Find­ing its own growth model is seen as key for Africa

China Daily (Latin America Weekly) - - Business - By LU­CIE MORANGI

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

PRO­VIDED TO CHINA DAILY

He­len Hai says China is com­mit­ted to help­ing Africa de­fine its own growth

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