Untangling Central Africa for business

Tuesday, September 07, 2010

By Chofor Che

Central African governments seem much removed from the principle, that the true role of government in a free society is for it to make it possible for individuals and businesses to go about their lawful duties unhindered through outright plunder or exorbitant taxes..

As the proper role of government continue to debated in much of the free world, Africans, and in particular  Central Africans can only wish they lived in relatively free economic and political environments, instead of the increasingly morbid fear that characterise their daily lives.

Ideally, the true role of government in a free society is for it to make it possible for individuals and businesses to go about their lawful duties unhindered through outright plunder or exorbitant taxes, while exacting penalties through the right institutions for wilful disregard for the law.

Central African governments seem much removed from the above principle. No wonder only a fraction of individual economic activities get to cross borders within the region, making a mockery of the Central African trading zone which benefits very little from  the eleven-member sub regional trading bloc, the Economic Community of Central African States (ECCAS).

However, ECCAS plans to live up to its mission; to create a good economic, social, political as well as legal environment for her citizens. In May 2010, national leaders of ECCAS met to help clean the books of the Bank of Central African States (BEAC), which had been plagued by heavy corruption and set new forward-looking managerial codes for the new employees.  Secondly, the meeting discussed the possibility of setting up a regional airline which would serve all member countries and thus create an opportunity for goods and citizens to travel freely within ECCAS.

But we have heard these lofty ideals and plans all before, with little progress.   The idea of a common regional airline is very ambitious for a country like Cameroon. Due to the self-inflicted economic crises in the 1960s, Cameroon closed all her domestic airports leading to massive jobs cuts.  Today, despite some improvement in the economy of Cameroon, the airports still remain closed.  Moreover the lone state-run airline company, Cameroon Airways (CAMAIR), which was subsequently privatised, albeit haphazardly suffered heavy losses due to corruption.  So, the fact that Cameroon has yet to reopen her local airports for domestic flights and improve on the bankrupt CAMAIR should be worrying to observers when it now wants to nurse ambitions of having a common airline with members of the ECCAS zone.

Clearly, although the Economic Community of West African States (ECOWAS) is not in it self fully integrated economically, compared with ECCAS, it stands taller when it comes to free movement of goods and persons.  Travel experience within ECCAS is usually nightmarish – vigorous passport checks and physical manhandling from security forces ostensibly enforcing law and order.  A Cameroonian travelling to neighbouring Gabon or Chad needs to acquire an entry visa when all countries are members of ECCAS.  What is worse, a secured visa doesn’t guarantee one freedom

from sub-human checks and extortion.  All these stifle the very purpose of the role of government in a free society, the ideal Central African countries purport to create.

Moreover the taxation system in the ECCAS zone is at best prohibitive. Entrepreneurs still suffer from exorbitant taxes in Cameroon, Chad, Central Africa Republic, all requiring citizens (according to the World Bank’s doing business report 2010) to part with 121%,176.1%,  244 % of their gross national income in order to start a business.      This situation is also true with oil-rich Equatorial Guinea which charges 100.4% from ordinary citizens who wish to start a business.  The picture for after profit tax is equally depressing; 50.5% in CAMEROON, 60.1% for Chad, 203.5% for Central African Republic, 59.5% for  Equatorial Guinea and 322% for Congo DRC.

Instead of leader of the ECCAS zone dreaming about ambitious projects, they should focus on doing the little but significant things that will help unleash the entrepreneurial abilities of their citizens. Business is a moral remedy from poverty. If these countries want to achieve the Millennium Development Goal of halving poverty by 2015, then they should begin untangling the many ropes around the necks of individuals and businesses.

Chofor Che was  winner of AfricanLiberty.org’s 2010 Frédéric Bastiat Anniversary Essay Competition and an associate of AfricanLiberty.org