The Supply Chain Africa Needs | Hacker News Reader

The Supply Chain Africa Needs

theprepared.org

70 pointslongdefeat29 comments

The big issue for many African countries is that their trade flow is still configured to suit colonial trade flows. Port cities situated on the coast optimized to trade outwards, maybe connected by a few roads or a moribund colonial era rail to a resource extractive region in the interior. The issue though is that this prevents intra-regional trade, which is the dominant form of trade for North America as well as Eurasia, and which helps to facilitate viable regional economies.

Infrastructure is the first part of solving this puzzle. In East Africa in particular a lot of focus has been put on creating modernized rail systems, the construction of new modern freeways, and in particular with the EAC(East African Confederation) a strong focus on harmonizing business laws and trade regulations through the region. Movement is also being made on enacting the AFCTA (African Continental Free Trade Agreement) as well, which would construct a continental sized free trade market area, and help to smooth trade between the countries of the continent.

In reflection on the West African examples shown in this article, it reflects on the need for ECOWAS (West Africa's form of the EU) to move forward on becoming a serious supranational organization that gets tougher on business harmonization and regional economic integration. It has done exceptionally well on ensuring that freedom of movement is possible between the 15 states within its union but has stagnated since then. It is in great danger of staying a bored lame talking shop of corrupt enfeebled bureaucrats who ignore corrupt governments and repression, and do nothing to foster actual growth.

I am quite optimistic of the future though on the whole. The whole continent won't lift off, but enough countries are on the right trajectories towards becoming middle income countries.

The ports are rather important though. The Box is an excellent book showing how standardized containinerd revolutionized trade.

In developed countries the containers are multimodal: port/rail/transport truck

The oceanbound part is the cheapest. Without modern container ports it is very difficult to prosper.

Internal trade is also important, but I think your disregard for the ports is misplaced.

On the contrary, I love ports and they are very important. But I find in African policy and business circles we overhype our ports and port cities, and forget that there is a huge world of development that needs to transpire beyond them.

It’s been a hugely busy decade in terms of port modernization in East and West Africa in particular, this report really gets into it if you like reading Port stuff.

http://www.globalconstructionreview.com/sectors/africas-port...

Oh definitely. The reason container ports matter is that they're part of a seamless intermodal network. So you do need the land half as well.

As an african living in the states. I will say for development to take place in Africa - it needs dictators, not blood thirsty dictators but development driven ones. Hear me out:

1. Laws in Africa need to be simplified at the moment it's mostly common law from a colonial past.

2. Have a tax friendly system i.e reduce all taxes on local raw materials and unfinished goods are home based i.e trace origin to any African countries

3. How would a dictator solve this: Cutting unnecessary layers of bureaucracy that encourage corruption i.e the #1 problem in Africa

4. Preferably the Dictator(s) be homosexual i.e less likely to be corrupt as chances they won't have kids and therefor not driven by family needs. I double on this even as a straight black guy.

5. Make education free

6. Limit imported luxury goods i.e Mercedes that are so loved by politicians by taxing them heavily like Singapore does

7. Have a simple building code e.g All buildings less than 7 storeys to be built of wood. Encourages development faster plus enables countries to have sustainable forests. Deforestation and Global warming a big problem in Africa atm.

8. Encourage immigration of skilled foreign nationals by giving tax breaks e.g 10 years. We know humans learn best from other humans. See your colleagues.

See, common law somehow worked for UK and US, but apparently is not applied constructively in some African countries with British colonial past.

I'd say that bribery "for the family", and building government structures that facilitate bribery, is a part of culture, of what is seen as normal and proper.

Changing that seems to be the key to economic success.

So I very much agree with making education accessible (and elementary education must be free and lavishly dispensed on anyone needing it). I also agree with inviting highly skilled people from everywhere, so that their work culture could be emulated and built upon.

Bribery can be overthrown with a concerted effort. There is an example of a small country named Georgia (not the US state), where corruption was utterly widespread and deep. They have mostly eliminated it. They had to take on some drastic measures, though, such as firing 100% of their traffic police, and even building police stations with glass walls, so as to make attempts at corruption inside them hard to conceal from onlookers.

> See, common law somehow worked for UK and US, but apparently is not applied constructively in some African countries with British colonial past.

> I'd say that bribery "for the family", and building government structures that facilitate bribery, is a part of culture, of what is seen as normal and proper.

> Changing that seems to be the key to economic success.

This was previously a core part of UK and US culture, and is still popular with some atavistic types.

The problem with good Dictators - and dictatorships... is a good one is one step away from dying to a bad one.

Including being murdered.

Hurdles everywhere you look. Too much barriers and tariffs on imports, too little enforcement of rules, too much uncertainty with logistics and politics and occasionally, threat to life, money, and product.

Governments have long had to walk the balance between protecting domestic industry, raising revenue, supporting entrepreneurs, benefiting from globalization, and protecting foreign states and other external parties from exerting too much influence. It's not sensible to place high tariffs on products for whom domestic production is minuscule and unlikely to be competitive, and which enable a value-added product to be made domestically instead, but political and economic desperation can enable this shortsightedness.

One can look at Brazil to set realistic expectations. It shows what happens when a large country full of potential institutes a scheme of extreme protectionism, and that the struggle with vast inequality and dysfunctional politics frequently cause issues for people and industry, despite the outward rule of law. But it also sets an aspirational note for progress in trade, innovation, and quality of life.

The other issue is the role of direct foreign investment. Changing economic realities and political backlash against the taste and legacy of colonialism have made western states less likely to invest in Africa. China has been eager to capitalize on this, much to the concern of western strategists and journalists. These days, China is rethinking the debt load and shelving many projects, but the geopolitical concerns remain. Nonetheless, China built and operates ports, railways, schools, apartments, and factories. These are tangible infrastructure that sticks around even if the institutions around them change. And infrastructure is a prerequisite of delivering reliable institutions.

Our startup, which optimizes products for specific geographies by time, hosted a talk show in Melbourne where some speakers from Africa (Kenya and Nigeria) emphasized that it's not that Africa lacks resources. It's just that they don't have the correct resource at the right time at the right place.

We do that for first world countries but breaking into Africa or unknown third world countries is out of reach for most startups.

>Some of the options of such policy could be: Relax duties and import tariffs on electronic components...

Yeah but much better would be to just drop duties and tariffs completely like Hong Kong or Singapore. Then instead of having to bribe some port official to release you things you could just ship direct without the officials. Of course this might have a side effect of making places rich like Sinagpore rather than mucked up like Africa but maybe they could live with it.

And this is for four countries with large sea ports. I can't imagine how the interior countries get out of this mess.

I'm torn between admiring the tenacity of people trying to manufacture anything in a totally broken environment and wondering why they don't just leave.

The problem is that in order to emigrate from where they are (third-world / developing) to another country (likely first-world / developed), they would need to move on one of these visas: (a) student (b) worker (c) family member of someone already in said country.

(a) requires a substantial financial outlay, (b) requires a job offer AND visa sponsorship from a hiring company and (c) is probably easiest but requires a family member to be already present in the country with a solid visa status.

Provided your country is not inherently inhospitable to life, which in this case it isn't, I think it is reasonable for people to have a degree of national pride (in addition to numeric reality of emigration: only so many can go).

Because that's all you have ever known. Watching TV or documentaries of cushy life seems sci-fyi or something that you dont't think about too much just like watching star wars doesn't make you colonize other planets.

Because the First World is doing its best to keep people out of it.

Someone wants to come to <Developed Country>, to do useful and productive work? We can't have that! We're all out of work that needs doing!

I mean, sure, our bridges are occasionally falling over, my street is filled with potholes, daycares are limited, and cost parents thousands of dollars, classrooms are overcrowded, for some reason 30 minutes of a nurse's time gets billed at $5000, and the line at the DMV is 40 minutes long, but I assure you - there are no jobs here!

Why would the first world want third world immigrants?

Because the first world has no shortage of useful, >100% ROI work that needs doing, and immigrants are willing to do it.

The fact that this is viewed as a bad thing is testament to how utterly insane our economic system is.

What jobs are you talking about?

Why would first world workers want to compete with third world workers?

You also have to provide the immigrants with whatever social spending to which locals are entitled. They cost money; if the immigrants pay less in taxes than they receive in social benefits, they are a net economic loss. And, as you may expect, a poor immigrant likely pays little or even no taxes if their income is low enough.

Also, lowering the price of labor in a particular industry makes other people in it be paid less, or fired. As a result, they buy less, etc, slowing down the entire economy, influencing maybe your own wages.

> You also have to provide the immigrants with whatever social spending to which locals are entitled

Quite a lot of countries don't.

> You also have to provide the immigrants with whatever social spending to which locals are entitled

Do you? Why?

I'm not saying you shouldn't, but I am saying this is an assumption worth questioning.

Also, consider that adult immigrants save your social services one of the biggest costs borne by our society - a K-12 education. Someone with a high school diploma arriving to the US is a flat-out gift of ~$140,000 worth of education.

> You also have to provide the immigrants with whatever social spending to which locals are entitled.

Absolutely not true. The UK, for instance, explicitly states on its work visas "No recourse to public funds", although they are happy for immigrants to pay the same taxes as locals...

>wondering why they don't just leave.

It's not that easy. The vast majority will never have a viable shot at leaving. Basically you either need a lot of money or a professional degree (doctor, lawyer, programmer etc).

In my bubble it seems that in the current American public discourse the corruption and general inefficiency of many African governments can't really be discussed. According to some, the issue there is "(neo)colonialism" and left by itself Africa would be great and prosperous. Basically Eritrea would be Wakanda if not for white males. Is it true? Or is my perception warped by social networks more than average American HNer's?

How Africa (and indeed America) would have developed without colonialism is a very hard question to answer. But the damage done and loss of life caused by colonialism was enourmous - Belgian Congo murdered several millions of its inhabitants, more than the Holocaust to which it was a precursor.

The legacy of exploitative systems runs deep. Many countries simply replicated the same structures with a different colour of face at the top. Dismantling that and turning it into something more egalitarian and law-abiding is a lot of work.

>Many countries simply replicated the same structures with a different colour of face at the top.

I think the point you're missing is that it does not matter the _colour_ of the human. Humans are greedy by nature. We are all animals.

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