Africa future is in exploiting resources

Over the past few decades, economic growth and development have become elusive for Africa.

The continent has gone through phases of economic transformation that include a focus on the transformation of infrastructure, agriculture and the extractive sectors.

This can help to transform the continent to achieve the aspiration of the Africa We Want theme of the African Union’s Agenda 2063 and become prosperous with sustainable economic growth.

The African heads of state and government signed the 50th anniversary solemn declaration during the AU golden jubilee in 2013. That marked the rededication of the continent towards the pan-African vision of an integrated, prosperous and peaceful Africa, driven by its own citizens, representing a dynamic force in the international arena.

WASHINGTON CONSENSUS

It seems the adoption of the Washington Consensus, among which are prescriptions of free trade, has not borne adequate fruit in terms of uplifting many of the countries to middle-income status.

While Africa has made significant progress in reforms to accelerate the pace of economic development, more needs to be done, especially in making globalisation work for the continent.

Economic pundits have argued that, with good political systems and governance, coupled with a democratic set-up and free trade, economies would easily achieve progress.

The Africa Continental Free Trade Area is one such opportunity that, in the next decade, could bring economic development. The challenge is transforming from a low-productivity region whose major exports are raw. Despite efforts to grow manufacturing, a lot remains towards achieving value-added exports.

The other deterrent is continued overlapping of Africa’s regional trading arrangements. Its future lies in creating an African Economic Community integrating the various regional trading blocs, which is envisaged by 2028.

HOME-GROWN SOLUTIONS

The continent is resource-rich, with the dominant sectors being the agriculture, extractive and service sectors. To create and retain wealth, home-grown solutions such as support to start-ups, partly in agribusiness, extractives and services, is imperative.

The objective should not only be to attract investments but also make technological transfers mandatory while ensuring that a large sum of skills development and wealth is retained.

Building African brands and increasing intra-Africa trade have the potential to transform the economic situation.

Promoting foreign investments and trade with countries outside the continent is less beneficial if intra-African trade continues to be low. The basis for successful trade between Africa and the rest of the world is a buoyant intra-Africa trade and investments.

Economic theory, practice and history has proven that trade and investment success emanate from within, which act as a stepping stone to flourishing trade with the rest of the world. There should be lessons from the East Asian miracle as well as the transformation of European nations from agrarian to industrial in the 19th century.

INVESTMENT PROMOTION

There should be more trade and investment promotion activities within the continent while African countries should invest more resources in creating local linkages among her business people.

Trade and investment are bound to be more among neighbours than with long-distance markets.

The experience in the inaugural Intra-Africa Trade Fair in Cairo in 2018, where deals worth at least $32.6 billion (Sh3.2 trillion) were inked largely by African corporates, proved that the future of Africa lies in its commitment in building its own enterprise and harnessing its own resources.

 The Africa Export Import Bank and the AU should be applauded for such an initiative that has turned the impossible to possible. Such trade promotion activities have strengthened African enterprises and thus play a critical role in the retention of Africa’s wealth within.

Strengthening both public and private trade promotion institutions and enhancing collaboration among them would contribute significantly to leapfrogging to high economic income status.

There are cases of Africa’s own corporates that have grown within and become multinational corporations with a global reach, tapping the global stock of wealth.

It is, therefore, evident that Africa’s future lies in real technological transfers, fostering manufacturing and having more Africans through private enterprise to participate in building the Africa we want.

The Covid-19 pandemic should be a wake-up call to manufacture Africa, buy Africa and build Africa.

Mr Biwott is executive director of Agrinomic Africa Ltd;