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African Economic Growth; Questioning Western Aid to Africa; Somalia Fighting Worsens

Aired May 3, 2008 - 12:30:00   ET


JIM CLANCY, CNN ANCHOR: Hello, everyone. And welcome to INSIDE AFRICA. I'm Jim Clancy in this week for Isha Sesay.
As bad as it gets, fighting raging in and around Mogadishu taking a heavy civilian toll. A survivor shows us the view from inside.

Plus, a look at prospects for economic growth around the continent. What's the upside, what's the downside for investors.

And a new documentary questioning the very effectiveness of decades of Western aid to Africa.

We begin our report this week in northern Somalia, where sources on the ground say a U.S. military strike killed at least 10 people at a meeting of top militant commanders. A spokesman for the (AUDIO GAP). He said Aden Hashi Ayro (AUDIO GAP).

Just six months ago, the United Nations called Somalia's nearly two decade long civil war one of the worst humanitarian crises in Africa. It may be getting worse. For the past week, Britain (AUDIO GAP) channel news had a Mogadishu resident videotape what life was really like inside that capital city. That videotape is included now in this report from Jonathan Miller.


JONATHAN MILLER, CNN CORRESPONDENT: On the brink of the abyss, a small boy lies whimpering on a hospital bed. He's calling for his mother. We don't know his name, or how old he is, but the tank shell which wounded him killed his father.

And this is his older brother. His name is Hassan. (AUDIO GAP) by walking out of the front door of the house when it hit us, he said. Hassan is clearly in agony from the wounds the shrapnel inflicted, and he couldn't manage to say any more.

This is Mogadishu's Medina Hospital. It's the only place to go if you're shot. And it's full of people who have been. In the latest round of fighting, more than 200 civilians reportedly wounded, at the last count at least 120 killed, many women and children among them. Even those who have survived 17 years of civil war here say it's never been this bad.

This woman says three shells landed on her house as her family tried to evacuate. Her husband was killed on the spot. "For all the years I've lived in Mogadishu," she said, "all I've ever seen is civilians being murdered."

This is where many of the recent killings took place. Our Somali cameraman was shown a nursery, where mortars or tank shells had slammed into roofs. People were (inaudible) down and shot here.

Among this pile of empty bullet casings, a mentally ill woman was reportedly raped.

Outside, the damaged homes of Hassan and his little brother and all those who'd made it to Medina Hospital last week.

Mogadishu looking ever more like a ghost town. Local people say Ethiopian and Somali troops rampaged through this residential neighborhood looking for Islamist insurgents following an attack on their base. They left death and destruction in their wake. This woman has a small shop -- or had a small shop. It was looted, and she lost everything.

UNIDENTIFIED FEMALE (through interpreter): A man was shot just over there, right in front of me. And another was shot across the road at the Internet cafe. I was hiding. One of the men was pulled out into the street. Well, they cut his arms and legs off, and they shot him. The other was taken around the corner and shot.

MILLER: Ethiopia invaded Somalia with American blessing (ph) at the end of 2006 to oust a short-lived Islamist government. Since then, the country's descended further into madness. The Islamists are now the insurgents. This is one of their propaganda videos, which we downloaded off the Web.

The Somali Mujahideen, proud to have been designated a terrorist organization by the United States of America, but now, an official (AUDIO GAP). Al Shahab as they're known, are battling what they called the infidel Christian occupier Ethiopia and (inaudible) its regime. Somalia has become a magnet for global jihadis.

This is the audio recording of one of the nightly battles that rage in the capital. That was a bullet flying past. If you got hit at night, you lie there until morning.

In 15 months, three quarters of a million of Mogadishu's residents have fled. If this had happened anywhere else, one U.N. head of mission says, it would have triggered international outrage. Instead, all it's triggered is the world's worst humanitarian catastrophe. This is Afkoi (ph), where the capital's residents have fled to. It's distinguished by the density of displaced people -- the highest in the world; highest malnutrition rates in the world, too. For months now, they've talked of an impending disaster. Well, this is it happening. And nobody knows how to fix it.


CLANCY: That was ITN's Jonathan Miller reporting there. Aid workers say the surge in fighting in and around the capital is preventing them from reaching people driven from their homes.

Now, let's take a look at some of the stories that are making headlines around the continent this week. Zimbabwe's electoral commission says a presidential run-off will be necessary because no one received at least 50 percent of the vote plus, won in ballot in the March 29th election. According to the official results, opposition candidate Morgan Tsvangirai got 48 percent of the vote, and President Robert Mugabe coming in second with just a little bit more than 43 percent.

In Senegal, hundreds of protesters voiced their anger over the soaring cost of food. Increased demand and poor crop yields have driven the prices up more than 70 percent this year for rice.

Does it pay to invest in Africa? When we return, we'll look at the prospects of economic growth all around the continent.

Also, still ahead, has Western aid to Africa caused as many problems as it solved? A new documentary explores that question.


CLANCY: Welcome back. You're with INSIDE AFRICA.

You know, successful business people seem to have a knack for turning obstacles into opportunities. And around Africa, there are many obstacles to business. Problems like instability, the infrastructure, even corruption.

But some countries are creating a more hospitable environment for investors. Ghana has jumped 22 spots in the World Bank's ease of doing business ranking since last year, from 109 to 87. And the International Monetary Fund project Ghana's economic growth is going to approach 7 percent this year.

Nigeria's economy is growing even faster than that. The IMF projects Nigeria's gross domestic product will rise more than 9 percent in this year alone.

Nigeria's growth is primarily from the oil sector, but like many African nations, it's also experiencing a mobile phone boom. More than 4 million new users added there in the fourth quarter of 2007. And analysts estimate for every 10 percent increase in mobile phone usage, Africa's gross domestic product increases by 1.2 percent.

Well, then there is Kenya. Until recently, a beacon of stability of economic growth in East Africa. It's restoring a reputation damaged, of course, after a disputed presidential election triggered weeks of political and ethnic violence. The once booming tourism industry dried up. Many farms and businesses were destroyed or simply had to shut down. Even the Nairobi stock exchange had to close for a little while.

Now, the country is trying to bounce back. But as David McKenzie reports, all businesses have been hit, and hit hard.


DAVID MCKENZIE, CNN CORRESPONDENT: If you travel to Mombasa, you'll probably find Mohamed Fara and his camel both waiting for customers. They arrive at 9:00, live at 6:00, and charge under $1 for a ride down the beach. Business flow is very bad.

MOHAMED FARA, CAMEL OWNER: Last year, tourists were coming. We were getting money. We were not going to bed hungry and our children were not going to bed hungry. We used to leave at the end of the day; we used to leave with money.

MCKENZIE: The take-home is less than $3 on a good day, sometimes nothing at all.

This is a popular beach, but it's mostly filled with Kenyan visitors. Foreign tourists are only trickling in after the disputed election. (inaudible) that there will be a long-term damage to investor confidence in Kenya.

Tourists are only part of the economic puzzle in Kenya. Analysts say that the crisis in Kenya has led investors elsewhere.

RICK ASHLEY, FUND MANAGER: There are -- first impressions of Kenya have changed dramatically, since the images that we all saw on our TV screens in late December, January. People's perceptions have changed, so clearly that then gives us more of an uphill battle.

MCKENZIE: The country's prevailing image was as a lynchpin for the region, with major transport lines linking the world to the rest of East Africa. But the continuing fallout of the elections has marred that reputation.

And countries like Tanzania, now darlings of the West, threaten Kenya's dominance.

CHRIS MWEBESA, NAIROBI STOCK EXCHANGE: We should not be encouraging another center within the eastern African region as Kenyans. We should really -- must take our role as the leader very seriously.

MCKENZIE: The short-term economic picture is working against them. The IMF has downgraded the growth prospects for Kenya to 2.5 percent, less than half of the previous year's growth. But Kenya's Central Bank remains optimistic.

It's certainly not all doom and gloom. Analysts say that short-term foreign investment and long-term (inaudible) should be separated. Safaricom, the largest mobile phone operator in the region, concluded a record IPO for Africa that cemented Kenya as an East African business powerhouse.

MWEBESA: We should continue to see businesses do well because of the underlying economy, and I think that really should be the message to foreign investors. Kenya is open for business.

MCKENZIE: But for businessmen like Mohamed, big corporate deals are less of a concern than his own bottom line. Until these small businesses recover, this economy could remain adrift.

David McKenzie, CNN, Nairobi.


CLANCY: A key voice at the World Bank sees a path to prosperity for Africa. After this short break, Oby Ezekwesili shares her vision.

Also ahead, "What Are We Doing Here?" A new documentary by that title questions the effectiveness of Western aid programs. Stay with us.



UNIDENTIFIED MALE: Making business news in Africa this week. TV in the palm of your hand coming soon to mobile phone customers in Kenya. Mobile service provider Safaricom announced a deal with digital mobile television, which will make 10 TV channels available on subscriber handsets.

Staying in Kenya, Nairobi's congested streets could soon be getting some much-needed relief. The government announced plans to sell bonds to raise 34 billion shillings in next two to three years to build a rapid mass transit system. Officials estimate traffic jams and lost productivity account for billions in lost revenue every year.


CLANCY: Welcome back to INSIDE AFRICA.

The World Bank's vice president for the African region is bullish on the continent's future. Oby Ezekwesili admits that the world food crisis threatens economic growth across the continent, but she is optimistic African countries can overcome poverty through good governance, private investment, development and international trade. Ezekwesili recently discussed the World Bank's long-term strategy for Africa with our own Ralitsa Vassileva.


OBY EZEKWESILI, WORLD BANK VICE PRESIDENT: It's simply to align our support to the African continent, which includes showing various foreign (ph) prospects of being on that continent that would have been able to overcome poverty by focusing on the very important aspects of good governance, mainly the fundamentals, and good investment environment. And therefore, (inaudible) private sector is a catalyst for economic growth, with job creation, and improvement in the lives of the citizens.

It is about the governments themselves investing properly in the (inaudible) social goods, public goods that would provide the enabling environment having the (inaudible) policy environment that would be attractive to -- for private sector.

Then, it is about investment by the private sector. It is about Africa having the opportunity to participate in global trade and trade amongst its own countries. And then it's also about the support that comes through development assistance.

RALITSA VASSILEVA, CNN CORRESPONDENT: You're painting quite an optimistic picture of Africa, but how do you see that -- are you tempering your expectations given the recent food crisis?

EZEKWESILI: You're accusing me of being very optimistic about Africa. Maybe I should turn it around and say, we're less pessimistic about Africa.

I recognize that there are many challenges. We have huge challenges. What I see in health, what I see in education, what I see in infrastructure. The needs are humongous. So clearly, (inaudible) not there at all. But my optimism needs to be recognized by the fact that you're talking of the continent that in recent times has taken the growth trajectory. Now, that growth trajectory is very important to emphasize, because today you have some -- a third of Africa's population is living in countries that are growing at at least a rate above 7 percent. Another third of that population are growing in countries that are growing at at least 5.4 percent.

VASSILEVA: But all this growth, it does not seem to translate into better lives for the people. In fact, Africa is the only continent in the world...


EZEKWESILI: ... that diversity is also showing up in terms of the kinds of numbers that we're seeing. When you look at a country like Ghana and you look at a country like Uganda, they're actually on track for meeting the energy (inaudible) goal.


Ghana and Uganda are going to make that number before that date. And what we need to therefore do is to say with other things that we see have been (inaudible) for these countries to succeed.


CLANCY: 50 years of aid to Africa and what are the results? When we come back, a new documentary asks the question: What are we doing here? Stay with INSIDE AFRICA.


CLANCY: Welcome back, everyone. You're with INSIDE AFRICA.

For five decades, Western aid has been pouring into Africa. Has it actually helped or has it been (AUDIO GAP)?

A new documentary titled "What Are We Doing Here?" explores just those questions. It tells the story of three American brothers and a cousin who traveled across Africa in an effort to understand the continent's poverty. Isha Sesay recently discussed the film with two of the co-directors, Daniel and Nicholas Klein.


DANIEL KLEIN, FILMMAKER: There's a kind of a status quo about what it means to help. You know, you see these advertisements on television. You see celebrities saying, you know, $1 can save a child's life. You know, catchphrases. Yet we continue to see these problems in Africa, the poverty not changing.

UNIDENTIFIED MALE (through translator): I have lived in Janamora for the last 11 years, and you can see with your own eyes.

D. KLEIN: Let's take food aid for an example. Like, sure, there is a situation in which people are in need of food, but the dissatisfaction arises when that foods ends up causing dependency. The period in which the food is necessary ends, and yet food aid continues to arrive. A country like Ethiopia could potentially produce enough food for itself, and yet it continues to rely on this food.

UNIDENTIFIED MALE: One of the frustrations of our administrator who just left aid, Andrew Natsios, was in Ethiopia, where he observed that we were providing hundreds of millions of dollars of food aid year after year, but our agricultural, our budget for longer-term agricultural development so that they could grow their own food and feed themselves, was on the order of less than $10 million a year.

D. KLEIN: When you're pointing a camera in a child's face who is starving, you know, it's painful to do, but the even more painful part about it is to know that they've had cameras put in their faces for the last 20 years or so, and it remains the same. So it's like, is there hope in me doing this too?

NICHOLAS KLEIN, FILMMAKER: You know, I think one of the things that had the greatest impression on me is we were during a famine in northeastern Kenya, and this man literally walked out of the bush.

UNIDENTIFIED MALE: Donors are coming with their own policy. And there are some specific fields where they want to support. And maybe the specific fields they are supporting is not relevant to the needs of that community.

N. KLEIN: And he put it so bluntly. He says, you know, year after year, the same situation reoccurs. Why?

ISHA SESAY, CNN CORRESPONDENT: I think it's known but maybe not fully comprehended how much of an industry aid has become. But another thing that shocked me in watching the film and seeing it said by a local person is that when you sponsor a child, that money doesn't necessarily go to a child.

UNIDENTIFIED MALE: We have around 2,140 children that are sponsored. These are the main source of funds for our development interventions.

D. KLEIN: Do you get a certain amount of money for each child, or how does it work?

UNIDENTIFIED MALE: We don't give the money to the child. We only just fund the development initiatives, because we believe that when the community changes, then the life of these children will improve.

D. KLEIN: It may be a better idea that it's not going to that child; it's going to the community, but there's a misleading of donors, not giving them the benefit of the doubt that they can comprehend that this is a complex situation.

Our film is all about reconsidering Africa, and that also means reconsidering it in a way we treat Africa. I mean, are we just going to give money or are we going to say, we think you're valuable and we want to invest in your continent? There is this economist turned farmer that's in our film. He says if we get $10 million free, what are we going to do with it? We get the money and it disappears. But if you give us $20 million and invest it in bananas, you'll get your bananas back; we'll create jobs; and that's how we are going to get out of poverty.

N. KLEIN: When things aren't going right, we need to jump on it and say, this isn't going right. And it's not going right for these reasons. And these are mistakes that have been made, and let's change them, so we can move forward.


CLANCY: An interesting footnote there. While making "What Are We Doing Here?," the Kleins kept themselves on a $10 a day budget as they traveled 15,000 miles through 12 countries using public transportation.

That's this week's show. Be sure to tune in next week. We have a brand new edition coming your way of "INSIDE AFRICA." Thanks for being with us.