Illusions of Parity: The Real Scamming of Africa

According to cable data and Forbes 2019 report , African nations pay some of the highest rates for data, with Zimbabwe, Equatorial Guinea, and Djibouti ranking in the top five nations worldwide. It can be argued that such high prices on the continent are due to infrastructure issues and poor access to international cables, but that would not be totally true. For example, Djibouti has great access to international cables but is among the top five nations paying exorbitantly per gigabyte. While the island nation has some infrastructure issues, it in fact, ranks as one of the most connected nations in the Horn of Africa, so why the high prices? Is it just price gouging?

In 2019, Kenyan women protested the poor quality feminine products distributed by Proctor and Gamble. Online the women created the hashtag, #MyAlwaysExperience and detailed the frightening experiences they had with the substandard products. And, reader assured, these products are sold at US Dollar equivalents in Kenya and other parts of Africa. If you’ve ever travelled abroad such products may fetch similar or higher prices in the African market. The outcry was so great that national media, The Star Kenya published an op-ed detailing the abuse.

Many postulate that high prices in Africa come as a result of increased economic strength, wage growth and better opportunities. That is not so. The World Bank conducted extensive research to determine spending power in each nation, based on the international dollar. It is a standard of measuring the cost for goods and services based on what a US dollar can buy, also known as “Purchasing Power Parity” rate. The findings were shocking, without any real reason for massive cost imbalances. People in Africa’s Sahel pay more for some goods and services than Eastern Europe. To give that some perspective, imagine that a woman in Central Africa who makes 2 dollars a day must pay 3-times the cost an average woman in Europe making 42/day pays for shampoo. Why is a woman who makes two dollars a day being charged 3-times as much for the same product?

This shampoo below which costs on average 98 cents per bottle in the US to $1.50 USD is priced at $2.98 USD in a West African country. That is a markup of more than 200 percent! What’s more, many large stores and shops are not locally owned and many people have no idea how much these items really cost.

In 2018, Whole Foods grocery chain was forced to pay out $500,000 to New Yorkers for overcharging in their stores and more recently Costco, Whole Foods, Trader Joe’s grocery chains and other food outlets have been implicated in legal proceedings for allegedly overcharging customers for eggs and other food stuffs during the height of the pandemic. These infractions have been brief, but American consumers and consumer advocates have acted quickly to address the imbalances.

While African states continue to bravely forge ahead a new socio-economic destiny, it is without question such inequities must be addressed. It will be difficult for an African man in Mali to invest surplus funds into his business or fledgling startup, if all of his additional money goes toward overpriced basic necessities to feed and support his wife and children. When the cost of living is too high for regular citizens, the economy stalls. African nations then must rely on “Foreign Investment” or international loans to keep things going.

These infractions have been brief, but American consumers and consumer advocates have acted quickly to address the imbalances.

Even Africa’s elite are vastly overpaying for the cost to do business, buy goods and services, travel and get medical services. Imagine the cost a wealthy Sierra Leonean must pay to book a flight to the UK for a routine outpatient medical treatment–with visa fees, out of pocket doctor’s fees, lodging, food… Yes, even the elite overpay. Without policy and mechanisms in place to support a descent cost of living, it seems what could be invested into national and commercial growth will be paid out for basic necessities to multinationals and foreign merchant classes.

Such can be seen in the chokehold Covid-19 is having on American Industry, which had been underscored by years of neglect and wanton outsourcing. Over reliance on imports at the expense of the local market is the equivalent of kicking the legs from under a table. Even at the height US Covid-19 cases and economic instability, the unwillingness to shore up citizens continues to eat away at the economic landscape.

Even Africa’s elite are vastly overpaying for the cost to do business, buy goods and services, travel and get medical services.

While the US may begrudge China its growing hegemony, there is little in the way of economics and industry they can do to severe the tie. There’s simply nothing comparable to replace it. No industry. No factories. No output volume. America is left at a desperate juncture in its attempt to regain first nation status. Regardless of its choice to remain or decouple from China, it will need an outsourcing replacement to lean on. But developing economies can learn a lesson.

The SARS demonstrations in Nigeria evolved into a cry for humane living conditions and opportunities for youth, business and housing needs. Without a sustainable living standard, it will be difficult to see steady growth across all sectors. African states will suffer from the “Oasis in the Desert,” style of growth. Multinationals around the world have major stakes in African states, whether they are extracting natural resources or setting up retail locations to sell products and services. There then needs to be citizen focused mechanisms to ensure not only a living wage, but a humane cost of living.

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