the award of patents to inventors and researchers in Ghana. In addition to this, it will diversify the economy of Ghana.

Diversified economies are more capable of withstanding global shocks than economies that are not diversified like Ghana’s. The reason why countries like Japan, China and Germany are rich is simple: they have added higher value to natural resources before their sale on the global market; that is shifting from low tech goods to high tech goods.

Question….why will a small country which has much less natural resources than Ghana for example LUXEMBOURG in Europe have GDP per capita standing at $80,200 (2012 established) and is ranked 5th globally while Ghana with all its natural resources is ranked in terms of GDP per capita income 173rd with GDP per capita standing at $3,300 (2012 established)? Conversely let us get closer home. How do we explain the phenomenal economic gains of Mauritius and Botswana? Since independence in 1968, Mauritius has developed from a low-income, agriculturally based economy to a middle-income diversified economy with growing industrial, financial, and tourist sectors with GDP per capita standing at $15,600 and ranked 85th globally (CIA World Fact Book 2012, established). Further, through fiscal discipline and sound management, Botswana transformed itself from one of the poorest countries in the world to a middle-income country with a per capita GDP of $16,800 in 2012 and ranked 80th globally. These rich countries have done what they needed to do economically and strategically by adding higher value to natural resources/services and have successfully and consistently embarked on export diversification platforms (CIA World FactBook, 2012). Yes Ghana can do it with a paradigm shift! Of course this transformation has to take place in an atmosphere of probity, accountability, morality and integrity. Religion becomes paramount especially in macroeconomics in Ghana whenever it is allowed to give a deeper meaning to probity, accountability, integrity and morality in the transformation of the economy of Ghana by all stakeholders, government officials, researchers, NGOs, the private sector, public sector, the informal sector, the formal sector and International organizations willing to give Ghana a hand in this significant process.

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GHANA: VALUE ADDITION METHODOLOGIES AND EXPORT DIVERSIFICATION PLATFORMS BY EMMANUEL BOTCHWEY

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While prayers and the recognition of God are critical in the daily lives of Ghanaians, they should know prosperity will not drop from the heavens and transform Ghana. Incidentally this applies to both developed and developing countries. Ghanaians will need to make that happen….which is.. there is the need for a paradigm shift whereby all stakeholders, the formal sector, the informal sector, public and private sector, institutions of higher education, the government all political parties recognize to add higher value to what God had endowed on Ghana in the form of abundant natural resources before their sale on the global market. There is also an urgent need to have export diversification platforms. If these are done correctly jobs will be created from the inherent “multiplier effect” that is associated with value addition methodologies, this will strengthen the local currency the cedi as against foreign currencies, increase the “shelf lives” of processed food as against farming produce, yield more foreign exchange, improve the standard of living of Ghanaians, it will give credence to indigenous technology and open the floodgates for the award of patents to inventors and researchers in Ghana. In addition to this, it will diversify the economy of Ghana.

Diversified economies are capable of withstanding global shocks than economies that are not diversified like Ghana’s. The reason why countries like Japan, China and Germany are rich is simple.. they have added higher value to natural resources before their sale on the International market….that is shifting from low tech goods to high tech goods.

Question….why will a small country which has much less natural resources than Ghana for example LUXEMBOURG in Europe have GDP per capita income standing at $80,200 (2012 established) and is ranked 5th globally while Ghana with all its natural resources is ranked in terms of GDP per capita income 173rd with GDP standing at $3,300 (2012 established)? These rich countries have done what they need to do  economically and strategically by adding higher value to natural resources/services and have successfully embarked on export diversification platforms (CIA World FactBook, 2012). Yes Ghana can do it with a paradigm shift! Of course this transformation has to take place under the atmosphere of  probity, accountability, morality and integrity.