Why Africa remains poor

Why Africa remains poor

Bokang Moeko

“The global financial and economic crisis has revealed Africa’s vulnerability to a number of external economic shocks,” PwC Africa chief Hein Boegman said.

A point in case is the decline in commodity prices fuelled by the economic slowdown in China; a marked decline in the demand for commodities; and the collapse in the value of emerging market currencies against US-dollar in anticipation of an interest rate hike.

According to Kingsley Chiedu Mghalu, Professor of Practice in International Business and Public Policy, the global commodity slump and China’s economic slowdown have plummeted several African economies. Making clear that the continent’s “rise” was a myth, he states that now is time to re-examine the basis of Africa’s recent “boom” and move from feel-good rhetoric to action that will drive genuine economic transformation.

Much like the unpredictability of trends on the catwalks, no amount of foresight into the financial markets could have predicted that times would change for the worst. And that resulted with many commodity exporters reeling with their currencies collapsing since the prices of commodities such as oil and copper began to fall sharply.

What this shows is that Africa has not been getting its act together like it seemed. It was, perhaps, just a darling as far as international trade was concerned.

But African countries got complacent, like Kingsley believes, they mistook a commodity supercycle-fed boom for a sustainable economic transformation; but a boom connotes transient good fortune – enjoy it while it lasts, or save the proceeds for a rainy day. Most African governments opted for the former.

Times are now bad and should the African governments’ attention become more focused on their balance sheet rather than the operations, mistakes will begin to cascade.

What is it that African is still doing wrong? I fully buy into a belief system that despite the spread of formal democracy on the continent, the nature of domestic politics in most African countries has hardly changed. It should be emphasized that real leadership involves not just mobilizing citizens to vote for candidates, but also effective management, strategy, and execution of public policy.

And yet often, in Africa, power is sought for its own sake or to secure control of state resources on behalf of ethnic kin or co-religionists. Politics is not yet, as ought to be, a contest of ideas and programmes affecting all citizens.

We have a long way to go. The $80bn that leaves the continent annually shows how far behind we still are. Corruption still thrives in Africa!

We are also faced with a problem of continent’s leaders continuing to fail to understand – or where they have understood, to apply – the historical lessons concerning how wealth of nations is created.

It seems that a better job could have been done through understanding that achieving prosperity in an ever-changing context of globalization requires creating a competitive economy based on value-added production and export.

Someone once said that Africa’s biggest folly has always been to believe that mineral resources and other raw commodities are automatically a source of wealth. Categorically speaking, I subscribe to that and a popular belief that this misconception is why Africa is the world’s richest continent in terms of resource endowments, but at the same time the world’s poorest in terms of income per capita.

“Africa’s future competitiveness and prosperity lie in the opportunities afforded by science, technology, and innovation. From Nairobi to Lagos and Johannesburg, innovation hubs are springing up. This is not surprising. It is the modern rebirth of Africa’s ancient talents in science, evidenced in the pyramids of Giza, the astronomy of Dogon tribe in ancient Mali, and the Caesarean sections of nineteenth century Uganda.

Africa’s leaders in the public and private sectors have an opportunity to clear the policy bottlenecks that have prevented the commercialization of African inventions, especially in large economies such as Nigeria, South-Africa (which has a more advanced innovation policy than the rest of the continent), and Kenya. Innovation must be deployed to cost-effective, competitive manufacturing and service industries,” Kingsley said.

That is true. Something to change our whole outlook and make us hungry to action real transformation in Africa.

But that is not all Africa can do. While many individual Africans have become stupendously wealthy and are playing more assertive roles in the world of business a vast majority of Africans lag far behind.

“Go to school, get good grades and you will find a job in a good company,” is a falsehood many Africans still subscribe to. A tale as old as time. The economic growth of Africa relies heavily on the robustness of Small Medium Enterprises (SMEs). Entrepreneurship should then be a buzzword, as it is synonymous with economic growth.

So, our biggest challenge in Africa is to change our mindset. To learn both in school premises and outside; be smart and believe in tools we have to change our lives and our economy. Politicians, therefore, cannot be solely blamed for the sins of the world when reality is: Africans are contributing to their own downfall.

Kubasi Business Incubator (KBI) is a point in case of what can happen when government has a nation that believes in itself and dreams big.

There was a time when kente was a sacred cloth worn only by the Akan royalty in Ashanti Kingdom of Ghana. Now, some 375 years since its origin, kente has made its way into the mainstream products that anyone can wear, and has become an important export for Ghana.

Seshoeshoe too should be an important export for Lesotho, with the help of the government of course. Seshoeshoe is supremely beautiful – Bongiwe Walaza’s collection in Mercedes Benz fashion Week, 2013, proved that. It is about time Basotho designers start being visible in both fashion and trade shows.

Entrepreneurship should be on the rise, especially among the youth, as it will gradually replace the dead-end of foreign aid.

Question: Fashion designers, what is the downside of focusing on fashion shows to trade shows? Send me an email at moekobk@gmail.com.

 

 

 

 

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