“Let's stop criticizing our banks!”

More than ten years after the subprime mortgage crisis, all the light has not been shed, and yet the idea of ​​the guilt of the banks has taken hold firmly in people's minds. They are even blamed for the double fault, since after playing with fire and triggering the crisis, they allegedly asked for help from the States. This unanimous condemnation, the result of incomplete analyzes, is a heavy component of the bank bashing that has raged since then and unfortunately works against our interests. We are indeed at a critical moment when Europe, faced with the domination of American finance and the dollar, must develop its own financial capacities. The development of a strong pan-European financial sector is therefore essential if we particularly want to foster the emergence of future European gafas. 
If it is vain to hope for the complete disappearance of this bank bashing and, one might say, of the bashing market whose roots plunge both in history and in ignor…

Poverty in Africa: Historical Burden, Leaders and or Snowball Effect?

At the start of the 21st century, sub-Saharan Africa continued to face several serious challenges, rural poverty and high rates of urban unemployment. Per capita incomes have increased only marginally since the 1960s, when most African countries became independent, and the rate of GDP growth is likely to slow, suggesting that incomes will not increase by much. so early. 


Overall, African economies grew on average 3.2% from 1961 to 2002, just above the population growth rate of 2.7%. The reasons for slow growth and poverty in Africa are the source of analysis and debate among economists. Part of the debate centers on the extent to which slow growth is the result of factors that are largely beyond Africa's control, particularly trends in the global economy, geographic realities, and the particular burdens imposed by the history of Africa. Africa or the policies adopted by African governments after independence. Another debate focuses on the extent to which the policies and policy recommendations of major donors, including international financial institutions, could help or hinder Africa's development. Should we then blame the historical burden, the leadership failure and or the debt?

Historical burden

It cannot be used as an excuse, but neither can the slave trade, which has lasted for over 400 years, be overlooked as something that could be seen against the backdrop of Africa’s economic hardship. More than 11 million have crossed the Atlantic while millions more have been sent to the Middle East and elsewhere. This slave trade had a very significant negative impact on the development of the continent. While the settlers brought infrastructure and "education" to Africa, there are, however, no studies carried out to assess its impact. It can be said with certainty that the slave trade left Africa with very low incomes and very low savings rates, a kind of poverty trap, from which we are struggling to escape. We must also note that the colonials had limited budgets in Africa and when governance was transferred to the Africans, the latter had little choice but to submit to the demand of the European elites in order to be able to enjoy the Development Assistance. When the colonists put in place the transport infrastructure, the emphasis was on facilitating the export of products to the sea, instead of promoting economic development and the integration of regions and subregions. 



Leadership failure

Africa's problem may also be due to its governance, which is neither sober nor virtuous. There is a gradual loss of state capacity and in the eyes of the citizens, there is no state, but just a set of institutions. The civil service is characterized by pervasive absenteeism, endemic corruption, and above all widespread politicization. Low-skilled jobs tend to be oversized, and the work of one public servant becomes the work of many public servants. Rulers do not rely on taxes collected, but rather depend on taxes on commodity exports and foreign aid; this is the reason why they are not connected to their population and do not need to meet the needs of this population in terms of economic development. It should also be noted that there is a failure of leadership, because most of our leaders have done nothing but build infrastructure with no return on investment and none of them has managed to lift their country out of poverty. They have only one obsession which is to stay in power. Stay in power with the aim of diverting public funds which they will reinvest in European economies. Would it be less serious if the stolen money was reinvested in their own country?

Snowball effect

The average public debt in sub-Saharan Africa is estimated at just under 60% of GDP. In Senegal, it was noticed that the debt increased between 4% and 5% per year while the growth rate was between 6% and 7% proving that the debt was sustainable. However, debt service increased from 24% to 30% between 2014 and 2017 and absorbs the majority of our tax revenue. This shows that we are carrying a heavy burden of external debt, measured against our ability to repay.

Thirty-two of the 38 countries considered by the World Bank and IMF to be highly indebted are in the sub-Saharan region and typically face external debts that approach or even exceed their annual GDP. Several efforts have been made to reduce Africa's outstanding debt over the years and in 1996 the World Bank and the International Monetary Fund (IMF) launched the Heavily Indebted Poor Countries (HIPC) Initiative. to increase debt relief. The HIPC Initiative includes debt relief by bilateral and commercial creditors, as well as multilateral agencies, which use a special HIPC trust fund to buy and repay debt. The aim is to bring the debt down to a level considered "sustainable" by the World Bank and the IMF. Sustainable debt is primarily debt that represents 150% or less of annual export earnings - at this level, a country is considered capable of making its annual debt service payments. As of March 2004. 23 African countries were participating in this initiative, although several countries with large debts, such as Nigeria and Côte d'Ivoire, were not part of the program.

Sixteen countries in sub-Saharan Africa are classified as being at high risk of debt distress or in debt distress. The remaining 19 low-income and developing countries have low to moderate debt. For middle and upper income countries, public debt remains sustainable below baseline in most cases. However, debt ratios are close to or exceed risk thresholds in a few countries.

It should be noted that the need to repay debts with hard currency repayments from exports took away resources that African governments could have devoted to social investments in health and education and economic development. According to the World Bank, sub-Saharan countries paid nearly $ 12 billion in external debt service on long-term loans and IMF credits in 2002. That is why the crisis was inevitable. 




The French government and French companies play a central role in financing the investment policy of each Senegalese president. French companies are involved in public-private partnership projects, the French government provides funding directly, particularly through its own institutions (such as the French Development Agency) but also through European institutions, the French government also supports the Senegalese government through its influence play in the international community and regional and global financial institutions such as the International Monetary Fund, the World Bank and the African Development Bank. By doing this, French diplomacy and businesses endorse and support the priorities of this government. Senegal's public debt has more than doubled since the current president came to power and was estimated at over 6 trillion at the end of fiscal 2018. This debt is over 9 trillion in 2020. By comparison, between 2000 and 2011 Senegal's public debt only increased by 11%. The populations, do they not risk rejecting these debts as “odious debts” without profit in their everyday life?

Finally Nelson Mandela said: I have often been asked "Who is your hero?" and I answer: I don't choose my hero based on his position. My heroes are the men and women who have stepped up to fight poverty wherever it is in the world.

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