Off to Africa

Break's over.

I will be blogging exclusively from Africa (Ghana and Tanzania) beginning sometime in mid-September. Although I will try to keep my fingers in the FSU and Europe (and sometimes comment on the increasingly bizarre American political discourse melt-down now dominated by gun-toting right wingers), it is likely that I will begin to discuss the foreign assistance picture in Africa.

I have mentioned before that I believe that small scale, private sector assistance may be the better approach in Africa rather than the large scale - and not very cost-effective - USAID, EU and World Bank interventions. However, foreign aid assistance in Africa is not an either/or scenario, but rather one where the two approaches need much more coordination and collaboration. Hopefully, I'll be able to get a better handle on the two approaches during the next year.

In the meantime, blogging will be exceedingly light as I head to the US.

Obama in Ghana

Since I am on my way to Ghana again I've been following the progress of President Obama to that West African country.

At the G-8, agricultural growth in Africa was one of the primary targets of the participants and resulted in a commitment to allocate $20 billion to Africa. Leaving aside whether these funds will ever make it through the bureaucratic systems in individual countries of the G-8, this type of aid needs to be re-directed. The G-8 appear to have recognized that the policies of aid supply to African agriculture have not produced the expected results over the past 20 years, and have actually harmed local farmers. It is about time that agricultural aid is recognizing that the focus should be on helping farmers help themselves rather than attempting to impose non-indigenous concepts. So far, so good.

Yet, as President Obama correctly emphasised that each country must, in effect, help themselves, nothing in agricultural aid will produce the results necessary without a significant reduction in farm subsidies in the US and, more importantly, Europe. Given European agricultural policy, such a reduction is politically impossible.

The other aspect of agricultural reform in Africa is the slow rate of land tenure security. Agricultural reform will not be successful unless farmers have clear tenure over their land. This is a major problem in Ghana, for example, as the growth of cities is exponential - and is not due to population increases but rather an exodus from the rural areas into cities. Local chiefs, the true power in Ghana, are in some areas literally giving away land to get people to stay. But the legal system established to secure tenure is inefficient, expensive and corrupt. Although huge sums have been and will be spent in Ghana by the World Bank and USAID to improve tenure security and improve agricultural policies and practices, they have so far been unsuccessful.

There are many reasons for the slow rate of success in land tenure security, including a highly bureaucratic system and central government/chief rivalry, but until significant movement toward secure tenure is achieved, agricultural growth will remain slow and intermittent.

Hiaitus

I haven't posted for about a week. I'm wrapping up my work in Ghana - which involves considerable pandering and report writing. Wheels up Friday night to Kyiv. Then perhaps to Bishkek. Definitely to Moscow to see what's up and then perhaps to Vienna. Hope to stop at Askania Nova in Ukraine (good place to go to see the steppe as it existed 3000 years ago). Will get back to acerbic comments next week.

Thought for the week - on US politicos - Michelle Bachmann is a dope...your constituents who voted for you should be embarrassed. Is it possible for GOPers to be embarrassed? Oh, yeah...

Second thought for the week - is Tymoshenko a lock in the next election?

Next stop Kyiv.

SME Development in Ghana

The Daily Graphic (no link available) in Accra reported that the University of Ghana Business School had launched a unit for an Enterprise Development Service to help SME owners and operators to improve managerial skills and "become more business oriented". It is intended to link the public and private sectors to find solutions to the problems faced by SME's.

For Ghana, this is an important development. In Accra, merchants set up kiosks everywhere selling fruit, carvings, plastic furniture and anything else that can be sold. The news does not report whether there will be any follow-on support. I hope the IFC, which funded the start-up of the program, has a plan for sustainability and support to new entrepreneurs. The news article does not say, but a program to monitor and provide follow-on assistance would be an important aspect of any SME program.

Another question is whether this program can or will be coordinated with an overall economic development program. A serious problem in Ghana is the fragility of the land tenure. Indeed, the growth of slums is alarming as the urbanization of the country accelerates. One "city" of approximately 300,000 was not even recognized on a map until recently. Land tenure is very weak, to say the least. Consequently, potential entrepreneurs cannot use their assets to obtain any credit to start, much less grow, a business.

The linkage of the type of training now offered by the business school of the University of Ghana with other needs is critical to its success. It would be a pity if the training resulted in a brain-drain or inability to put those skills to use.

Ghana's land reform struggle - losing the battle?

In 1997 I first came to Ghana on a short mission for the World Bank together with two experts in urban planning and title registration respectively, to try and find out where the land reform program had jumped the track. Ghana had been the shining star of West Africa for the Bank, but the failure to rapidly provide secure tenure to ordinary Ghanaians, and especially the poor, via a much vaunted new title registration system was disturbing, to say the least. There are few things more important to economic growth and reduction of poverty than land reform.

We interviewed all the usual suspects: government representatives, bank official (accesss to credit which land ownership provides), urban planners and lawyers. We wrote a report. Apparently, no one listened because when I arrived here at the end of January this year I was presented with virtually the exact set of problems we had identified more than a decade earlier. Incidentally, the land market reform program intitiated by the Bank was known as Urban I. Urban V - or VI (I need to check on this) is the latest iteration.

Ghana has received more than $750 million in aid from the Bank alone in the past 20 years. A significant portion of that was sunk into resolving land tenure issues. The poor have no cash. But they have assets. It's the frozen capital described by Hernando de Soto in "The Mystery of Capital". Give the poor tenure and unfreeze the capital so that the poor can escape the informal sector. That's the theory and I happen to agree. So what has gone wrong in the past twelve years that has in many ways witnessed rather large sums of money have rather minimal effect? Why are slums growing on average of 3.5% a year in Africa? This is an accelerating train wreck and the solutions will only be more painful as time passes without a better approach. To be continued...

Hiaitus Over...

Spent the weekend preparing a presentation on urban development in Ghana which I managed to finish on time and deliver on Monday. Follow up questions ensued at the conference today. It's now over and I have begun to review what has been going on in the world - with the G20 and elsewhere, including the torrent of news generated by Russia and President Obama's visit to Europe. Everyone else on this blog was also gone - our MENA contributor to Canada, another from Azerbaijan in Ukraine and the third in Central Asia figuring out US State Department forms.

So much for the excuses...we are back and I want to talk about the long, slow-motion train wreck of land tenure reform in Ghana coupled with the explosion of urban slums and why this is happening, Russian needs, dreams and demands and IMF lending practices.

If anyone noticed, by the way, the end of any independence movement in Chechnya died with the assassination of the last opposition leader in Dubai (the whereabouts of his brother is unknown - a circumstance he is likely to maintain).