Open up African continent to Africans
IN this edition, we report that cement maker, Afrisam, yesterday announced a landmark partnership deal with a local firm Cement Industries Limited to establish the first cement factory in Lesotho. It is certainly the best news we have heard in a long time, as far as the economy is concerned. Lesotho needs more where such investments come from given the severe shocks the economy is undergoing due to dwindling Southern African Customs Union revenues and the slowdown in the South African economy. However, the deal also underscores what Lesotho stands to benefit if we get our act together politically. That is why the return of opposition legislators to the National Assembly is a welcome and significant development in the road to political stability.
even though the opposition bloc still has valid reasons for continuing the boycott, the country is also beset with very serious economic and social challenges that require urgent attention. The economy needs to be urgently diversified to ensure that Lesotho does not only depend on the African Growth and Opportunity Act (AGOA) for its industries to remain afloat. Given that Lesotho risks losing its AGOA competitive advantage if a trade agreement between the United States and Pacific Rim countries is consummated, we need all hands on deck to find new avenues for economic growth. The Trans Pacific Partnership would reduce tariffs and trade rules among the countries involved. It would also allow very competitive economies such as Vietnam to do more business with the US under the same privileges AGOA beneficiaries currently receive.
The deal would decimate Lesotho’s textile industry overnight and leave up to 40 000 people unemployed. Such a dire situation demands our leaders to be brainstorming solutions, and not trying to score points against each other. An area our legislators can work towards improving is the laws and regulations on doing business in the country. Afrisam Country Manager Thato Tšuene told this paper that the process of getting the permission for the construction site from the relevant authorities took a long time to complete, adding that the delay held their plans back significantly. Ease of doing business is a major selling point for countries keen on attracting foreign direct investment and Lesotho can ill-afford to get that wrong.
This sentiment was also echoed by economist and former National University of Lesotho lecturer Dr Frank Baffoe in his analysis of the 2016/2017 financial year national budget. he said the country was being held back by the lack of an enabling business environment for the private sector to operate and grow. Dr Baffoe also noted that it was only through growth in the productive sectors, which are the domains of entrepreneurs, that production and employment levels could expand. For Lesotho to realise growth that is sustainable, there is an urgent need for economic transformation. This is achieved by diversifying the economy and ensuring we become more competitive on international markets.
Government, private sector, workers, media and civil society all have mutually reinforcing roles in promoting economic transformation. however, they must be facilitated by a government that has strong capabilities in setting an overall economic vision and strategy. Only the government can provide the supportive infrastructure and services and maintain a regulatory environment conducive to entrepreneurial activity.
Lesotho has dramatically lagged behind the rest of the southern African region and the even most of the continent in terms of economic transformation. We have failed to diversify our economy and remain with one dimensional industries that are also collapsing. There has also been limited technological improvements in industry while the standard of living continues to plummet for most Basotho. We can learn a lot from such countries as Mozambique, Zambia, Kenya and Tanzania. Structural reforms, sound macro-economic policies, opening up to the global economy and political stability have generated strong growth since countries like Mozambique emerged from civil war.
Over the last two decades, these countries developed stable macro-economic and political conditions as well as an investor-friendly environment. This is the foundation for growth Lesotho sorely needs to come out of the doldrums. The African Development Bank just launched the Africa Visa Openness Report 2016, and it highlights a huge problem: as Africans, we cannot move easily between our countries.
On average, Africans need visas to travel to 55 percent of other African countries and can only get visas on arrival in 25percent of other countries.
This means they can only travel to 20 percent of the countries without a visa. even though countries such as Seychelles, Mauritius, Rwanda, Ghana and Kenya have tried to reduce visa restrictions, other countries are not reciprocating.
This revelation is in sharp contrast to the African Union’s goal to introduce an African passport and abolish visa requirements for all African citizens in all African countries by 2018.
What is really appalling is that it is easier for europeans or Americans to travel within Africa than for many Africans themselves.
In 2015, holders of a United States of America passport, for example, could travel to 172 countries and territories visa-free or with visa on arrival, including at least 20 African countries.
Ultimately, the visa restrictions mean that African countries are losing out.
One of the benefits of free movement of people that visa restrictions inhibit is increased tourism. Tourism contributes to one in every 11 jobs and nine-percent of gross domestic product worldwide.
With high youth unemployment, improved tourism could create thousands of jobs and help reduce inequality. More visitors mean more hotels, restaurants, shopping malls, and a growth in transport and entertainment sectors. The impact could be felt in both urban areas and rural areas.
Currently, according to the Africa Tourism Monitor report, while Africa accounts for about 15 percent of the world population, it receives only about three-percent of world tourism receipts and five-percent of tourist arrivals.
The report further says that visa requirements imply missed economic opportunities for intra-regional trade, and the local service economy (such as cross-country medical services or education).
Visa policies are among the most important governmental formalities negatively influencing international tourism.
This is not just about non-africans visiting our continent. As the new generation of middle class is ushered into Africa, spending on holidays and shopping is increasing, but African countries may not fully benefit.
Many of my friends opt to travel to europe for holidays and shopping as opposed to other African countries. They cite as major reasons the ease of travelling in the Schengen area, which allows a visitor access to 26 countries within europe, with one visa.
Combined with the cost-effective and easy interconnectivity through rail, air and road transport, it is no surprise that europe receives the highest number of tourists globally.
Businesses beyond tourism are affected, too. As an entrepreneur, when choosing a new country to venture into, I consider the openness and ease of doing business, with free movement of labor, goods and services as key indicators.
I’m not alone. The ongoing integration in the east African community has seen many businesses that were initially based in one country expand into the others. For instance, a number of Kenyan based banks have expanded into Rwanda, Uganda and South Sudan because of the improved ease of doing business within the region.
According to the paper economics and emigration: Trillion-dollar Bills on the Sidewalk? open borders could lead to a one- time boost in world gross domestic product by about 50-150 percent.
hence, African countries should strive to make the dreams of the founders of the then Organization of African unity (OAU) true by allowing Africans to move easily and encourage intra Africa trade and investments.
easier movement could also help the unemployment rates. I have often found european or Chinese ‘expatriates’ doing jobs that could be done by highly skilled Africans, some of whom lack opportunities in their home countries, if only they could more easily move between countries for work.
Movement of people can also be a driver of technological change and a fresh source of entrepreneurs. Much innovation comes from the work of teams of people who have different perspectives and experiences. This can also make countries within Africa to be more attractive to foreign direct investment.
While some have argued that strict travel regulations, including visa requirements, are necessary for security purposes, there has been no direct link showing how free movement of people has perpetuated terrorism.
President Paul Kagame of Rwanda has been on the forefront saying that a few bad elements should not be used to restrict millions of good citizens who want to travel for leisure or business.
Political executive editor of the Telegraph James Kirkup recently argued too that “Simply, all the border checks in the world will not keep us safe. Passport controls can’t stop the spread of ideas, and it is ideas, not people, that are the essence of the terrorism that has just killed so many in Paris and Beirut and Baghdad.” I agree. Ultimately, there are many more reasons to remove visa restrictions for Africans traveling in Africa than keeping them. I hope that by 2018, that truly is a reality.
One of the benefits of free movement of people that visa restrictions inhibit is increased tourism. Tourism contributes to one in every 11 jobs and nine-percent of gross domestic product worldwide
l Evans Wadongo is the co-founder of Greenwize Energy Ltd, Founder of Sustainable Development for All, and a development expert based in Nairobi, Kenya. . He is also a 2014 Aspen Institute New Voices Fellow and was and one of CNN’S top ten heroes of 2010.