Finding its own growth model is seen as key for Africa
As Africa seeks a suitable industrialization model, the continent’s latecomer status will allow it to choose from and modify other nations’ successful growth models, according to Helen Hai, CEO of the Made in Africa Initiative, which advises African companies and governments on commercial industrialization.
China, for example, “did not follow the Washington Consensus, but fervently believed that job creation was the solution to ending poverty. This saw the country move away from aid and invest in industrialization,” says Hai.
The bet was a success, resulting in the country recording doubledigit economic growth.
However, while saying that China offers many lessons for Africa, Hai adds that China is committed to helping Africa define its own growth model.
This is spelled out in the Forum for China-Africa Cooperation and also in the Belt and Road Initiative, which includes Africa, she says. The biggest beneficiary will be industrialization and agricultural modernization.
China funded 15.5 percent of the total share of Africa’s infrastructure development to become the largest single funder in 2016, according to professional services provider Deloitte. In the recent past, China has increased investments into the continent, particularly those channeled toward infrastructure under the Belt and Road Initiative, it said. From 2000 to 2015, the Export-Import Bank of China provided $63 billion in loans to Africa, largely for the development of roads, railroads, airports and ports.
“It is time the conversation around Africa’s industrialization centered around how China can support Africa, and not what China wants. Otherwise, Africa will miss out on opportunities,” Hai says.
Estimates that China will shed around 85 million jobs as it moves to industrial and technological upgrading point to a golden opportunity for Africa, says Hai, who is also the UN Industrial Development Organization’s goodwill ambassador.
She advocates construction of special economic zones, which she says would generate a significant number of jobs over a short period of time.
Special economic zones, or SEZs — defined as areas created by governments for development of business enterprises that are governed by special business and trade laws that differ from those for the rest of the country — are designed to encourage foreign investment.
“If Africa aims at generating decent and sustainable jobs for youths, SEZs present the best opportunities,” says Hai, who also is former vice-president of Chinese shoe-making giant Huajian’s shoe factory in Addis Ababa, Ethiopia.
Governments should directly engage with foreign investors, she says, adding that such partnerships “will effectively address the cost of production and exportrelated costs”.
Li Kwong Wing, chairman of SBM Holdings Ltd in Mauritius, model. says Africa can successfully overcome competition and increasing protectionism in the global market by becoming more innovative in science and technology.
“We have had homegrown technology such as M-Pesa from Kenya, a mobile money transfer solution, that has been revolutionary. With the right partnerships and growth path, Africa can compete,” he says.
Ben White, founder and CEO of VC for Africa, a venture capital
Helen Hai says China is committed to helping Africa define its own growth