Tuesday, November 13, 2007

Things fall apart, the danger of ODMnomics

There was once an African country that was the wealthiest in its region, it had the best-educated population and its factories produced the goods that filled the shelves in its neighbours' shops.

Then came a president who had new ideas, very passionately held, about how to make his country even wealthier. He said the country needed to develop its own style of government, one that was uniquely tuned to addressing its needs. He spent vast sums, upto 60% of the budget on mega-projects. As he had reversed progress made in revenue collection by previous governments, his new government had to inaugurate an entirely new regime at the revenue authority. At the same time, the authority's budget was cut into by the fact that there was much less in tax collections, the president having exonerated large sections of the working population from the tax burden. He nationalised companies that had previously been privatised and antagonised the financial markets with endless investigations and insinuations. Rent controls served to kill the fledgling property and mortgage markets.

Read more from Vitalis Oyudo.