Thoughts on Africa in Davos

Jo­hannes !Gawaxab

RISKAFRICA Magazine - - CONTENTS -

Jo­hannes !Gawaxab, man­ag­ing di­rec­tor of Old Mu­tual Africa, was the only Namib­ian to at­tend the 43rd World Eco­nomic Fo­rum An­nual Meet­ing in Davos, Switzer­land. The fo­rum’s AGM brings to­gether busi­ness, po­lit­i­cal, aca­demic and other so­ci­ety lead­ers from all over the world. It is re­garded as the fore­most creative force for en­gag­ing lead­ers in col­lab­o­ra­tive ac­tiv­i­ties fo­cused on shap­ing global, re­gional and in­dus­try agen­das. He shared his thoughts on the ex­pe­ri­ence with RISKAFRICA.

At­tend­ing the an­nual meet­ing was a great op­por­tu­nity to be part of the shap­ing of the greater en­vi­ron­ment in which we op­er­ate; and with fi­nance be­ing such a crit­i­cal part of how an econ­omy runs and func­tions, to dis­cuss is­sues af­fect­ing the fi­nan­cial ser­vices in­dus­try with some very key in­flu­en­tial stake­hold­ers.

I had the priv­i­lege over the four days in Davos to meet and talk to Raila Ondinga, Prime Min­is­ter of Kenya; Dr Henry Kissinger, for­mer US Sec­re­tary of State; Joseph Stiglitz, the Amer­i­can econ­o­mist, and re­cip­i­ent of the No­bel Prize in Economics; Marissa Mayer, the CEO of Ya­hoo; gov­er­nors of three cen­tral banks; and Clay Chris­tensen, the Har­vard Busi­ness School Pro­fes­sor best known for dis­rup­tive in­no­va­tion.

It is ev­i­dent from the many dis­cus­sions that we are con­fronted world­wide by ma­jor adap­tive chal­lenges as well as pro­found trans­for­ma­tional op­por­tu­ni­ties. To steer this to­wards suc­cess­ful out­comes, we need to mas­ter strate­gic agility and to build risk re­silience. A pri­mary in­sight for us in Namibia is that we are con­stantly at a cross­roads where our ac­tions or in­ac­tions can shape the fu­ture of life of many Namib­ians.

Key is­sues af­fect­ing the world

Global econ­omy, Eu­ro­zone fragility, fi­nan­cial sys­tem sta­bil­ity, widen­ing in­equal­ity, per­sis­tent struc­tural un­em­ploy­ment and cli­mate change ap­pear to be key is­sues af­fect­ing the world. To thrive, never mind sur­vive, global com­pet­i­tive­ness is in­creas­ingly driven by tal­ent and in­no­va­tion.

Ma­jor ge­o­graph­i­cal risks in 2013

The Arab Spring/Win­ter; the Eu­ro­zone crises and the rise of China seem to be among the sig­nif­i­cant risks fac­ing the globe. China’s be­hav­iour is im­por­tant as its ac­tions im­pact the en­tire world. In Africa, we need to re­view our re­la­tion­ship with China and change it to one that is mu­tu­ally ben­e­fi­cial. China has a clear long-term Africa strat­egy which, un­der­stand­ably, is premised on its own in­ter­ests. It is time for Africa to re­view this re­la­tion­ship and ap­proach it in a way that is a winwin for both par­ties.

Europe will strug­gle with growth

Europe is ex­pe­ri­enc­ing struc­tural prob­lems and is set to strug­gle for a long time. The con­ti­nent is one of Namibia’s main trad­ing part­ners and if eco­nomic growth con­tin­ues at cur­rent lev­els, there are ob­vi­ous chal­lenges to growth in Namibia. Di­ver­si­fy­ing our ex­ports to new mar­kets should be a con­sid­er­a­tion if not al­ready em­barked upon.

Risk of un­con­ven­tional mone­tary pol­icy

We are en­ter­ing a risk pe­riod in terms of how much cen­tral banks can do. Cur­rency wars have be­come a real pos­si­bil­ity. Cen­tral bankers are keep­ing in­ter­est rates low and as­set prices high, and ev­ery coun­try wants to keep its cur­rency down in or­der to make ex­ports more com­pet­i­tive. To re­spond to global eco­nomic chal­lenges, mone­tary pol­icy glob­ally in­creas­ingly finds it­self in un­con­ven­tional ter­ri­tory.

Cur­rency wars

Al­though we live in a world of flat money and mostly float­ing rates, ques­tions are be­ing asked about the cur­rent level and value of the Chi­nese cur­rency as well as the Ja­panese Yen, in­clud­ing the lat­est move by Ja­pan to in­crease its in­fla­tion tar­get from one to two per cent – and the de­ci­sion by Bank of Ja­pan to buy $140 bil­lion of mostly short-term govern­ment debt each month. The de­pre­ci­a­tion of the US Dol­lar dur­ing 2012 also raised ques­tions as to whether coun­tries should keep their cur­ren­cies de­lib­er­ately low to im­prove their com­pet­i­tive­ness.

In­ter­net will get closer and per­sonal

The ‘in­ter­est graph’ – the set of things I am in­ter­ested in and that my friends like – will over­take the ‘so­cial graph’ or the so­cial net­works. In the evo­lu­tion of tech­nol­ogy we had the In­ter­net-boom era, the sec­ond wave re­volved around so­cial net­works, while smart­phones are cur­rently ex­pe­ri­enc­ing an ex­plo­sion. The fu­ture of tech­nol­ogy is per­son­al­i­sa­tion, guided by daily habits. The ul­ti­mate source of growth will be tech­no­log­i­cal progress.

In­equal­ity big­gest risk fac­ing the world

Poverty, un­em­ploy­ment, and in­equal­ity are not unique in Namibia. The re­al­ity is that across the world – for dif­fer­ent rea­sons and his­to­ries – in­equal­ity and un­em­ploy­ment are ag­gra­vat­ing chal­lenges we all face.

The se­crets of suc­cess and com­pet­i­tive­ness

The over­ar­ch­ing theme ex­pe­ri­enced at Davos clearly in­di­cates that suc­cess re­ally is about the jour­ney, not the des­ti­na­tion. To be com­pet­i­tive, Namibia needs to fo­cus on struc­tural fea­tures of com­petive­ness, on its macro-eco­nomic pol­icy – fis­cal and mone­tary pol­icy – in­no­va­tion, at­tract­ing FDI and on its ex­port sec­tor. To en­sure in­ter­nal sta­bil­ity, labour-ab­sorb­ing growth is al­most a no-brainer.

But to re­ally fo­cus on en­sur­ing Namibia’s suc­cess, we need to get our ed­u­ca­tion sys­tem on a track that is sup­port­ive of our national as­pi­ra­tions. To do this, we need good lead­ers. Good lead­ers lead, great lead­ers trans­form. Our gen­er­a­tion has ev­ery­thing to lift Namibia out of poverty and trans­form it into a win­ning na­tion.

While many of th­ese ob­ser­va­tions are known and shared in var­i­ous forms across Namibia in board­rooms and in huts, I share them with you now with the as­sur­ance that we are in good com­pany glob­ally and our growth is their growth and their suc­cess is ours, too.

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