How infrastructure devt can turn around Africa’s fortunes
The African continent is rising is out of the question. However, the continent is still plagued by a myriad of challenges that still hold back its potential, especially efforts aimed at improving the business environment and poverty alleviation to ensure sustainable economic growth.
That’s why Africa needs leaders who can take on these challenges and translate them into solutions so that we achieve the ‘Africa we want’ as per the theme of the recent-concluded 27th African Union summit in Kigali.
Ensuring that there are supportive policies for entrepreneurship and trade to thrive on the continent should be some of the priority for any African leader that wants to see the continent rise from the ‘ashes’ to achieve the African renaissance dreams proclaimed by the likes of former South African president Thabo Mbeki.
With the majority of the continent’s enterprises falling in the category of small-and-medium enterprises (SMEs), it is essential that leaders enact policies and regulations that propel them further and help make them sustainable. This is putting in mind the fact that SMEs are the backbone of Africa’s economies, creating millions of jobs and supporting equally huge numbers of households.
While launching the Thabo Mbeki Foundation a few years ago, former Ghanaian president John Kufuor said the continent had a new breed of leaders spearheading the African renaissance, shaping and making it reality. But have they, or the renaissance thing is just a dream? It’s all a work in progress I guess. So, let me highlight a few things leaders can tackle to address most of the challenges hampering businesses growth across the continent, which would in the long run contribute to the realisation of the new African aspirations.
First of all, African leaders need to draft policies that are supportive of business, as well as those that are pro-people and deepen the Pan-African spirit.
Ideals of Pan-Africanism like solidarity among the African people on the continent and in the Diaspora, are crucial for promoting unity as we seek to “unify and uplift” the continent. Besides, this will also benefit trade and investment among countries on the continent, which will eventually help solve some of challenges faced by African businesses like lack of markets. However, the challenge of poor infrastructure and cumbersome border policies must be addressed for intra-country and intra-region trade to flourish. Most African countries are not trading with each other, preferring to trade with Europe and America where they face immense challenges as they largely deal in primary products.
If infrastructures, including transport means, energy and information and communication technologies, are improved the continent can add up to 2 per cent GDP rate per year and also increase productivity by 40 per cent, according to AU statistics. In 2010, the World Bank attributed more than half of recent impressive growth recorded in Africa to infrastructure.
This indicates that once the infrastructure is in place, the continent’s economies can advance further, offering many countries the required stimulus for growth.
Therefore, for Africa’s renaissance aspirations to be realised, leaders should be strategic and collaborate, particularly on infrastructure development, as well as promoting processing of agricultural produce, building the human resource through vocational skills training, and supporting industrial development by offering relevant incentives and enacting sector friendly laws. This will create more employment opportunities, make the continent more competitive in an increasingly globalise world, as well as attract more FDIs and expertise to help advance the continent’s industrialisation aspirations. That is why trade policies must be consciously designed, implemented and regularly monitored and evaluated to ensure they achieve the desired goals.
These efforts should augment the ambitious continental free trade area (CFTA) initiative that seeks to promote trade with the continent, among others.
The CFTA will be made up of over one billion people, with a GDP of $3 trillion. It will also boost trade by 50 per cent among African countries by 2022. The continent’s gross domestic product (GDP) was also estimated to rise from $1.7 trillion in 2010, and is projected to rise to $2.6 trillion by 2020, while consumer spending will grow from $860 billion to $1.4 trillion over the period.
Already, plans are underway by three blocs on the continent to create the largest free trade area on the globe of over 600 million people from the Cape to Cairo. The tripartite free trade area will bring together the East African Community, the Common Market for Eastern and Southern Africa and the Southern African Development Community; the — are to be united into a single new zone. This is envisaged to ease barriers to trade, and stimulate $1trillion worth of economic activity across the region of more than 600 million people.
However, there is need to support the private sector with improved infrastructure and other facilities and initiatives to enable free movement of people and goods. Easing movement of goods and people is critical in driving the trade, and why the highlight of the Kigali AU summit was the launch of the African e-passport. This remarkable step will drive trade on the continent and bring about sustainable socio-economic development.
African leaders should believe that globalisation and international trade requires countries and their economies to compete with each other. Economically successful countries will hold competitive and comparative advantages over other economies, though a single country rarely specializes in a particular industry.
In addition, African leaders should engage in the war against corruption in doing business because the impact of the vice on the masses is huge, including poverty, poor infrastructure, and lack of drugs in health facilities, and unfair competition in business. Greed and unethical business practice have brought economies down, destroying lives and rendering others destitutes. This is values… personal and professional values must be allowed to converge and, hopefully, help create culture that supports sustainable business growth.
Like the proverbial phoenix, Africa is being reborn and will soon take up its right place in the comity of continents.
Growing up in Rwanda, I have seen how the country has rebuilt itself following the 1994 Genocide against the Tutsi, that left over a million Tutsis dead and the economy in shambles.
However, the country has been able rise from that gray history using mostly home-grown solutions to become one of the fastest growing economies in world today growing at over 7 per cent in the first quarter of the year.
This, and other lessons from elsewhere can be replicated by the continent as it strengthens its renaissance agenda and continue to rise higher.
Posted in The New Times first, but this is the original article