Tag: IMF

By Dr. Samson Abanni

Let me tell you a story from the long ago—around 1400—when the world’s most advanced technology wasn’t smartphones or artificial intelligence, but something far simpler: turning raw wool into finished cloth. This was the quantum science of its day.

England was the world’s largest producer of raw wool, but not a single person in all of England had mastered transforming that wool into the fine textiles that commanded premium prices across Europe. Just like modern African countries that export cocoa beans, coffee, and crude oil, England was trapped as a raw material supplier while other nations captured the lion’s share of value.

The English king decided enough was enough. He crafted an irresistible immigration package: tax breaks, free land, guaranteed markets, and citizenship to any skilled textile worker willing to relocate and teach their craft to English apprentices.

The strategy worked. Skilled artisans from Flanders, Italy, and other textile centers packed their tools and headed to England. Within a generation, English workshops were humming, local workers had mastered the technology, and the domestic market was flourishing.
Phase two was even more audacious. Once local production could meet domestic demand, they banned raw wool exports and prohibited imports of finished woolen goods. European competitors, suddenly cut off from their primary raw material source, found themselves forced to import expensive finished products from England—the very country they had previously supplied. This single strategic shift helped launch England toward economic dominance.

I shared this hoping you would ask, why can’t we copy this playbook ?

The answer isn’t corruption—though that certainly a good part—but something far more structural and sinister.

THE TAX COLLECTION TRAP

Poor countries struggle desperately to collect taxes. Our tax collection system is rudimentary, our property and citizens registration system is poor. Just imagine tax collectors going door-to-door in your neighborhood—we’d have more murders than revenue! This forces African governments to rely on the easiest taxes to collect: tariffs and excise duties at ports and airports. Unless the goods you’re importing are spiritual, you can’t avoid these taxes. Last year, half of our government revenue came from excise duties—that’s too high by global standards. Even if our personal income tax is lower we will get much more revenue from there , if we can just find a way to collect it from the millions in the informal sector.

A small increase in tariffs could substantially boost government income while encouraging local production. But here’s the catch: one of the key conditions attached to IMF and World Bank loans is that borrowing countries cannot raise tariffs.

Let’s use the Cocoa industry as a poster child.

Last year, Nigeria made about N2 trillion from selling raw cocoa beans. But countries that export raw cocoa capture only 10% of the final value. The remaining 90% goes to those who add value — processing, manufacturing, branding, and marketing. If we processed our own cocoa, that N2 trillion could become N20 trillion or more.
When you export raw cocoa to Europe, it enters duty-free. But if you dare to add even the smallest bit of value—grinding those beans into powder—Europe slaps a 7% tariff on your product. Process it further into chocolate? Forget it. This isn’t accidental; it’s designed to force producer countries to only sell raw materials.

Meanwhile, Mars chocolate alone earned $50 billion in 2024. That’s more than the GDP of many African nations, built largely on cocoa beans purchased at artificially suppressed prices from African farmers.

THE INTELLECTUAL PROPERTY PRISON

Try to make chocolate in Africa for export to Europe and you’ll discover a maze of “health and safety standards” designed more to exclude us, and the intellectual property needed for advanced manufacturing is locked away in Western patents.

England mastered woolen goods by learning from Flemish artisans. They later “stole” printing technology from India and tea cultivation from China. The United States built its textile industry by stealing spinning tec from England. Taiwan’s semiconductor industry began with technology “acquired” from IBM.

If we were free to tinker, a firm in Nigeria can try to modify OpeanAi models for example, and sell it here, so that the subscription I pay monthly to the US would stay here in our economy to create jobs. It’s through it that England mastered wollen goods, stole printing of colour tech from India and tea production from China.

The US stole IP of cotton spinning tech from England. Taiwan stole ICs tech from IBM etc. In their days these were cutting edge tech. This was stopped when the World Trade Organization (WTO) was born. You cannot learn these very advanced stuffs without stealing some part, you just can’t. This is why China is still doing so today. Anybody who is anybody today stole this way, Japan inclusive.

THE WTO PARADOX

The WTO was supposedly created to encourage free trade and level the playing field between nations. In reality, its structure systematically favors already-developed economies. The rules only appear neutral on paper.

Advanced goods that African countries import are priced astronomically high, allowing developed nations to exchange a few manufactured products for vast quantities of our raw materials, which are artificially priced low through market manipulation. Meanwhile, Western governments provide subsidies to their citizens, making these expensive goods affordable domestically while maintaining high export prices.

When African governments want to borrow money to make the infrastructure investments necessary for development, IMF loans come with caps on the budget deficits countries can operate but the US can borrow as they like. This effectively prevents the kind of massive public investment that every developed nation used during their industrialization phase.

THE GOLDEN WINDOW THAT CLOSED

Our best chance was probably between 1960 and 1990 — a period in world history when any country with a well-intentioned government could realistically break free from underdevelopment, regardless of their starting point. Many economists argue this was because the economic competition between the United States and the Soviet Union made both superpowers generous with development aid and technical assistance as they competed for influence.

Once the USSR collapsed and was dismantled, the world became fundamentally different. The incentive for the West to help other nations develop diminished. Countries that escaped poverty—Singapore, Taiwan, South Korea, Japan—all made their breakthroughs during this golden window.

Meanwhile, we were exchanging military coups like playing cards, with leaders competing to see who could cart the most wealth abroad. And unfortunately, this mentality hasn’t fundamentally changed.

THE PATH FORWARD

The situation is more challenging now. But not impossible. It would require sacrifices and strategic thinking on a scale that we, as a people, have historically been reluctant to make.
It would require governments willing to risk aid cuts and loan restrictions to protect domestic industries. It would require citizens willing to pay higher prices for locally-made goods during the transition period. It would require leaders who think in decades rather than election cycles.

Most critically, it would require recognizing that the current global economic system isn’t a natural phenomenon—it’s carefully designed to perpetuate existing hierarchies.

The question is whether we can find our own path in a much more constrained world, knowing that every step forward will be met with resistance from those who benefit from the current system.

The technology that could transform Africa exists. The resources certainly exist. What’s missing is the collective will to pay the price of economic sovereignty—a price that, ironically, gets higher with each passing year of inaction.

Abanni is a Medical Doctor and Member of the Board of Editors of Pacesetter Frontier Magazine.