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Prof Said Adejumobi Correspondent
MICHAEL Bloomberg, the former mayor of New York, and philanthropist billionaire, launched a new initiative on January 3 2014 in Johannesburg, South Africa, on supporting media development in Africa.
At that ceremony, Bloomberg made a very important observation worth sharing.
He noted that many people have been asking him why he chose Africa as his new investment frontier, giving a helping hand in philanthropy.
Bloomberg, a perceptive businessman, gave a poignant response. He remarked that Africa was a continent of the immediate future. In the next 50 years, Africa would likely be the continent to beat in terms of its economic growth and strength.
It would be one of the largest economies in the world.
To start the inroad into Africa then may be a little too late as the economic space might have been parcelled out already. Charity now was possibly good business and would create profit in the future!
Bloomberg is a smart businessman and shrewd politician. He is not thinking of today but tomorrow, and lending a helping hand to a continent positioned to claim the future.
When tomorrow comes, Africa will certainly remember those who walked with it on its path to glory. Bloomberg may be one of them.
But for tomorrow to be a new dawn, Africa will need to leapfrog. Its current average 5 percent growth rate will not do the magic; its abundant young people are necessary, but will certainly not be enough; its natural resources are good, but will constitute only a foundation.
Wanted: A game changer
What will prove decisive is Africa’s capacity to have a game changer that will radically transform the structure of its economies and jumps-tart it towards industrialisation. No nation will have space in the 21st century without an industrial base.
Although Africa began the race on the same line as other developing regions in the 1960s, its pace and strategy were deficient, leaving it behind in a disappointing last place.
While others were running and jumping, using even banned substances like steroids, Africa was crawling and musing, allowing others to leave it behind.
Africa performed exceptionally poorly on average for about 50 years, with a per capita income increase of only about US$200, while eight Asian countries — South Korea, Hong Kong, Singapore, China, Malaysia, Thailand, Taiwan and Indonesia — grew phenomenally at an average of 5 percent per year between 1965 and 1990. Their per capita income multiplied tenfold, leaving Africa lagging behind.
The optimism that greeted post-independent Africa suddenly turned into pessimism. A continent with many adopted “mothers” and “friends” suddenly became an orphan, groping in the wilderness, paying a heavy price for its failure.
With failure, Africa became a laboratory of economic experiments. Others started designing its life pattern. Structural adjustments, poverty reduction programmes, a medium-term expenditure framework, economic liberalisation, among others, were some of the elixirs administered to Africa, apparently for life support.
Economic space and policy ownership were lost, so were the dignity and integrity of the African personality and communities. It has taken three decades for Africa to begin to reclaim its lost fortunes.
Industrial progress that will trigger better living standards for the people is the key for Africa to unlock the future and claim global respectability.
The industrial share of GDP in Africa is low and so is the level of employment in the sector.
Industrial products are less than 20 percent of Africa’s exports and some even allege that the 20 percent is comprised of basically repacked or re-branded items from China with little or no value addition from African countries.
The truth is that trade liberalisation worsened Africa’s limited industrial capacity as cheap products from Asia in particular, displaced the manufacturing sector. Africa’s economic growth masks a facade of growing de-industrialisation of the continent.
Ditch economic orthodoxy
What should be done? There is no quick fix to facilitating industrialisation in Africa. But what is evident from the experience of the newly industrialising countries is that economic orthodoxy will not leapfrog the continent.
China went on an inward-looking economic retreat to facilitate its industrial and economic transformation.
General Park Chung Hee, who laid the foundation for South Korea’s rise to stardom, broke all the rules of liberal economics.
He nationalised banks, gave subsidy to local enterprises, and invested heavily in the public sector. His strategy strained relations between him and some of his donor partners.
While nationalisation may be far-fetched in the current context, state strategic intervention is not.
Africa’s industrial policies are usually externally-oriented ones. They prioritise foreign investment and discriminate against local, especially small-scale industries.
Local businesses mostly do not enjoy tax holidays, credit guarantees, or risk cover by the state.
Foreign-owned ones are pampered and over-indulged, all in the name of attracting foreign direct investment. Indeed, some of the so-called foreign investments bring no resources but use the incentives provided by the state to mobilise domestic funds for their capital investments.
Such policies are a shorthand for industrial failures!
The rise of the Chaebols in South Korea had considerable state support. Samsung, Hyundai, and the other big multinational conglomerates in South Korea enjoy remarkable state goodwill. They are faces of their country’s foreign policy.
Foreign investment is good, but Africa must invest in its own local enterprises.
It must cultivate a class of national entrepreneurs and bourgeoisie and be prepared to underwrite risks and failures in certain risky industrial ventures.
Technical capacity, skills development, research and innovation, huge investment in targeted science and technology projects are crucial in making the difference for Africa’s industrial growth.
Good infrastructure critical
Infrastructure paucity is a major drawback for economic progress. Serious infrastructure deficits increase the cost of doing business, making investment laborious and Africa a very uncompetitive place to invest in, even for its own citizens.
For example, it is estimated that sub-Saharan Africa’s electricity production is equivalent to that of Spain, whereas the continent has over 20 times the population of Spain. Africa must fix its broken infrastructure and expand it massively.
If the US is still refurbishing its own infrastructure and dispensing huge public funds on it, what about countries that do not have the infrastructure in the first place, or broken infrastructure?
Public-private sector partnership in infrastructure investment is positive but such must not be at the expense of public welfare.
Affordable cost, accessibility, quality, and high standards should be the guiding principles of public interest in negotiating public-private sector partnership in infrastructure development in Africa.
For Africa to tell its story and negotiate its future, it must be in command of information and data about itself. It is shameful that data and information about Africa is often cooked and dished from outside the continent.
Even Africans rely on outside institutions to give it data and information about itself. This is shamefully embarrassing.
With accurate and reliable data, Africa can plan and project, define its vision, and chart the course of its future.
Planning without reliable data is indeed planning to fail. As such, all efforts to strengthen Africa’s information, data and statistical capacity must be encouraged.
It is the first step towards laying the foundation of an industrial society.
The basic fundamentals for a game changer are in place — huge natural resources, abundant labour reserves, vast arable land, energy concentration, and favourable weather conditions.
What Africa needs is to create wealth, progress, and prosperity out of all these.
Human ingenuity and strategic planning and execution powered by visionary leadership will define Africa’s place in the 21st century.
- Professor Adejumobi lives in Lusaka, Zambia. The views expressed herein are personal and do not represent that of any organisation. This article is reproduced from New African magazine.
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