Now is the time to create Africa’s ‘missing middle’ class
AFRICA is doubling its efforts to create what a 1989 World Bank report decried as “Africa’s missing middle”. The report pointed out that Africa’s national economies consisted of a huge informal sector alongside big multinationals and state-owned entities.
It said the then-new African governments paid scant attention to small business, yet it was the engine for growth. Africa is now creating this “missing middle”.
Last month Minister of Small Business Development Lindiwe Zulu hosted the Global Entrepreneurship Conference (GEC), and one of the sessions was of ministers from the continent. These exchanged notes on entrepreneurship in their countries.
The GEC event saw more than 4 500 delegates from institutions representing politicians, policy makers, fund managers, financiers, providers of business development services, researchers and businesspersons discuss innovative entrepreneurship. The African minister’s session was instructive as Dr Ibrahim Mayaki, the chief executive of the New Partnership for Africa’s Development, reflected Africa’s outlook.
Two issues His presentation, premised on Agenda 2063 – the AU’s programme for the continent’s revival – argued that two issues stand out. The first is sustainable economic growth through transforming local capacity and systems for wealth creation, which is about modernising and expanding Africa’s manufacturing capacity.
The second is that wealth creation or economic growth – as measured by gross domestic product – is not enough.
Hence the continent’s Agenda 2063 places specific emphasis on inclusiveness – especially in ensuring equitable distribution of national wealth through opening economic opportunities for all, especially women, youth and, in general, rural populations. A key step is developing and empowering entrepreneurial capacity in local populations.
After the session, African delegates talked of an African Entrepreneurship Network (AEN). This, some said, must be on the back of the Global Entrepreneurship Network (GEN). The GEN, headquartered in New York, rolls out the GEC conferences which countries bid for.
While the AEN could be critical, the context is important as I argue below. Particularly as Africa is still dominated by a huge informal sector and, in some countries, it is the economy. This is ultra-worrisome and, thankfully, the ministers discussed this openly and that it must be dealt with urgently.
The following day saw ministers from Asia, the EU, South America, Africa and the US further exchange notes on entrepreneurship and small business development. Getting back to our continent, Dr Mayaki pointed out that the continent accepts that entrepreneurship development and employment creation are key elements in Africa’s sustainable economic growth pathways.
For Dr Mayaki this is the way for Africa to harness and drive its economic transformation agenda based on its own human and institutional capacity.
This, he pointed out, is essential for success that is not just sustainable, but must stand the challenges (and opportunities) of an increasingly globalised world.
Regarding the AEN suggested above, it must be independent of the GEN. Colonialism is no longer gunboats and armies; it is now driven by knowledge, ways of life, relationships and so-called aid.
An international scholar, Colin Leys, has warned of a lumpen bourgeoisie that serves personal interests and those of the former colonisers.
Colonialism is implemented as we denigrate what is local in preference for relationships or affiliations of what is regarded as traditionally superior.
We also cannot ignore the warnings by US scholar Ella Shohat who asks pertinent
Colonialism is no longer gunboats and armies; it is now driven by knowledge, ways of life, relationships and so-called aid.
questions about the nations that attained liberation from colonialism and created new post-colonial societies as she says: Which perspectives are being advanced in the “post-colonial?” For what purposes? South African intellectual on culture, Mongane Serote, shares this viewpoint.
Indian novelist and journalist, Kavalam Narayana Panicker, argues that post-colonisation domination is achieved by making the subjected internalise the “virtues” of yesteryear’s colonising world.
Thus, the formerly colonised continue the Gospel, for instance neoliberalism, or continue relations with associations linked to former colonisers.
After all, we internalised the views of the coloniser that subject nations were inferior and need the helping hand of the former master. My argument is not a negation of everything west or colonial or working with them or their institutions.
All I call for is greater sensitivity in creating our structures so that, as Mayaki pointed out, implementation is based on Agenda 2063. I do not see how a GEN-affiliated AEN can propagate Agenda 2063; hence my call for an independent AEN so that it can say NO when need be. It can also choose who to link with as there are other global and regional entrepreneurship initiatives. I also make this warning in the light of the experiences of the World Economic Forum (WEF).
Agenda Its Africa Chapter, with annual sessions in Rwanda, Kenya or Cape Town, is driven from Geneva, the headquarters of the WEF which, therefore, influences the agenda. Finally, it is so sad to see our political and business leaders religiously troop to Davos every January, as if to get guidance on what is proper activity in the global economy. Ai! The Washington Consensus is alive and kicking and WEF is part of it.
Multilaterals such as the Bretton Woods Institutions must be a resource on experiences elsewhere but must never ever tell us what to do or not do. Local decision-making, which naturally takes these experiences into account, is crucial as we know ourselves and environments better. Also, until when must we be Europe or the US first borns?
Dr Thami Mazwai is special adviser to the Minister of Small Business Development, but writes in his personal capacity.