• Sunday, July 21, 2024
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Undermining the gains of WEFA 2014


Of all the events that placed Nigeria at the centre of global focus last year, the hosting of the 24th edition of World Economic Forum on Africa (WEFA) 2014 was spectacular.

As the Forum prepares for its 2015 Annual Meeting in Davos, Switzerland, later this January, and the 25th edition of WEFA in Cape Town, South Africa, come June, time indeed is ripe to take inventory of what has become of the hopes and opportunities that were widely believed to have been unlocked at the Abuja summit in May 2014 towards placing Africa on a track of inclusive prosperity. But nothing serious appears to have been achieved, from available data, and the seemingly attracted gains are fast fading away.

For the entire region, the 24th edition of WEFA was quite an image-boosting event. For the three days it lasted in Abuja, global media attention was concentrated on the already ubiquitous tale of Africa as the world’s last economic frontier. Amidst this pleasant story of Africa Rising was another not-too-rosy one of a probable demographic disaster that Africa’s Next Billion could trigger. The big irony was that prior to WEFA 2014, these two opposing narratives were compelling and simultaneously told by many.

As one who has followed keenly and commented on WEFA since 2010, I rightly observed that bringing it to West Africa for the first time in 24 years, and to be hosted by Africa’s largest and most populous economy, was timely. For an event with a coverage that was reported by Elzie Kanza, director and head of Africa at WEF, to have reached over 2.1 billion people, about 30 percent of the world’s population, and attracted over $68 billion in investments to the continent, Ogho Okiti, a Nigerian economist, was right to have much earlier in 2013 described the then next year summit as “The forum in the heart of Africa”.

At Abuja, public and private investment funds were attracted to finance projects in infrastructures, ICT, education, agriculture, primary health services, energy, technological development and skill acquisition. These were the fertile grounds that would germinate the seed for economic empowerment to tackle massive youth unemployment and bridge Africa’s wide income gap.

There was the $16 billion investment in Nigeria pledged by Aliko Dangote, Africa’s richest man, through his conglomerate, The Dangote Group, with the plan of creating “over 180,000 jobs over the next four years”.

Also for the first time in the history of the forum, a special $20 billion initiative termed “Safe School Initiative” to support school children, particularly in the terrorism-ravaged north-eastern part of Nigeria, was launched by Gordon Brown, UN Special Envoy for Global Education. The UN and Nigeria’s government instantly made equal donations of $10 billion each to make up the fund.

Really, Africa’s growth in spite of its daunting challenges has surprised many. Maintaining an impressive over 5 percent growth trajectory over the years, African economies have continued on a steady trend of remarkable resilience to contemporary global economic stagnancy and financial shock, to the admiration of international investors and development experts.

The albatross, however, is that while economic growth has leaped exponentially, especially on the strength of GDP rebasing in some countries, over 70 percent of the continent’s 1.1 billion people (a figure that is projected to hit 2 billion in 2050 and 50 percent of whom are 19 years old or younger) have been left outside of this prosperity.

A number of factors, internal and external, hinder economic expansion from translating into inclusive growth on the continent. These factors, popular among which is the recent scourge of Ebola Virus Disease (EVD), have particularly been damaging in the last one year.

EVD is quite virulent. For some time it was racing menacingly across the West African corridor, leaving death and disaster in its wake. A disease whose spread is volcanic in time and space, Africa’s EVD reached a hysterical height last year when, on July 20, “it flew on a passenger plane” from Monrovia through Lomé into Lagos, a bustling mega-city of some 20 million people who cluster around scarce public infrastructures.

While it is cheering to tell of how Nigeria “miraculously” overcame the Ebola Virus, the story of its epidemic grip on Guinea, Liberia and Sierra Leone, three most-hit economies, continues to dampen hope.

In the fall of 2014, the World Bank in its Africa’s Pulse – an analysis of issues shaping Africa’s economic future – projected that a key risk to Africa’s economy is a contagion of the Ebola outbreak. The report said that “without a scale-up of effective interventions, growth would slow markedly not only in the core countries (Guinea, Liberia, and Sierra Leone) but also in the sub-region as transportation, cross-border trade, and supply chains are severely disrupted”.

Corroboration of the World Bank’s projection for Africa came from the IMF that same period. In its October 2014 World Economic Outlook (WEO) tagged ‘Legacies, Clouds, Uncertainties’, IMF posited that “home-grown factors pose risks to the outlook for the region. Should the Ebola outbreak become more protracted or spread to more countries, it would have dramatic consequences for economic activity in the West African region”.

Enase Okonedo, dean of the Lagos Business School, in her “Ebola’s impact on the West African economy” (The Conversation, Oct. 2014), describes how the virus has caused serious economic toll on the region’s trade, tourism and agriculture. These three sectors, in my view, hold the biggest prospects of job creation for Africa’s army of unemployed youths.

Overall economic situation in Nigeria perfectly shows the general outlook for Africa. Nigeria is “Africa’s testing ground”, The Economist (Aug 23, 2014) reported. “To make it big in Africa, a business must succeed in Nigeria … used as shorthand for the business opportunity in Africa, it is also a summary of the continent’s shortcomings,” the magazine further noted.

With a GDP figure that is 26th globally, a teeming and restless young population that is projected to overtake that of the USA in 2045, a vast arable land, abundant natural resources endowment and a resilient people with strong entrepreneurial spirit, things ordinarily are supposed to be going on well for Nigeria. But the country’s pervasive socioeconomic malaise works to stifle its development.

Nigeria’s economy is bedevilled by chronic energy poverty (generates below 4,000MW) and its crude oil production suffers from massive theft in its Delta region. Insecurity due to activities of terrorist groups, mostly Boko Haram in northeast Nigeria (like Al-Shabaab in Kenya), global commodity price volatility (Brent Crude is most likely to dip as low as $40 in the 1st quarter of 2015), collapsed infrastructures, high level public corruption, and geo-political instability are some of the banes of development in Africa’s biggest economy. These vices affect the rate at which government’s policies can have even impact on the populace, and only a handful of people are successfully lifted out of poverty in a generation. This sorry case represents in microcosm what is happening in the African continent as a whole.

So, inequality amidst vast growth continues to undermine development plans in Africa, engineering uneven distribution of hope, opportunity and prosperity. One urgent task therefore is striving to make our lopsided growth more inclusive, and as Oxfam International has posited, the time to “even it up” is now.

Given the magnitude of what went into organizing WEFA 2014, which theme ‘Forging Inclusive Growth, Creating Jobs’ was very apt at the time, and thinking of the unprecedented huge prospects of a continental economic transformation that was presented by the success of the summit, future editions, if the potential gains are not harnessed, will only remind one of an annual ritual where leaders only gather to “talk the talks but never walk the talks”. Hopefully, the trend will change.

Oluwatoba Oguntuase