Africa’s big challenge

2017-04-23 06:17

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Making Africa Work: A Handbook for Economic Success by Greg Mills, Olusegun Obasanjo, Jeffrey Herbst and Dickie Davis

Tafelberg

240 pages

R280

’lim’ uze ushay’etsheni!’ – plough until you hit a boulder

African countries, many of them still poor, must prepare for a massive increase in population and, accordingly, the number of young people seeking employment.

We are hopeful about the prospects of African countries, but only if tough decisions are made now.

The old “business-as-usual” approach of governments and leaders has to change if they are to cope with Africa’s pending population boom.

Reform necessitates fundamentally changing the way in which African economies work.

It means being open to international trade and capital rather than aid, being reliant on enterprise rather than personalised and patronage-ridden systems, while the aim of government should be private sector growth rather than public sector redistribution.

Underlying all of these initiatives is the imperative for a sense of urgency to create jobs before the population wave overcomes African societies.

Even though the continent enjoyed impressive economic growth rates in the 2000s of around 5%, not enough has changed.

For one, this growth was in great part not the result of improved governance, but rather a sharp rise in commodity prices, underpinned by soaring Chinese demand.

Now, with commodity prices in decline, there is concern that many African countries did not do enough during the “fat” years to reform their political and economic governance practices.

As Warren Buffett famously observed: “Only when the tide goes out do you discover who has been swimming naked.”

This is not about economic growth alone.

Another measure of the success of African reform is in the stability of its societies.

The continent has been the site of two-thirds of conflict-related deaths worldwide since 1990.

The poor are also still with us. More than 40% of Africans live in extreme poverty.

Despite these realities, so far, it has proven difficult to change the old ways of running Africa’s economies.

The inertia reflects the contemporary retreat of democracy and “misgovernance” – when government works efficiently, but only for an elite.

In this environment, the incentives for liberalising economies are outweighed by the benefits of keeping things just as they are, as elites are easily able to manage and deflect international or other disincentives designed to encourage change.

However, those leaders who, today, have the foresight and vision to make the necessary choices for change will, in the future, be renowned for the prosperity and stability that they brought to their countries.

Meanwhile, those rulers who perpetuate the old ways will see the further impoverishment of their nations and their own rule threatened.

The Arab Spring, when young people who perceived that they had no future overthrew leaders and destabilised countries in a matter of weeks, highlights how quickly such tensions can spill over, even into political collapse.

The threat is particularly severe now that power is increasingly in the hands of individual citizens enabled by the rapid spread of mobile communications.

It seems inevitable that the number of failed states in Africa – already the largest in the world – will increase if leaders do not move to address the imminent challenges presented by the large population increases that are projected, with the concomitant suffering and chaos that accompany institutional collapse.

Similarly, other critical challenges faced by African countries, including adjusting to climate change, improving the status of women and reducing inequality, can be addressed only if states grow their economies and generate more jobs.

Otherwise, the demographic crisis will become all-engulfing and prevent action on anything else.

One of the starkest failings of postcolonial African governments has been their insularity.

Africa’s challenges should be understood in the context of universal norms and practices, and not as isolated or unique problems.

Not so long ago, after all, many Asian and Latin American countries found themselves under circumstances that were very similar to much of Africa today.

Whether devising industrial policy or trying to achieve equity through growth, Africa does not have to reinvent the wheel: a lot can be learnt from others.

Read more on:    economy

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