Bid to fight poverty and boo
THE World Economic Forum (WEF) for Africa, held in Durban this week, was convened to discuss ways to eradicate poverty and promote shared growth and opportunities for all Africans.
In this context, Wildu du Plessis, partner and Africa head at Baker Mckenzie law firm in Johannesburg, said at the event that it was important to note that the fundamentals of the global economy had shifted and investors were now looking to developing economies for higher rates of return as developed nations had become low-growth economies.
He said that although China, Brazil and India had received much of the spotlight, China was turning into a developed economy while Brazil and India faced major structural issues to deliver on their potential.
This meant Africa, despite its own challenges, was definitively the last frontier for capitalist opportunities.
Du Plessis suggested that despite its imperfections, capitalism had lifted billions of people out of subsistence poverty in the past three decades.
“Capitalism delivers good things when allowed to function as it should,” he said.
Du Plessis said governments and legislators in African nations should act as enablers applying the basic principles of capitalism such as free market competition, private ownership and capital investment for returns.
“Treat capitalism as an economic system that has been empirically proven to work and everyone will benefit through the emergence of a large and more affluent middle class.
“However, when it is twisted into so-called ‘crony capitalism’, only the elite benefit and the concept is misunderstood and vilified,” he said.
Du Plessis said colonialists had set the tone for this in Africa.
“While Britain and others were embracing free trade, industrialisation, liberalism, competition and the development of a market economy, the story in Africa was of conquest by European nations and the handing of de facto monopolies to powerful individuals to extract valuable natural resources.
“This benefited small elites rather than the collective interests, creating an inaccurate view among many governments of what capitalism is and the vast benefits it can deliver to the many, not just the few,” said du Plessis.
“More recently, the combination of Africa’s fertile land, abundance of natural resources, and governments that hoped to benefit from foreign investment, but without the technical expertise to retain and direct the benefits of such investment, had made the continent an easy target for exploitation by unscrupulous investors and politicians.
“This leaves the continent in a strange hinterland between development opportunity and crisis. This is, of course, a gross generalisation – many countries have made enormous progress,” he said.
Du Plessis said the majority of today’s African leaders wanted the best for their people, while investors wanted to stake claims ramp up their investments if they are confident no government can simply take away their assets on a whim. 2 Co-operation.
The emergence of nascent trading blocs such as the East AU for example. As parts of the world seem to be fragmenting (for example, Brexit and the EU) or turning inward (the US), there is an opportunity for African nations to collaborate. Speaking with one voice means a strong hand in trade negotiations. 3 Energy and infrastructure, in Africa and for Africa.
It is the same old issue but it is an unavoidable fact that Africa cannot reach its potential without more and better energy and infrastructure.
“To fully leverage the continent’s wealth potential, legal structures need to be put in place to guide Africa’s development agenda from within by enabling entrepreneurship, cutting red tape and bureaucracy, supporting success and selling opportunities to the wider world of foreign investors.
“The world is moving increasingly towards mixed models of capitalism and what is certain is that Africa needs one that both caters for its unique advantages and addresses its equally unique challenges.