Page 23 - Msingi Afrika Magazine Issue 15

Economy

every three months, and can be rep-
resented by the following formula:
GDP = Consumption + Investment
+ Government spending + eXports
– iMports.
Since the creation of the Gross
Domestic Product (GDP) in the
1930s and further reinforced in
1944, economists who are familiar
with GDP methodology have em-
phasized that the GDP is a measure
of economic activity, not economic
uation in East African Community well-being. It is a formula used to
regarding dual economy syndrome? determine the size and scope of
Is there a regional plan to address a country’s economy, created by
this? adding together the total amount of
money earned or spent on goods
This failure to reconcile indigenous and services produced by citizens of
economic relations with exogenous the country.
economic values has led to a situa-
tion of two economies, i.e. the First The use of GDP globally as a
Economy and the Second Econo- measure of economic progress was
my. Does East African Community further strengthened as a result of
experience this problem?. By First the Bretton Woods Conference held
economy we mean the white man’s at New Hamshire, USA, in 1944,
colonial economy, and by Second a response to the Second World
Economy we mean an African in- War, since there was a great deal of
Do we have such a consciousness? digenous economy, as we find them economic instability in a number of
Thirdly, has the time not come for in Spaza shops, taxis, etc. countries caused by unstable curren-
Africa to have her own pan-African The ascendancy of Western neo-lib- cy exchange rates and discriminatory
economic philosophy?. We need to eral economics, simultaneously with trade practices that discouraged
deliberate on these questions until colonialism, on the African conti- international trade. In order to avoid
we come to a solution. nent, African ethics and economic a recurrence of such instability,

relations were dislocated and put leaders of the 44 allied nations who
What I would like to emphasize is almost into non-existence. African gathered in Bretton Woods, resolved
the fact that it is wrong for Western countries and Africans in general, to create a process for international
modern economy to separate eco- were forced to embrace Western co-operation on trade and currency
nomics from culture. In our African capitalism holus bolus, and as such, exchange and to “speed economic
situation, it is highly advisable to a vacuum was created in the African progress everywhere, aid political
embed the economy in an African economic system. stability and foster peace” and im-
culture. proving economic well-being.
For me, this is a clash of two The key outcomes, then, were the
We need to ask ourselves these civilizations, and our challenge is establishment of the International
questions: to reconcile these two civilizations. Monetary Fund (IMF) and the In-
Why is it that the Eurocentric Therefore, the constitutive rules of ternational Bank for Reconstruction
capitalism has failed to thrive in an the Bretton Woods conference of and Development (IBRD—now
African setting? We would like to 1944 have to be overhauled, includ- part of the World Bank). The IMF
know how does the East African ing, the GDP methodology, but was created as a forum for collabo-
Community view this situation? what is GDP? rative management of international
The Bretton Woods Legacy & GDP monetary exchange and for stabi-
Why is it that it is only the Third According to Lorenzo Fioramonti lization of the exchange rates of
World countries that have a dual (2013) the GDP measures the value countries’ currencies.
economy syndrome? What is the sit- of goods and services produced

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