Category: Pan African Highway

African Aid… Is It Really Aid Or Just Makes Us Feel Good??

Mr E4 Comments

African Aid… a study in inefficiency

OK… maybe I am not going to actually do a study… most of my data is allegoric (from stories). But it is a reality that Aid to Africa is not efficient for many reasons that are solvable.

When aid is given with strings attached such as the mandated use of the donor counties personnel or equipment and supplies then it is not aid to Africa it is aid to the Donor Countries’ manufacturing or consulting firms. Expert costs can be triple or even quadruple the cost of the same services in the Donor Countries because of travel, housing (to the donor countries standards) and high salaries of Donor country employees sent to Africa.

I have traveled to Africa frequently and have been in approximately 20 countries in the continent. While Greed, fraud and corruption do exist, it is the cost of goods and services that donor countries provide that takes a great deal of the AID that is supposedly given. Cash sent to most African Countries is subject to redistribution because of other more pressing needs. And sometimes the Strings on the aid have profound negative effects on other parts of the recipient African Countries economy and existing farming or manufacturing enterprises. There is an article in this blog about Namibia and Angola and the Cattle ranching that has been devastated by some of those strings to aid there.

I understand that Donor Countries want to try and maximize benefits to their domestic enterprises when giving aid… but competition for those aid funds can significantly reduce costs and maximize the benefit of the AID to the recipient countries.

Let me move to a different part of this issue… the raising of funds for Aid Organizations. Former President Bill Clinton has stated (paraphrased) that if there was profit to be made in solving global poverty then there would be no global poverty…. But that statement is based upon a false premise… that global poverty can be solved… I am adamant on this.. GLOBAL POVERTY CANNOT BE SOLVED…. Not in my life time… and not even in this century… poverty will always be with us as long as we are a society that functions on money… someone will always be at the bottom of the scale and hence we will always have poverty. This is a fact of life that cannot be dismissed out of hand. (Please note I am not tackling the issue of the measurement of poverty or its definition at this time… maybe later)

What we can do is significantly reduce poverty by revamping and reorganizing the AID that is given and the manner in which it is given.

People think that AID is free… it is not… every aid organization has to raise funds.. that take time, personnel and money… however we can make guidelines on how much of the aid given is actually used for those ongoing fund raising and strategizing efforts as well as the Organizations basic operations and expenses.. For this I am in favor of a sliding scale ranging from 3.5% to 20% depending on the total amount raised per year. This is not include the actual administration of the project (for which I feel not more than 20 % should be allocated to non-resident administration of the ACTUAL Project)

From personal experience:

I have been forming a new NGO (Non-Government Organization) and NPO (Not for Profit Organization) called the Africa Genesis Project. The mission is to “rehabilitate” the sub Saharan “trade routs” in this region. The studies have already been done showing the benefit in trade for the respective countries (a cost benefit analysis). But it does not even begin to show the increase in employment, local economies and the attraction to FDI (Foreign Direct Investment) that would accompany such a project.

The Cost for this is fast approaching 50 BILLION US Dollars. Is that a lot of money?? Yes it is… but in comparison to the 60 Billion dollars in aid for AIDS in Africa than this is smaller and brings more advantages (in my opinion) and allows the aid for AIDS to be delivered more effectively and efficiently to a greater number of people. I agree with the need for AIDS assistance… but I also know that the people of Africa need more.When it costs only 1,000 dollars to send a container to a Kenya Port but 10,000 dollars to take it inland at twice the time and takes 5 days to repair the truck afterwards,… this is an abomination and the extra costs are something the Africans cannot afford.

Roads bring JOBS, and jobs bring economic prosperity and that in turn brings peace and stability to Africa!!!

But how can we raise such amount of funds for the overall rehabilitation of Africa?? If ANYONE expects that Africa can finance this with its current economic situation and with the Debt that it already has, then that person is not fathoming the realities of the condition of Africa and worse is dismissing the prolonged suffering of hundreds of millions of people in Africa. Further it has allowed countries like China to take advantage of this situation to give “no string” loans that continue to exacerbate the problems in Africa.

The ONLY way to really help Africa is one MASSIVE injection of Aid that can transform most of Africa into a productive society. That aid can ONLY come from Governments around the world. That raises a major problem in how to even start such a fund raising effort to implement this project.

My calculations indicate I need 50 million dollars to START this project and 500 Million Dollars to continue to promote and administer the Africa genesis Project over 7 years.

Why so much?? One word answer… POLITICS!!!

I cannot even get an appointment with my own congressional or senate representative in the United States to present this project… and the form in which I presented is not in “proper form” with the relevant brochures and packages needed to promote such a massive project. Multiply that effort with my need to approach the governments of the United Kingdom, France and the rest of the EU, Japan. Australia, Canada, and the Middle East as well as many other countries, (as this is a global issue requiring a global solution) then you start to see not only the massive size of the Africa Project in Rehabilitating these trade routes, but the Global Efforts needed to see it though. And the ONLY way is to hire (at a significant cost) “Consultants” (lobbyists) who can effectively get this project into the hands of those who can make it happen in their respective Governments.

The Africa genesis Project will Guarantee that 96% of ALL money raised for the project will be spent directly on the project and not on fundraising, promotion or administrative expenses of the organization itself. Further that NO Distribution will be to any government organization UNLESS that Organization has actually performed or is performing real work on this roads project. Simply ONLY those actually working on the Road Project will be paid and 80 percent of ALL work must be by Local African Companies and using African employees.

We realize that a lot of Equipment must be purchased for this project. It is expected that Caterpillar and John Deer will receive about 500 million dollars each for equipment and spare part orders… HOWEVER WE MUST be able to negotiate process to reduce costs and maximize benefits to AFRICA. We will NOT tolerate paying even list, let alone OVER list as Caterpillar and John Deer have indicated in my limited discussions with them. The same for every other manufacture and supplier of other equipment, materials and supplies… COSTS will be PARAMOUNT in our vigilance to assure that this work can be done UNDER BUDGET. It is though our “lobbying” efforts that we will make sure that any “strings” attached to the aid given by donor countries for domestic purchases allow us to make bidding and negotiations fair practice in our efforts to supply this project. We cannot allow unfair profits (windfalls) to accrue to anyone on the backs of Africa and its people.

And yes, even I need to get paid, as I am not independently wealthy. So for those of you questioning that, I assure you I am NOT working for free and expect compensation that is reasonable for a project of this size. However I will note that I already know that there are many problems and issues that will need to be addressed on a project this size that will NOT be in the budget … hence my “compensation” will mostly be used for the resolution of those issues and to support the Africa Genesis Organization in its endeavors. Fist Aide Stations, water well drilling, education assistance and the like are just some of those things that are NOT in the Budget for this project and need to be taken care of but NOT from the 96% of the funds that were donated and are to be used ONLY for the Road rehabilitation project as already identified.

If you are a regular reader of this blog you know I have proposed creating a “backbone” infrastructure project that would transverse Africa as well as circumnavigate the Entire Continent, that would end up being approximately 70,000 Kilometers in length. This “backbone would have a 4 to 6 lane modern highway, an Electric Power line transmission, a railroad, and Fiber Optics and Oil and Gas and water pipelines, ALL TO BE FINANCED AND OPERATED BY PRIVATE (non governmental) INVESTMENT. This Investment could approach 1 trillion dollars over 10 to 15 years.

My plans for Africa my be grandiose to some… but a real vision was needed to solidify the continent for economic, and political and peace issues and the overall heath and welfare of the people of Africa… this is my mission… to transform Africa into a place where aid is not needed as much as it is now, and to improve the human sprit of all Africans.

Craig Eisele

Caterpillar Video on the Benefits of Road Construction in Africa

Mr ELeave a comment

This may be a PR piece by Caterpillar for their benefit… nonetheless it is also a good PR piece for those who espouse the Highway building as necessary infrastructure for Africa. Madagascar may be an island but it is the same story on the Continent of Africa.

Click here: 

Caterpillar Madagascar Video

or cut and paste:

http://www.cat.com/cda/layout?m=8703&x=7&f=177263#/madagascar/

Outragous Costs of Domestic transport in Africa Shows Needs that Can Be Addressed by Private Enterprise.

Mr E2 Comments

The two arms of Coega, South Africa’s newest port, extend into the Indian Ocean in graceful arcs. These breakwaters — one is 2.6 km long, the other 1.3 km — are built from thousands of dolosse, huge, oddly-shaped, 30-ton concrete blocks that interlock. They are designed to protect the vessels that, when the port is fully operational in 2007, will use this facility to ship manganese, iron ore and other South African products to China, India and the rest of the world. The government-funded Coega Development Corporation (CDC), which is building an industrial zone on 11,000 hectares of farmland next to the port, likes to think of the massive complex on South Africa’s southeast coast, 20 km from Port Elizabeth, as a symbol of industrial Africa flexing its muscles. “If you want to change lives and the history of this continent, you need to develop infrastructure,” says Vuyelwa Qinga-Vika, spokeswoman for the cdc. “We’re not going to advance if we don’t even have the roads to bring medicine to the rural areas. We’ve got to start building.”

The call to construction is ringing out across Africa. Infrastructure is the new buzzword, pushed by leaders from South Africa’s Thabo Mbeki to Senegal’s Abdulaye Wade. It’s also a key topic at this week’s World Economic Forum (WEF) meeting in Cape Town, where political and business leaders from Africa will meet with heads of some of the world’s biggest companies to discuss, among other things, how Africa’s priority infrastructure projects can boost growth. According to a Gallup International survey commissioned by the WEF, Africans “focus more heavily on economic issues than do citizens in other parts of the world.” One in three Africans fear a failure of the economy compared to just one in five globally.

Despite a commodity boom that pushed growth to 5% in Africa last year, the continent’s leaders want better infrastructure to win more business. The New Partnership for Africa’s Development (NEPAD), an African initiative that aims to lure $64 billion in annual investment by tackling bad governance, ending conflicts and making the continent more business-friendly, has put improved infrastructure near the top of its to-do list. “There can be no meaningful development without trade,” reads NEPAD‘s infrastructure action plan. “And there can be no trade without adequate and reliable infrastructure.”

The need is as obvious as it is urgent. Africa’s roads and railway lines, ports and power grids are neither adequate nor reliable. Outside of southern Africa and Mauritius, much of the continent’s infrastructure is crumbling or nonexistent. Consider the Democratic Republic of Congo. You could fit France, Germany, Italy, Norway, Spain and Britain inside it, and the country is packed with timber and minerals, yet it has only a few thousand kilometers of paved road and 10,000 fixed telephone lines, and produces about the same amount of power as Albania. In other war-torn countries, such as Somalia and Sierra Leone, public buildings have been destroyed by years of fighting. Corruption and mismanagement have left public utilities in places such as Cameroon and Nigeria run down and inefficient.

The lack of infrastructure deters many companies from investing — and drives up costs for those that do. The World Bank estimates that to ship a container from Baltimore in the U.S. to Tanzania costs about $1,000, but to transport that same container from Tanzania to neighboring Burundi costs $10,000. “In many countries, companies have to generate their own power, dig for water, pay heavy distribution and telephone charges,” says David Hampshire, chairman of Diageo Africa, one of the continent’s biggest marketers of beer and spirits. “All these costs add up, and they end up being paid for by the consumer.”

To attract more investment, Africa has drawn up plans to spend billions over the next few decades. Zambia and Burkina Faso, both landlocked, want to build new rail lines through neighboring states to improve their connections to the sea. In East Africa, the Kenyan government and the rebel movement in southern Sudan plan to build a new railway track — at an estimated cost of more than $4 billion — from Sudan more than 1,000 km south to Rongai, Kenya, about 170 km northwest of Nairobi, where it will connect with the existing line to the Indian Ocean port of Mombasa. That notoriously inefficient harbor, along with some half a dozen others around Africa’s coast, is set to undergo a massive expansion and modernization program over the next few years.

The next decade may also finally see the completion of the Trans-Saharan Highway from Algeria to Lagos, Nigeria. Equally bold is the West African Gas Pipeline, which will tap natural gas from the Nigerian oil fields in the country’s southeast and then run almost 700 km along the coast with links to power plants in Lagos, Benin, Togo and Ghana. The most ambitious plan is for a massive dam on the lower Congo River which would eventually produce more than twice the power generated by China’s controversial Three Gorges scheme — enough to sell electricity across the continent as well as export it to Asia and Europe. But that project is at least 20 years away.

Surprisingly, funds for new projects aren’t lacking. Africa’s richest countries are eager to build. South Africa’s government, for instance, is funding the new Coega port and industrial zone. “Private business is not too keen on putting money into infrastructure, so the government has said it will take the lead,” says Lionel Billings, manager for Coega’s enterprise development and investor interaction. Rich donor nations in the West often help finance schemes in poorer countries, as does the World Bank. A growing number of private and foreign government-backed infrastructure funds based in Europe and the U.S., such as AIG African Infrastructure Fund and New Africa Infrastructure Fund, are also supplying capital.

The problem is confidence. Financiers, whether private or public, need projects that they can rely on. “We’ve got liquidity we’re embarrassed about,” says Keith Palmer, chairman of the London-based Emerging Africa Infrastructure Fund and vice chair of the U.K. investment bank NM Rothschild & Sons Ltd. “But there’s a lack of well-structured, creditworthy opportunities.” Business leaders cite numerous hurdles to investment: corruption, political instability and African governments’ lack of capacity to run huge projects and reluctance to hand over control of projects to the private sector. Richard Laing, chief executive of the Commonwealth Development Corporation, Britain’s agency for investment in the developing world, says the problem is dealing with African governments which have “an unwillingness to let go and a lot of distrust.”

There’s also a catch-22: Africa needs investment and improved infrastructure to develop, but finds it hard to attract the capital such projects need without more development. Thormählen Schweisstechnik, a German company that last year won the right to construct and operate for 25 years the planned railway line from Southern Sudan to the Kenyan coast, is already running into problems with the Kenyan government. Klaus Thormählen, head of the company, says, somewhat euphemistically, “the decision-making process [does not] maintain its dynamics during the times of our absence.” A spokesman in the Kenyan President’s office says that Kenya backs the scheme and is working with the German company to make sure the line is built.

Back at Coega port, a huge crane lifts another concrete block into position. The dock area, which was constructed behind a dam wall, has now been flooded, and is awaiting its first ship. “One of the things that will make it meaningful for South Africans is to see the first businesses set up here,” says Qinga-Vika. “It may just be concrete and steel and new roads, but this is a symbol of hope that we’re doing something to turn this city and continent around.”