Wednesday, December 18, 2013

Revaluing Africa by accounting for natural capital

Travis Noland in Triple Pundit: At last, Sub-Saharan Africa is making headlines for reasons other than war, disease, humanitarian crisis or corruption. Registering seemingly inconceivable GDP annual growth rates – ranging from 6-12 percent – while the rest of the world has been bogged down by a global recession, countries from Nigeria to South Sudan are now discussed as serious players in the global economic conversation. As I argued nearly a year ago, the continent is now home to some of the most promising investment opportunities in the coming years. There is no doubt that Africa has achieved significant progress in recent years, but could we be deceiving ourselves by relying too heavily upon these all-conquering measurements for economic growth?

The first-ever World Forum for Natural Capital in Edinburgh, Scotland, unveiled the full story behind these numbers. As UK Shadow Minister of the Natural Environment and Fisheries, Barry Gardiner explained, “GDP has become a con imposed on developing countries by an economic system that regards ecosystem services on which they rely as mere externalities.” According to Gardiner, some of our world’s poorest countries only receive up to 30 percent of the real economic value of natural products like timber.

Who would sacrifice 70 percent of prospective value and why on earth would they do it? The examples are plenty and the reasons many. For decades, government leaders in Zambia have considered it a worthy trade to hand over it’s copper mines (which account for 80 percent of the country’s foreign exchange earnings) to irresponsible Chinese mining operations in exchange for infrastructure development. Similarly, Malawi – one of the few countries in Sub-Saharan Africa that is successfully feeding itself – has demonstrated its willingness to sacrifice agricultural land (responsible for 90 percent of it’s GDP) by cultivating sloped, escarpment land that should legally be forested to prevent soil degradation in order to export more tobacco, tea, cotton, coffee and sugar.

...The sad truth is that Africa is trading it’s bright future for quick, short-term growth. Yet in this sense, is Africa any different from the majority of publically traded companies who sacrifice their own long-term viability for the sake of Wall Street’s quarterly reports?...

A photo by J. Collomb of a log transport in the Central African Republic, posted by WRI Staff, Wikimedia Commons via Flickr, under the Creative Commons Attribution 2.0 Generic license

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