Paul Kagame, President of Rwanda
Continuously incurring debt will help Africa survive today but in the long run it’s actually creating a burden to the future generation.So one can not help but ask is borrowing a solution or a problem? The only true reply that can come” is it depends” but it depends on who and what?
Many economist have argued with their theories that printing money will result in the money flooding the market.This is will result in the economy being hit by inflation this is whereby too much money can only buy a few goods.The money will end up loosing it’s value.
However, have we tried to prove beyond reasonable doubt that there are no loop holes in their theory and that the theory is indeed strong.Whilst doing all this let’s bear in mind that these theories were formulated by fellow human beings like us then there can always be a way to stop inflation from happening certainly if we can take our time we can discover measures we can take to suppress inflation.We should also start thinking outside the box and ask ourselves if we use the printed money to start projects, for innovation and also use it to increase production rather than for buying and selling will there still be too much money in the market.Is there a difference between the printed money and the borrowed money if not then what makes the other cause inflation food for thought.
When a country borrows money it simply shows that as a country they have failed to manage their economy and they lack knowledge on how to run it’s economy.Unfortunately many African countries would rather borrow money instead of printing money and making sure the printed money is being used to boost the economy through investing in developmental projects.
It makes no sense if you think of it ,why would someone lend you printed money inorder to boost your economy but they want you to pay them back with their currency and not your own currency.
Before we go further l would like to point out that borrowing is not bad but the reason we borrow and the way we spend these borrowed fund is the problem.For example after the world war 2 Europe had to borrow a lot of money from America to help them recover from the breakdown.After it had recovered from the breakdown the economy of Europe is among the top best.However this rarely happens for debt usually hinders development and freedom.
Printing of money is not only for America or Europe, every state nomatter big or small can print and own its own currency.
I would also like to denounce the theories by economist that printing of money lead to inflation.Look at America and Europe they print their own money but they do not have inflation.How you use and manage the printed money can either lead to inflation or deflation of an economy.
Let’s take for instance if the Zimbabwean government decide to upgrade their infrastructure and they estimate that this will cost 70 billion . If they print this 70 billion for the development of the infrastructure they then go on to hire Chinese or a European constructors to do the job on a condition that they will pay them 20 % of the capital cost .This is what will happen.
The foreign constructors would want their payment in their own currency.This means the government now has to buy the foreign currency using the money they printed.When they do it means they have replaced the foreign currency in the country with their own currency so if few people demand this rtgs it will end up flooding the market.This will automatically cause the rtgs to loose value.So inorder to avoid all this the company should employ a local company and they should strengthen the companies.
In the case that this 70 Billion is printed to commence the upgrading of the infrastructure the government can avoid inflation by managing the money locally and make sure that:
The money is distributed fairly and it is used in projects that add value and also increase the countries wealth in the economy . Why is the proper distribution of the Printed Money Vital?
First and foremost every citizen of the country has an idea, a project proposal and these proposals if nurtured can help boost the economy.However one is not willing to part with his idea without gaining anything in return.So a barter trade of some sort has to take place a reward or recognition must be given to the citizen inorder to get their ideas.
After printing money, the government has to make sure that the money is not mismanaged and it’s only rotating among few people.This money should be wisely used to start projects which will lure and uncover hidden business proposals and unlock potential in citizens which can be used to develop the nation.
How can this be achieved?
The government should make sure that the money is distributed fairly in all areas of the economy.A balance should be meet between the business owner objective and the government own objective.Whilst the business owners should be given room to make profit the government should also ensure that goods are accessible to everyone and with a good quality.
When the printed money is wisely managed to inject the above advantages in the economy, the beneficiaries, will also in return use the benefits to create multiples of values compared to the intially injected value thereby boosting the economy in the long run leading to a developed country in the future.
Will shunning debt and depending on printing their own money be easy for Africa?
This will not be easy, African countries will find it hard to adhere to this this strategy; it even seems like it can not be done because, keeping Africans in debt this will also tie her future to debt is a big advantage to those that still want to see Africans in chains and the debt is a tool used to control all forms of capital that Africa has be it labour or human capital and even it’s natural resources. Due to this any government /leader that tries to leave the continuous cycle of debt will face strong consequences such as , sanction, and likely a civil war may arise being organized by the controllers of the system.
However, Africa will certainly overcome this and when one or most African countries unite to make a change and make this a continental policy.lf they do not do this together , then they have to know they have also locked the future generations in chains and the slavery will go on.It might not be the slavery we are used to but it is a new modern slavery