Dr. George Ayittey is one of the world’s foremost authorities on the continent of Africa. As a professor, he has published many thought-provoking books about the continent, including Indigenous African Institutions; Africa Betrayed; The Blueprint For Ghana’s Economic Recovery, Africa In Chaos and Africa Unchained: The Blueprint for Africa’s Future.
In addition to this, Dr. Ayittey was selected by Foreign Policy magazine as one of “The World’s Top 100 Global Thinkers.” He has testified before US congressional committees and the Senate of Canada. Dr. Ayittey has served as a consultant to the World Bank, US AID, and International Council on Metals and the Environment (ICME).
Dr. Ayittey has given lectures to various organizations, institutions and universities, including the National Bar Association, the International Monetary Fund (IMF), the US State Department, US Foreign Service, and the United Nations Development Program (UNDP). He has appeared on numerous radio and television programs, including Canada AM, CBS Nightwatch, ABC Nightline, MacNeil/Lehrer NewsHour, C-SPAN, BBC World Service, and CNN International.
Recently, Bold contributor, Richard Ivory, interviewed the economist about his life and work, and gained interesting insights on his views about the role of China in Africa, and those who question whether or not capitalism is compatible with the continent.
BOLD: Dr. Ayittey, thank you for taking the time to allow us to interview you. Can you share a bit about yourself and your upbringing?
DR. GEORGE AYITTEY: I was born in Tarkwa, Ghana. I was one of 10 children born by my father. I was never a gifted child but more of a rascal. Even my younger sister, Sherry, beat me in primary school. What changed me was an event I will never forget.
One night an uncle hauled me and my elder brother into a room to teach us spelling. You can imagine the foot dragging and screams – even at the time when there was no television. Nevertheless, he taught us how to spell two words: Mississippi and hippopotamus and said he would give a quarter to the one who would be able to spell those two words, the next day. At the appointed time the following day, my brother couldn’t spell those two words. I struggled with them , but eventually managed to spell them. And true to his word he did give me the quarter. That changed my entire outlook on life. I came to believe that anything is possible or achievable, given the right incentives. My position in class changed from near last to second, even beating my sister. From then on, my academic performance accelerated and won me scholarships to finance my entire education – from primary school to university. I finished my PhD at the University of Manitoba with a GPA of 4.0. All because an uncle of mine cared enough about my education to teach me spelling and gave me a quarter after successfully spelling two words. Not only did I come to believe in myself, but also that incentives work.
Now, I chanced upon economics by accident. Our teacher – an Englishman called Mr. Frostick – did not know squat about economics. In fact, he himself was studying for his degree in economics at a British University while teaching us the subject. If you asked him a question, he would open the textbook, which he always kept on his table, and read you the answer. Naturally, economics was not my favorite subject. History and geography were but I did poorly in them, at the university level. So when it came to a subject to specialize in, economics was the obvious one. As you can see, I became an economist by default.
BOLD: In the past few years, China has played a much larger role in the affairs of African nations. How would you describe this new relationship? Is China’s role in Africa a positive or a negative?
DR. GEORGE AYITTEY: Largely negative because of the way African leaders handled it. Don’t get me wrong, trade with China could have been a boon for Africa. Indeed it was, pushing Africa’s rate of growth to 5.1% in 2013. But African leaders miscalculated –a fact which has become self evident with China’s economy in crisis. Operating under a fallacious notion that the enemy of my enemy must be my friend, African leaders threw caution to the winds and trooped to Beijing to throw themselves prostate before China and signed a blizzard of “sweet-and-sour” deals with African countries – sweet-for China but sour for Africa. Fallacious because Africa’s own history teaches that every foreign entity that goes to Africa, does so to pursue their interests, not Africa’s. Americans go to Africa to pursue American interests. The French go to Africa to pursue French interests. The Arabs go to Africa to pursue Arab interests. Certainly, the Chinese are not in Africa because they love black people so much. Not all the deals African leaders signed with China were in Africa’s interest. As an example, infrastructure had collapsed in Africa and China needed resources which Africa has. So why not infrastructure for resources deals? Indeed, there were but scams –
With the “infrastructure-for-resources” deals, some shady Chinese middlemen or syndicates estimated the cost of the infrastructure project at grossly inflated prices. Then they sought financing from China’s EX-IM bank. Then they demanded a quantum of resources to be shipped to China for repayment. All this was done with a bow. The higher the cost estimate, the larger the loan and the larger the loan, the more starry-eyed the cash-strapped African government for securing it. If the African government wavered, the Chinese might build a presidential palace, sports stadia, or dash the president a helicopter.
It was essentially a “closed shop” deal, shrouded in secrecy, and signed with mostly autocratic regimes, opaque; without any competitive bidding and all stacked in China’s favor. If approved, it was a Chinese company that undertook the infrastructure projects and there was no protection against cost over-runs.
A typical case was the $23 billion deal China signed with Nigeria — an oil-producing country that does not produce enough refined petroleum products for its people and must import 85 percent of them. China was build 3 refineries with a combined capacity of 750,000 barrels a day that exceeds the domestic demand of some 450,000 b/d. In exchange, China wants to grab one-sixth of Nigeria’s 36 billion barrels of oil reserves In Egypt, China undertook to build a $2 billion refinery that would be the largest such plant in the Arab nation and Africa. The capacity of the refinery will annually amount to 15 million tons or 105 million barrels of oil or 287,671 bbl/d.
China offered Ghana a $3 billion loan on barter terms. The loan will be used to rehabilitate portions of Ghana’s dilapidated railway system, build infrastructure to capture gas that would otherwise be flared from oil production, and reconstruction of roads. In exchange for the loan, China demanded a daily supply of Ghana crude of 13,000 barrels – the entire portion of the Government of Ghana’s share in Jubilee Oilfields – for the next fifteen and half years! The ruling NDC government, which has a majority in Parliament, has agreed to sign the deal.
In these “sweet and sour” deals (sweet for China but sour for Africa), there were additional sweeteners. Infrastructure construction and rehabilitation were to be undertaken by Chinese firms, which would bring in their own workers and materials. And, in the case of Ghana, they also had the first right of refusal to purchase any gas that was captured by the gas infrastructure they were building.
Second, the deals, signed with mostly autocratic African governments, were not transparent and were secured through secrecy, outright bribery, kickbacks, building a presidential palace for Sudan’s despot, donating the blue tiles that adorn Robert Mugabe’s new £7m palace in Harare, a large Namibian presidential palace in Windhoek, and sports stadiums in Congo DR and Guinea.
In July 2008, there was outcry over the China-Niger oil deal. Civil rights groups called for a parliamentary inquiry into the $5bn (£2.5bn) contract and for scrutiny of how funds will be spent. China’s state oil company was given oil exploration rights in Niger in June. “A mining union in Niger said the deal with China took place in the greatest of secrecy and with contempt for regulation” (BBC, July 31, 2008). In Nov 2011, Niger vowed to commission an audit of the Soraz oil refinery being built by Chinese oil company, CNCP, with a capacity of 20,000 bbl/d., after the price tag rose to $980 million from $600 million (Reuters, Nov 24, 2011). Note: The same refinery with the same capacity in Chad cost only $60 million.
In July 2009, Namibian prosecutors began investigating allegations of bribery kickbacks on government contracts with China. One involved a contract to supply Namibia with scanners at security checkpoints. The Beijing-based Nuctech Companies Limited that makes the scanners, was headed until 2008 by the son of Hu Jintao, China’s president. Nuctech is accused of having paid $4.2 million in kickbacks to a Namibian front company (The New York Times, July 31, 2009; p.A4). Another investigation involved a Chinese contract to build a key railroad link as prosecutors burrowed through a web of corruption on deals with China.
