A circle is known according to the dictionary as the following;

  1. (Mathematics) maths a closed plane curve every point of which is equidistant from a given fixed point, the centre. Equation: (x -h)² + (y -k)² = r² where r is the radius and (h, k) are the coordinates of the centre; area πr²; circumference: 2πr
  2. (Mathematics) the figure enclosed by such a curve
  3. (Theatre) theatre the section of seats above the main level of the auditorium, usually comprising the dress circle and the upper circle
  4. Something formed or arranged in the shape of a circle
  5. A domain or area of activity, interest, or influence
  6. A process or chain of events or parts that forms a connected whole; cycle

Seeking an economic fact that can best describe the reality of inequality – best seen in Africa!

Digging a little, I found some history that starts to connect the dots. In connecting the dots, they form a circle. For Africa, both past and present remains in a perpetual cycle within a collapsing circle of disruptive political thinking, inconsistent economic implementation and corrupt practices against her own people.

Here are the facts;

Longest Ruling Leaders: Africa has four leaders on the continent who have ruled for more than 30 years. One of which is President Jose’ Eduardo dos Santos of Angola. His daughter is also a billionaire.

The shortest ruler is President Yahya Jammeh of Gambia who has been in power for almost 20 years. Given the fact that the “top ten” have collectively ruled for almost 200 years, we should have very little to complain about.

From a political perspective, rulers in the guise of presidents have degenerated the continent and its people, through the misappropriation of natural resources, set the continent back by 400 years. How is it then that on the African continent, we have not had one successful “black” president? The circumference of Africa is wrapped in deep rooted inequality. South Africa has lost top spot from a growth perspective, Nigeria has assumed this grandstand, yet, in both countries making up the continent’s largest economies, corruption is persistent.

Most inequality can be found South Africa, Namibia and Angola. In South Africa 52% of the total wealth is held by the top 10% of the population. South Africa, a country that is the world’s 3rd largest gold producer, produces 90% of the world’s platinum, extracts 15% of the world’s diamonds, produces and exports a wide variety of fruits, has the largest automotive industry on the African continent – with no less than six OEM’s and has the largest tier supplier value chain on the continent spanning all industries.

When a human being spins around there is a strong tendency to get dizzy. This is because the semi-circular canals in the inner ear are filled with fluid and the canals contain sensors. When you turn around, the fluid moves and the sensors pick up the sensation of movement. If you spin round and round, your brain has trouble processing the information and that’s why you feel dizzy.

Unfortunately, Africa is not finding its source of gravity or conscience. With more than 50% of Africa’s informal business sector contributing to GDP, there seems little incentive to stop spinning.

The main message is a fairly grim one for the world as it is. Most of the growth (or profits) land in the lap of an extraordinarily small share of the population: 95% of the gains from the recovery have gone to the richest 1% of people.

Growing Apart

Ever tried keeping your arms together while spinning as fast as possible? Physically this is a challenge because of the laws of physics. So the natural inclination is to state that whilst we remain in a spin, we cannot get a grip on economic realities – leading to a reverse game of tug-of-war.

Inequality is not impervious to government policy or re-development thereof, and higher marginal tax rates are not the only or the best way to address it. In Africa and America Black Economic Empowerment has failed dismally. South Africa in particular has mastered the art of political rhetoric, with politicians realising that the inequality gap has reached the point of precarious thinking.

Is there a solution? What are the solutions? Why have policies not worked? Why have corporates responsible for bringing markets into recession not being jailed? Has the navigation of market manipulation reach an art form?

Why has Africa failed to feed itself? Why have we failed to use our weak currencies to attract positive manufacturing investment – increasing skills and export from the continent and spurning industrial activity?

So far investors have stood back, wiping over a trillion dollars off the stock market for emerging markets. This will make growth and plugging the infrastructure development funding gap ten times more difficult.

The answer to our perilous land may lie primarily with the fact that just maybe Africa does not have a sustainable supply chain of good political leaders or business leaders willing to lead governments on the straight and narrow.

So far we have no indications that Africa is a continent emerging out of inequality.

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