Basics first please — then Africa will flourish

2012-02-11 00:00

ANY African had to get excited about the goings-on at last month’s World Economic Forum annual meeting in Davos, Switzerland. Everywhere the news was good.

The PWC CEO survey, for instance, showed African business leaders to be the only ones worldwide more confident than a year ago. And in one session after another, we got to see a wave of emerging African leaders who care more about their people than Swiss bank accounts.

Naspers’s bossman Koos Bekker, a regular at the Davos gathering, put it best during one of the well-attended sessions assessing investment opportunities by explaining that Africa is simply normalising, finally breaking a vicious­ cycle of guilt-driven handouts by former colonisers fuelling widespread corruption. As democracy tightens its grip, the old style “Big Men of Africa” are being disposed of by voters. Ushering in more efficient allocation of resources that is translating into improved economic growth.

While most countries struggled through 2011, 45 of the 46 countries in sub-Saharan Africa posted positive economic growth. Another happy fact is that during the past decade, Africa gave the Earth six of the top 10 performing economies­. The continent, too, is the only one whose growth path did not get interrupted by the Global­ Financial Crisis.

Cynics, of course, will snipe about the low starting point. They will dismiss African exuberance as premature while millions still survive on handouts from the rich North and where corruption remains endemic in many countries and where do-gooders like the Bill and Melinda Gates Foundation has upped its disease-combatting fund to $750 million while fretting that’s still not nearly enough. All true, and all reflective of very real challenges at ground level.

But mountains are moved one rock at a time. And provided those stones are being removed, how-ever slowly, you’re going in the right direction. So a big tick for the broad Africa rejuvenation box. What should be worrying us more as citizens of this continent is the needless foot-shooting. The way obvious quick wins are lost through legislative incompetence, including in South Africa.

Among the highlights of my Davos week was a media round table with the top

management of global giant Google — CEO Eric Schmidt plus lieutenants Nikesh Arora, Marissa Mayer and David Drummond. The theme of the hour-and-a-half chat was about how rapidly the Internet is becoming mobile. In June 2011, for instance, for the first time more people accessed Google Maps through the cellphones and iPad than via desktop computers. Half of those accessing Facebook are doing so through mobiles — with the trend suggesting it will reach 80% in five years.

I managed to pop a question around Google’s plans to expand its activities in Africa. Judged by other major corporation hunger for a bigger piece of the African pie, I waited pen at the ready for fresh info about how the “Don’t Be Evil” crowd wants to grab its slice. Instead, Schmidt’s smile turned to a scowl.

Google’s not doing any­thing like as much as it wants to on the continent, he admitted, because it’s just not possible. Africans, he says, are forced to cough up “20 to 30 times what we (ie Americans) pay for data”.

That’s no misprint.

Using Schmidt’s numbers­, downloading information costing an American an

inconsequential $1 would set an African­ back R150 to R225. What’s cheap and almost free elsewhere is a luxury here. Unless it’s addressed, the next technological wave, the next step-change in productivity could pass our continent by, putting a real spoke in the promise of Africa’s leapfrogging appeal.

How come we’re so out of step? Bekker, who seems to care less about pulling any punches nowadays, pointed out in a Davos session that as recently as 2000, South Africa had 50% of the continent’s total phone connections.

But: “Today we’re only number four in Africa — and the sole reason­ is poor government policy and regulation.”

It’s this disconnect between well-meaning desires expressed by our political leaders and the practical reality which will keep feeding Afro-Pessimists.

What does it help to sign trade treaties when the difference between a one and an eight-hour border crossing is determined by one’s willingness to pay the official’s requested bribe? What is the point of pouring billions into infrastructure when criminals rip it out to sell at a fraction of what it cost taxpayers? Get the basics right, get priorities straight, and the rest will follow. If not, the grandest, best-intentioned plans are doomed to failure.

Alec Hogg is the founder and editor in chief of Moneyweb. He blogs daily at www.alechogg. com.

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