• Sunday, July 14, 2024
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Africa in a world adrift

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Africa’s destiny lies in her hands. As the continent’s leaders in business, civil society and government concluded their annual deliberations which held this year in Cape Town, South Africa between May 8 and 10, it became even more glaring that much of what is needed to finally unlock Africa’s potential will have to be internally driven; and this is without prejudice to the current global shift towards inter-regional co-operations and alliances.

The World Economic Forum (WEF) on Africa 2013 seeks ways and means of delivering on the continent’s promise of transformation, which last year’s forum in Addis Ababa had sought to shape. All along, the topics of inclusive growth, infrastructure deficit, energy poverty, regional integration, corporate governance, massive youth unemployment and sustainable development have dominated Africa’s development debates; and darkening the continent’s seemingly bright prospects as the next global economic frontier.

Truly, Africa presents a classical model of Dani Rodrik’s Development in Reverse. The continent’s biggest economies and largest cities showcase an uneasy co-existence of extreme wealth and abject poverty, and a ‘mishmash’ of First World technologies (especially in the extractive and telecoms industries) with the Third World’s agrarian means of production. From Lagos to Johannesburg, Cairo to Cape Town, Nairobi to Kigali, and in Rabat – few of African rising cities – are also found dangerous trends of rising inequality. Lagos in particular, an emerging megacity with an estimated population of 21 million and an annual growth rate of about 5 percent, is a perfect microcosm of economic dualism. In its elitist highbrow areas live some of the wealthiest entrepreneurs and their cronies in Africa who have access to government’s resources. There also exists a cluster of world-class businesses and the spoils of ‘the good life’. But the percentage of the population in this class is infinitesimally low. In other larger parts of the city are “slumps and ghettos” housing millions of people, mostly youths, women and children with little or no link to the bourgeoning prosperity that circulates among the few rich. This is not peculiar to Lagos. It is a common feature of African economies that is ubiquitous in all emerging cities on the continent, and African leaders must bear in mind that wide income gap, more than any other factor, impedes inclusive growth and poses systemic risk to the fabric of any economy.

Delivering on Africa’s promise will no doubt require development partners from other regions of the world, but the realities of recent years ought to have taught African leaders great lessons that no region of the world will help place the continent’s feet on the development ladder; it has to resolve by itself to assume global leadership position before other countries can key into its dreams. Again, it is going to be foolhardy, at a time when major advanced nations of the world are facing economic woes, for Africa to continue to build its future on hopes of aid promises from a strained Europe or a reluctant USA; just as it will be a mark of purposeless leadership for Africa not to spearhead efforts at tackling climate change in the region but rather relying heavily on the promises of advanced nations about carbon-emission cut and greening the global economy. Like Jeffrey Sachs recently said, “Rich countries have not been keeping their own side of global development and climate deals.” This was clearly manifested last June at the RIO+20 Earth Summit in Brazil.

Every region of the world seems at the moment to have enough troubles in its hands and former global economic super-powers are losing their leadership positions to previously unexpected regions. To Sachs, this is a signal of a world adrift in which dominant economic bloc of the North Atlantic (the EU and USA) declines steadily as the emerging economies of the world (mostly the BRICS) rise rapidly, and resource-rich Third World countries, especially in Africa, continue on a steady growth path in defiance of the global economic recession. Sachs maintains that a “shift to such a multipolar world has the advantage that no single country or small bloc can dominate the others. Each region can end up with room for manoeuvre and some space to find its own path”. Yet, as this development expert further asserts, “A multipolar world also carries great risks, notably that major global challenges will go unmet, because no single country or region is able or willing to coordinate a global response, or even to participate in one.” In my opinion, therefore, Africa must look inward to be able to successfully unlock its talents if it is to truly become the next global investment destination.

Most of the continent’s challenges are closely linked to poor governance. Talk of the infamous resource curse or low competitiveness, corruption or infrastructure deficit, fragility and conflict, to mention a few of Africa’s banes of development; the policies of governments across Africa have continued for more than five decades to discourage merit, innovativeness, healthy competition, ethnic and religious tolerance as well as political stability. Most African countries are not only landlocked but also operate isolationist economic policies that stifle competition in free markets and impose trade barriers with the effect of retarding regional integration. Governments, especially in resource-rich nations such as Angola and Nigeria, have continued to ignore the need to explore other income and employment generating sources different from oil and other mineral resources, and agriculture which gives Africa comparative advantage over other regions is left largely unfunded and undeveloped. This reduces opportunity for economic diversification and portends serious threat to the continent’s GDP in the wake of Shale gas revolution in the region’s major export-partners such as the USA and China.

At a projected annual growth rate of 5 percent at a time when major world regions are sliding into recession, Africa looks promising. But its teeming young population and abundant natural resource endowment are both potential triggers for boom and gloom depending on the choices that are made by the continent’s policymakers and executors. For the year 2012, good governance rating in Africa was considered so abysmally low that the MO Ibrahim Foundation had to return home with its much coveted prize for good governance in Africa as no country was deemed qualified to win it. It is hoped that after the deliberations that took place at the 23rd World Economic Forum on Africa, significant improvement would be recorded at the end of this year. Most importantly, the economic growth being witnessed in Africa must be transformed into physical development through the pursuance of inclusive growth by a cooperated public and private sector agenda.

Africa risks an implosion of the Arab Spring fashion as its price of inequality unless, as Joseph Stiglitz puts it while warning the USA in his recent book about the effect of a similar threatening wide income disparity, the top 1 percent wealthy class realises that “there is one thing money doesn’t seem to have bought: an understanding that their fate is bound up with how the other 99 percent live.” The theory of this Nobel laureate in economics and former IMF chief economist, I strongly believe, also holds good for Africa today. At any rate, African leaders must realise they do not have the luxury of time to play around with the destiny of about 1.3 billion people. The time for Africa to rise and shine is now! 

 

Oguntuase, essayist, development-policy analyst, and a Young African Professional, is founder, Oladog Artistic and Research Communications.

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