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A waterfall on the Blue Nile in Ethiopia
A waterfall on the Blue Nile in Ethiopia. Photo via Unsplash

President Donald Trump has instructed U.S. Secretary of State, Mike Pompeo to pull back from a commitment to provide $100 million in security related aid to Ethiopia, a leading developing nation on the African continent. According to the New York Times, the State Department indicated this would be a “temporary pause” on some aid in response to “Ethiopia’s unilateral decision to begin to fill [its] dam before an agreement was reached…” This action by the Trump administration is more than an outrageous encroachment of Ethiopia’s sovereignty. It is an assault on the right of emerging nations to take actions to improve the living conditions of their people.

In response to the decision by the State department, Eyob Tekalign, Ethiopia’s state  finance minister said correctly, “We don’t think that the U.S. has thought this through carefully…We are hopeful that they will reconsider because Ethiopia is doing what is absolutely right and in all senses of the word legally, morally as well.”

The Ethiopian people have funded the $4.6 billion Grand Ethiopian Renaissance Dam (GERD) themselves. This fulfills a bold vision to develop their nation with the 6,200 megawatts (MW) of electricity that the dam will generate when completed. Ambassador Fitsum Arega aptly expressed the desire of the Ethiopian population, when he tweeted, “we will pull Ethiopia out of the darkness,” which is literally and metaphorically true.

Trump’s Bias

All indications are that President Trump acted on the insistence of Egyptian President el Sissi, who has claimed “historical rights” to the Nile River. In truth he is asserting “colonial rights” to the Nile bestowed on Egypt by the British Crown.

At the end of 2019, at the request of President el Sissi, President Trump instructed U.S. Treasury Secretary Mnuchin to act as an independent broker in discussions with Sudan, Egypt, and Ethiopia. Over four months, several meetings of the three Nile riparian nations were held in Washington DC discussing the “fill rate” of the GERD. There are legitimate concerns about how much water would be withdrawn annually in the next several years to fill the GERD’s reservoir of 74 billion cubic meters (bcm) of water. Technical issues like the rate of which water should be withdrawn from the Nile to fill the reservoir should be resolved by the three nations with the understanding that a functioning GERD will benefit all the people living in the Horn of Africa.

The heavy rains at the beginning of Ethiopia’s rainy season this summer have already filled the GERD with the required 4.5 bcm of water to test two turbines. This was accomplished without any reduction in the flow of the Nile.

As the tripartite discussions, with the US Treasury and World Bank in attendance continued into February 2020, it became clear that the US was “putting its thumb on the scale” for Egypt, in the words of retired US Ambassador David Shinn. By the end of February, Mnuchin secured an “agreement” regarding the Nile with Egypt, without the participation of Ethiopian representatives.  On February 28, 2020, an official statement from the US Treasury Department praised Egypt’s “readiness to sign the agreement,” and instructed Ethiopia that “final testing and filling should not take place without an agreement.” 

Eventually, the unresolved issue of the Nile shifted to the proper venue for African nations to settle disputes, the African Union. The dialogue has continued under the personal supervision of South African President, Cyril Ramaphosa, Chairperson of the African Union.

The GERD is built in Ethiopia on the Blue Nile River, which supplies 85% of the Nile when it joins the White Nile north of Khartoum, Sudan

Bringing Africa Out of Darkness

What President Trump does not understand; is that his “pause” in aid is not only harmful to Ethiopia, but it is detrimental to the entire African continent. Whether he is aware of it or not, is establishing a dangerous precedent in foreign policy, and not just for Africa.

Ethiopia, with a population approaching 110 million, has made a commitment to eradicate poverty. To that end, Ethiopia has embarked on erecting significant infrastructure projects in roads, railroads, and hydro-electric dams. The GERD has the potential to generate over 6,000 MW of power, doubling Ethiopia’s present capacity, and placing Ethiopia only second to South Africa in energy production in sub-Saharan Africa (SSA). Ethiopia would also become an energy exporting nation potentially providing electricity to neighboring South Sudan, Sudan, Kenya, Somalia, and Tanzania.

The root cause of virtually every crisis that African nations are facing today, including ethnic conflicts, can be traced to underdevelopment. This is especially true when one examines the dearth of hard infrastructure in SSA with a population nearing 1.5 billion that is projected to reach 2.5 billion by 2050. Electricity for SSA is estimated between 100,000-130,000 MW. This level of output is criminally deficient for a population over 1 billion, with 600 million Africans having no access to online electricity. The lack of electricity is literally a death sentence for millions of Africans.  

Without abundant and accessible electricity Africa will not progress at the level necessary to provide for its present, much less its expanding population. Energy is the sine qua non for economic growth, and to eradicate poverty. It is required for; agriculture, producing fertilizer, pumping water, cleaning water, transportation, lighting hospitals, vaccine production and storage, shipping food in refrigerated cars, powering industry, constructing and lighting modern homes, schools and libraries. For Africans to enjoy the same access to electricity 24×7, as we experience in modern nations, Africa needs a minimum of 1,000 gigawatts or 1 million megawatts of electricity.

 

 

What Roosevelt Would Do?

Rather than being threatened with cuts in aid, Ethiopia should be supported in its bold efforts to build and operate the GERD. A thoughtful US policy would be assisting all African nations in addressing the enormous multi-trillion dollar infrastructure deficit, with long term-low interest loans to finance massive investments in life saving infrastructure. Instead of President Trump and his advisors hurling geo-political condemnations against China, it would be far better for the US to join China’s Belt and Road Initiative, which is building vitally necessary infrastructure in Africa and around the world.

Both the Democratic and Republican Party, including President Trump himself, from time to time utter fond references of President Franklin Roosevelt. However, I have found that no leader in either party has any comprehension of the genius of President Roosevelt’s economic policies. FDR as he is known, understood the importance of infrastructure. This was abundantly evident in his New Deal, his creation of the Tennessee Valley Authority (TVA), and his Good Neighbor policy.

During the war he sternly reprimanded Winston Churchill for his imperialist policies in Africa. FDR treated the King of Morocco and other African leaders with the respect he would treat any national leader. President Roosevelt intended to end the Europe's political and financial control in the world.  I can assure you, that President Roosevelt would have championed and aided any developing nation that embarked on energy production.

Sadly, in the seventy-five years following the death of President Roosevelt, the only President, who had shown enthusiasm for the economic development of Africa, was John F Kennedy.

Let the Trump administration pause to rethink a policy that not only violates Ethiopia’s sovereignty, but undermines a strong US ally in East Africa. Let us recognize Ethiopia’s endeavors to improve the living conditions of its citizens, and pause again to ask, how would President Franklin Roosevelt respond.  His TVA harnessed the power of the mighty Tennessee River generating electricity to transform the lives of millions of poverty stricken Americans living in seven undeveloped southern States.  Is it not in the strategic interest of the US to support nations working to eliminate poverty in Africa using Rooseveltian methods?

 

Lawrence Freeman is a political-economic analyst for Africa who has been involved in economic development policy for thirty years and a former civilian advisor to U.S. Africa Command. He is the creator of the blog lawrencefreemanafricaandtheworld.com. The opinions contained in this article are his own.

Abiy Ahmed Prime Minister of Ethiopia
Prime Minister Abiy Ahmed of Ethiopia has called for debt relief for African nations in light of COVID-19.

 

Ethiopian prime minister Abiy Ahmed has made a bold call for debt cancellation for low-income countries. Abiy is correct, debt cancellation is absolutely necessary to save lives and for developing nations to survive the COVID-19 pandemic. To compel a nation like Ethiopia to spend almost half of its revenue on debt service while its people are suffering from a perfect storm of desert locust swarms, food insufficiency, and a weak healthcare infrastructure is immoral.

Abiy laid out a compelling case for debt relief in a recent opinion piece published in The New York Times, “Why the Global Debt of Poor Nations Must Be Canceled”.

“At the very least,” he writes, “the suspension of debt payments should last not just until the end of 2020 but rather until well after the pandemic is truly over. It should involve not just debt suspension but [also] debt cancellation [...] These steps need to be taken with a sense of urgency. The resources freed up will save lives and livelihoods in the short term, bring back hope and dynamism to low-income economies in the medium term, and enable them to continue as the engines of sustainable global prosperity in the long term.

“In 2019, sixty-four countries, nearly half of them in sub-Saharan Africa, spent more on servicing external debt than on health. Ethiopia spends twice as much on paying off external debt as on health. We spend 47 percent of our merchandise export revenue on debt servicing. [...] The dilemma Ethiopia faces is stark: Do we continue to pay toward debt, or redirect resources to save lives and livelihoods?”

Abiy’s analysis of the urgent need for the cancellation of debt service is relevant to the exacerbating effect of COVID-19 on Africa’s rising food insecurity.

 

COVID-19 Worsens Food Crisis

From March 30 to April 30, COVID-19 cases in Africa rose from 4,760 to 37,296, an 800 percent increase, and the total number of deaths from 146 to 1,619, a 1,100 percent increase. Experts are legitimately concerned that millions more may die from hunger and poverty as a result of the efforts needed to reduce the spread of COVID-19. Closing borders, stay-at-home orders, loss of income, interruption of supply chains, and disruption of traditional animal migration cycles contribute to food insecurity.

The World Food Programme (WFP) projects that the number of people facing acute food insecurity could rise from 135 million to 265 million in 2020 as a result of COVID-19. According to the WFP, five of the countries that had the worst food crises in 2019 were located in Africa: Nigeria, Ethiopia, Sudan, South Sudan, and the Democratic Republic of the Congo.

 

People queue to receive food during a distribution organised by the local Muslim organisation Ghous-e-aazam Welfare, in the Kwa Mai Mai area of the Johannesburg CBD, on May 5, 2020 as the country fight against the spread of the COVID-19, t
People queue to receive food during a distribution organised by the local Muslim organisation Ghous-e-aazam Welfare, in the Kwa Mai Mai area of the Johannesburg CBD, on May 5, 2020 as the country fight against the spread of the COVID-19.

 

A New Financial Architecture Required

While debt cancellation is essential, international and federal mechanisms are required to create new lines of credit to build up countrywide advanced healthcare infrastructure, which all African nations lack. This endeavor should be part of a much larger undertaking to place African nations on a path to become developed industrialized economies. Trillions of dollars of new credit must become accessible for African nations to address the dearth of infrastructure in energy, transport, and healthcare that is killing Africans every day. Successful transformation of African nations requires an urgent focus on nurturing combined manufacturing-agricultural processing industries.

Speaking at a Johns Hopkins webinar on April 22, Gyude Moore, former Liberian minister of public works (2014–2018), emphasized that creating manufacturing jobs is essential to transitioning to a more developed economy.

What has been glaringly brought to the surface by the combined COVID-19 pandemic and the malnourishment of Africa’s population is that the global economic-political system of the past five decades has failed. A new financial architecture is compulsory to save lives and put civilization on the trajectory of progress. This new financial architecture should encompass the following essential missions in Africa:

1- Cancellation of debt

2- New credit generation for physical economic growth

3- Massive investment in hard infrastructure

4- Urgent mobilization to establish modern health infrastructure

5- Significant upgrading of manufacturing and agricultural sectors

 

There is no equivalency between servicing debt and safeguarding human life. Money really has no intrinsic value.

 

It is unacceptable in the twenty-first century for every nation not to be equipped with advanced modern health infrastructure. One of the most egregious defects of globalization is that nations have become dependent on imported food because it is somehow construed to be cheaper than producing food at home.

Nations exist to foster the continuation of a human culture moored to the conception that human life is sacred. There is no equivalency between servicing debt and safeguarding human life. Money really has no intrinsic value. Banks are mere servicing bureaus of an economy. Governments legitimately create credit to generate future physical wealth to benefit their citizens. When borrowing or lending arrangements fail to benefit society, then they should be restructured or cancelled. Such financial reorganizations have been achieved many times throughout history.

Prime minister Abiy has brought to the attention of the world a profound underlying principle that should govern all national and international policy: the promotion of human life is supreme; monetary instruments are not.

 

Lawrence Freeman is a political-economic analyst for Africa who has been involved in economic development policy for thirty years and a former civilian advisor to U.S. Africa Command. He is the creator of the blog lawrencefreemanafricaandtheworld.com.

 

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