This article first appeared in the Business Times section of The Sunday Times on 15 May 2016. The Sunday Times is the biggest weekly newspaper in South Africa.
THIS
week I attended the World Economic Forum on Africa in Kigali, Rwanda, which
continued the fourth industrial revolution theme from Davos earlier in the
year, this time with a focus only on Africa.
What
stood out was the high quality and frank nature of the deliberations, as well
as the realisation that we agree more than we differ as a continent on both politics
and business.
The
conversations were deliberately set up to focus on solutions as opposed to
regurgitating the challenges. That got two key issues firmly on the radar:
inclusive growth and intra-Africa trade.
My
favourite panellist, Winnie Byanyima, the executive director of Oxfam
International, was scathing about economic growth that does not take along the
very people it is meant to serve.
“I
think we focus too much on the figure of growth,” she said. “Is it 10%? Is it
6%? I think the right question should be: Is this growth creating jobs? Is this
growth raising the standard of living of all our people? It’s the quality of
the growth that ’s key here. Growth has been delinked from inequality and
poverty. We
need to bring back that link.”
For
example, between 2003 and 2009, Nigeria had positive growth, but the number of
poor people increased. Apart from the top 10%, the rest of the population’s
share of national consumption declined.
What
is the point of economic growth if it’s not inclusive?
Intra-Africa
trade is estimated at 11% of total trade while on other continents, like
Europe, as much as 60% of trade is within the region. The key impediments to
intra-Africa trade are a lack of transport and logistics infrastructure and
curbs on the free movement of people and goods among the 54 African states.
There
has been talk of one African visa being introduced by 2018. The idea is premised
on the success of the East African Community’s visa, costing $100 (about R1
500) for a 90-day visa valid in three of the biggest countries in the region.
I
don’t see this happening any time soon and my hopes are on African states
implementing less stringent visa requirements for entrepreneurs and business
travellers.
Nigerian
entrepreneur and philanthropist Tony Elumelu made the point that Africa had
reduced itself to a supplier of raw materials.
“I
am an investor in Africa,” he said.
“I have investments in 21 African
countries. Despite all the concerns raised by many on the prospects of Africa,
my investment appetite on the continent has not dwindled. However, in Africa we
produce raw materials. We do not process these raw materials.”
He
said the conversion of raw materials to finished goods was where value was
added to economies. And that did not happen on our continent.
“So Ghana grows cocoa,
takes it out of the country, it gets processed and it comes back as chocolate .
. . Same with cotton and I could go on and on. So let’s begin to challenge
ourselves on how to move our economies into more productive economies. This
will ensure that economic growth is indeed inclusive . . .We need the private
sector and public sector and our development partners to work together.”
The
New Partnership for Africa’s Development has launched the Move Africa initiative
to improve transport infrastructure.
Apparently, it is cheaper for Coca-Cola,
as a manufacturer of soft drinks in Kenya, to buy passion fruit from China, move
it to Kenya, bottle and sell it in Kenya, than it is to buy directly from
next-door Uganda.
Ford
has to charter Airbus 330s to fly vehicles from Johannesburg to Nairobi as it
cannot rely on the roads between the two cities.
Clearly
there are some tough policy decisions to be made by governments if Africa truly
wants to lead the fourth industrial revolution.
The
big opportunity and challenge before us is taking our people along in growing
our economies by increasing intra-Africa trade
