Charade Bailout Tanzania Style!

When the US government discovered big holes in its ailing economy (thanks to underworld business by greedy corporates) it invented bailout. Economists still fiercely differ on this. On the one hand there are those that take it as a smart move aimed at keeping the people in the main street afloat. On the other hand there are those that look at bailout as sinking tax payer’s money to the hole. When one looks at the reasons they offer, they all seem to be right.

But again, logically, one thing makes sense. First of all, the US and other affluent countries have enough financial muscles to take on this. Secondly, the manner in which the bailout is conducted in some areas convinces: there can be romp in soon thanks to the signs the US economy is currently showing. Thirdly US caused this calamity to the rest of the world. Thus it deserves to do something about it even at the world level. Fourthly, greed and selfishness being the engines of capitalism as well as the bombs (as of now), there was no way the US would sit idly by and evidence its children dying of the disease it cultivated. It had to reap the benefits of its system as well as stand by when things go wrong.

So the first thing to do was to take on greedy CEOs who offered credit generously knowingly this irresponsibility would backfire. Their gargantuan emoluments like golden parachutes, salaries and the likes were practically abolished or slashed. To make sure that these crooks do nary get away with it, the government purchases some shares in affected firms so as to ultimately-for some-own them.

Currently AIG and General Motors or Government Motors as it is joked, are under government watch as it becomes the holder of majority shareholder of the restructured company, with 60% of the stock. To make sure the crime is not repeated, White House receives briefings on economy almost everyday among which is the state of the bill of health of bailed out firms. This way, the government is doing business to see to it that taxpayer’s money is not swindled.

Recently, Tanzania ’s government blatantly proposed bailout measures to her all-time-sick economy. This move sounds smart. Nonetheless, it’s already been seen as charade aimed at stealing taxpayer’s money. With rampancy of stinking corruption in the upper echelons of power, one can comfortably predict its end- it’ll end up a cropper as it morosely digs more menacing holes on the already moth-holed economy.

One thing to remember, this is the same government that stupidly nationalized almost everything especially profit-making gung-hos Nyerere found after felling them and proving to be shoddy as far as business is concerned. Sadly by relegating back to business, this means: privatization is a hoax or much bigger mess should be xpected.

Let me prove my point. Tanzania secured a loan of over 1/-tn to bail out her economy. Amazingly, this amount is a debt whose interest rate is 11%. The good government in Dar es Salaam is planning to loan the same to some unspecified companies at the interest of 2%! Reasoning and reality have been given a heave-ho of a sort! Who will pay generously forgiven 9%? Monkey business of course!

If this megalomania is not stopped, Tanzania's economy will be ruined even more under the pretext of bailing it out. How should it stop crumbling if loans are sought to be abused as the case in point? Renowned economist Professor Ibrahim Lipumba and opposition MPs queried this and termed it as flapdoodle that needs a courage and heart of the mad to commit. He said, “I am getting some feelings that this plan is going to be like a crash programme. Normally crash programmes are implemented without adequate preparations.” Lipumba added, “I listened to President Kikwete’s address …. and also read the speech budget. I could not find anywhere where an ordinary farmer is mentioned as far as the stimulus package is concerned.”

Despite warnings from experts, as usual, like a wise monkey that sees, hears and does nothing, Dar is still hell bent to go on with this buffoonery! Before thinking about bailout, it would have been wise to tackle the root cause-graft and lack of fiscal discipline and vision. The same government that’s chest beating is sitting on mega million scandals! Without combating graft, poor and begging countries will be attempting suttee in the name of bailout. For, in the end, the money aimed at bailing economy out will bail out thieves and crooks in power.

For long, Africa ’s economies were marginalized from the rest of the world so as to be nicely exploited. The prices of our produce have been low and there have nary been equal terms in the so-called international trade since in flag independence. Our countries are run by straight-jacket policies tailored abroad and supervised by puppets not to mention strings attached to the prescription vending international agencies such as World Bank and IMF.

What’s more, African economies still largely depend on those of rich countries on top of our governments’ lack of vision and mission. Though this dependence is superficial, it affects them verily. Africa still spends much needed money on unnecessary military undertakings. If African rulers that make us believe: they mean to save our economies were sincere, the first right thing to do would have been to dwindle the size of their armies and governments.

Another sensible thing to do would be embarking on narrow-and-straight fiscal policies. Instead of depending on and loaning from WB and IMF, African experts in this area should be consulted and their expertise be heed and exploited. Will the West allow this? To avoid going on being caught in their nests, Africa needs to embark on home made policies based on African culture, values and aspirations-self respect and abhorring dependence.

What does this mean? Africa is an unregulated free market for the world. Many substandard goods enter Africa everyday. Many unnecessary items such as expensive oil guzzlers are preferred by African crooks in power. Africa’s agricultural sector is forgotten. Efforts are directed towards vending and trading left resources at throw-away prices that makes sense only to ten-percent-charging thieves in power. This forces Africa to import.

In other countries, IMF-WB’s policies have ruined the countries so as to depend on donors even on food. Without feeding oneself, one can not forge ahead. To do away from current economic crises and poverty Africa needs to think about feeding herself as the step towards fully emancipation. Without doing this, all is good for nothing. In such a debacle can we make it without planning and manning ourselves really? The recipe number one to thwart this is tackling graft at all levels and by all means.

Moreover, our good-at-aping rulers tell us: bailout is an in-thing for the rejuvenation of the economy, thanks to American invention. America did not award money to greedy CEOs or dish out money to the loss making companies. Instead it bought stakes in these companies and put them under government watch to see to it that taxpayer’s money is returned. Indeed, wherever there is a clean and sensible government, this is the surest way of combating embezzlement and corruption even aiding economy to recover.

In a nutshell, bailout African style will ruin our ICU-based economies. We need good governance and empowerment of our people in place and responsible governments accountable to their people. Economic crimes especially involving embezzlement of public money should be categorized as crimes against humanity. Otherwise, this charade we saw aimed at economic bailout is yet havoc to the continent.
Source: The African Magazine July 1, 2009.