Africa grow­ing faster, but who ben­e­fits?

Public Sector Manager - - Contents -

A look at some of the con­ti­nen­tal is­sues raised at the World Eco­nomic Fo­rum on Africa, held in Dur­ban

Six out of the 10 fastest grow­ing economies in the world this year are African. This makes Africa the fastest grow­ing re­gion in the world af­ter Asia, de­spite the slug­gish growth and eco­nomic mis­for­tunes ex­pe­ri­enced across the globe over the past nine years.

The World Eco­nomic Fo­rum (WEF) also pre­dicts that by 2030, one in five peo­ple will be African. Com­bine the con­ti­nent's soar­ing pop­u­la­tion with tech­nol­ogy, im­prove­ments in in­fra­struc­ture, health and ed­u­ca­tion, and Africa could be the next cen­tury's eco­nomic growth pow­er­house.

The In­ter­na­tional Mon­e­tary Fund (IMF) growth in­dex pre­dicts that Ghana's gross do­mes­tic prod­uct (GDP) growth rate will be around 13.73 per cent this year, fol­lowed by Côte d'Ivoire at 7.98. The IMF pre­dicts that, this year, Ethiopia's GDP will grow by around 7.50 per cent, Tan­za­nia's by 7.24 per cent and Dji­bouti's by 7 per cent.

At face value, all this paints a pic­ture of a grow­ing and pros­per­ing con­ti­nent, but some ob­servers dis­agree. Many of the African coun­tries that are seen to be pro­gress­ing eco­nom­i­cally are still among the most un­der­de­vel­oped.

Cel­e­brat­ing unity

In May, the con­ti­nent cel­e­brated its unity, mark­ing the found­ing of the Or­gan­i­sa­tion of African Unity on 25 May 1963. But, for many, there is lit­tle to cel­e­brate. Po­lit­i­cal free­dom means noth­ing with­out eco­nomic growth, some ar­gue.

Poverty and in­equal­ity is still rife. With the num­ber of work­ing-age peo­ple ex­pected to grow to 450 mil­lion

over the next two decades, there just is not enough in­no­va­tion and devel­op­ment to cre­ate much needed jobs. En­trepreneur­ship is also slow to take off. Ob­servers say the re­sult could be a wors­en­ing cri­sis of youth unem­ploy­ment.

What is the prob­lem? Why are African coun­tries find­ing it so hard to see the fruits of their eco­nomic growth chan­nelled to devel­op­ment and pros­per­ity for their cit­i­zens? Why does poverty and un­der­de­vel­op­ment still per­sist, when the re­gion is said to be the fastest grow­ing?

These are some of the ques­tions that dom­i­nated talks at the World Eco­nomic Fo­rum on Africa, held in Dur­ban from 3 to 5 May.

Over the years some peo­ple have blamed the West and in­ter­na­tional in­sti­tu­tions such as the IMF and World Bank for Africa's prob­lems.

But, in Dur­ban, the more than 1 000 busi­ness lead­ers from 100 coun­tries present were de­ter­mined to stop the blame game. They wanted to find so­lu­tions.The val­ues of lead­er­ship and in­clu­sive growth in Africa dom­i­nated the meet­ing.

“The World Eco­nomic Fo­rum

In­clu­sive Devel­op­ment In­dex 2017 lists Cameroon, Chad, Ghana, Kenya, Mali, Namibia, Sene­gal, Tan­za­nia, Uganda and Zim­babwe, as the con­ti­nent's 10 in­clu­sive

economies.”

In­clu­siv­ity is elu­sive

Every­body agreed Africa was grow­ing. How­ever, the growth was not in­clu­sive, judg­ing by the gap be­tween rich and poor. It was the main theme of the meet­ing in Dur­ban. How can Africa achieve eco­nomic growth that doesn't leave the ma­jor­ity of its peo­ple be­hind?

Some­thing needs to be done to en­sure in­clu­sive growth and this re­quires ef­fec­tive lead­er­ship of the econ­omy, which is some­thing many African coun­tries are seen to be lack­ing.

The World Eco­nomic Fo­rum In­clu­sive Devel­op­ment

In­dex 2017 lists Cameroon, Chad, Ghana, Kenya, Mali, Namibia, Sene­gal, Tan­za­nia, Uganda and Zim­babwe as the con­ti­nent's 10 in­clu­sive economies.

What does this say about the rest of the coun­tries in Africa? Are their economies not in­clu­sive? Per­haps this ques­tion can only be an­swered by those coun­tries.

South Africa's Pres­i­dent Ja­cob Zuma seems to be aware of the prob­lem, if his speech at the meet­ing was any­thing to go by.

“As lead­ers, we have not ad­dressed ad­e­quately how we are go­ing to close the gap be­tween the rich and poor in the world and achieve mean­ing­ful, in­clu­sive growth,” he said, speak­ing at the open­ing cer­e­mony.

He also said that more needed to be done glob­ally to com­bat “eco­nomic crimes” such as money-laun­der­ing and profit-shift­ing. Il­licit fi­nan­cial flows out of Africa that amount to bil­lions of US dol­lars have been viewed to be among the crit­i­cal is­sues that slow the con­ti­nent's progress.

The theme for this year's WEF on Africa meet­ing cen­tred on in­clu­sive growth and re­spon­sive lead­er­ship. In­clu­sive growth has also been the buzz phrase in South Africa, fol­low­ing gov­ern­ment's re­cent pro­nounce­ments on rad­i­cal eco­nomic trans­for­ma­tion.

Most pop­u­la­tions re­main poor

Those who at­tended the meet­ing in Dur­ban agree that the ma­jor­ity of the world's pop­u­la­tion re­mains poor and has been side-lined from the real eco­nomic ac­tiv­ity. For

its part, South Africa wants to change this pic­ture of non­in­clu­sive growth, Min­is­ter of Fi­nance Malusi Gi­gaba told the meet­ing.

The min­is­ter went to great lengths to out­line what South African gov­ern­ment lead­ers mean when they speak of the “rad­i­cal trans­for­ma­tion” of Africa's big­gest econ­omy.

“We have not paid enough at­ten­tion to de­vel­op­ing a pro­duc­tive econ­omy in the town­ship and ru­ral ar­eas,” Min­is­ter Gi­gaba told guests in one of the di­a­logue ses­sions in Dur­ban.

“The spe­cial prob­lems of the apartheid sys­tem have not been ad­dressed suf­fi­ciently,” said Min­is­ter Gi­gaba.

It should there­fore be un­der­stood why peo­ple were im­pa­tient for speedy change, he said.

But to blame Africa's prob­lems just on out­siders is disin­gen­u­ous, ar­gued other pan­el­lists at the di­a­logue ses­sions.

Prom­i­nent South African politi­cian Lindiwe Maz­ibuko called for a new gen­er­a­tion of lead­ers. “Africa has a lead­er­ship vac­uum,” Maz­ibuko said, ad­ding that the cur­rent crop of Africa's lead­ers has failed to de­liver.

“We need a dif­fer­ent line of un­der­stand­ing of what lead­er­ship in an African so­ci­ety is, be­yond pol­i­tics and busi­ness, into the non-profit, into civil so­ci­ety, into churches, schools, com­mu­ni­ties. We need to re­de­fine lead­er­ship,” Maz­ibuko said.

Pro­fes­sor Klaus Sch­wab, founder and ex­ec­u­tive chair­man of WEF, echoed this: “We need lead­er­ship that re­spects hu­man dig­nity and di­ver­sity. We need a value-based lead­er­ship that serves the com­mu­nity.”

Min­is­ter Gi­gaba's so­lu­tion was in­tra Africa trade.

“African coun­tries need to iden­tify new mar­kets to fo­cus more on trad­ing with one an­other, iden­tify mar­kets in emerg­ing economies and trade with

2 bil­lion: those coun­tries that are still open to trade.”

Although there were op­por­tu­ni­ties for African coun­tries glob­ally, these of­ten came with risks. “How­ever, I think on the over­all, we need to take a pos­i­tive out­look and fo­cus on what we need to do in or­der to grow our economies to sus­tain the growth over the medium to long term,” Min­is­ter Gi­gaba said.

Lack of in­no­va­tion was also cited as one of the things that were slow­ing Africa's progress. Avail­able sta­tis­tics at the meet­ing re­vealed that Africa has fewer than 100 sci­en­tists per mil­lion peo­ple, which is a pal­try eighth of what it needs.

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