World Economic Forum and Sustainable African Development

By Emeka Chiakwelu
“Keep hope alive,” a mantra propagated by United States Civil Right
leader, Rev. Jesse Jackson, when he was campaigning to become the first
Black President of America. Although he failed short of his ambition, yet
his hopeful dream was kept alive and eventually Barack Obama became the
first Black President of United States. This scenario can be liken to a
hopeful Africa which at this point time is in transition, and arguably
with Africa ascending economic buoyancy the future of the continent is
hopeful and promising.

As World Economic Forum gathering in South Africa took off, the focus was
on Africa with great emphasis on the sustainability of the continent‘s
economic growth. The World Economic Forum’s leitmotif on Africa was
called, “Delivering on Africa’s Promise.” All things being equal, it is
intrinsic to recognize that delivering the promise of political and
economic stability in Africa have core internal impediments that may
inhibits its sustainability. These obstructions are corruption,
insecurity, poor infrastructures and host of other problems. But for now
let us celebrate Africa for the milestone reached despite these obstacles
that grounded in mismanagement and massive corruption.

World Economic Forum detailed its description on Africa economic growth
with a rosy observation: “With an expected annual growth of 5% in
2012-2013, sub-Saharan Africa continues its transformative journey from a
developing continent to a hub of global growth. According to the World
Bank, almost half of Africa’s countries have attained middle-income
status. At the same time, the continent’s positive outlook is threatened
by fluctuating commodity prices, rising inequality and youth unemployment.
To build on its achievements, Africa’s leaders need to strengthen the
continent’s competitiveness, foster inclusive growth and build resilience
in a volatile global environment. Accelerating economic diversification,
boosting strategic infrastructure and unlocking talent are critical
success factors in this new leadership context.”

The noted key point is that Africa’s young and dynamic work force is its
greatest resource and must be sufficiently trained to deliver the African
promise.

Yes! Africa is heading to a better place, a hopeful Africa has not
arrived to the promise land, but one can begin to see that Africa is
gradually but steadily awakening from her deep stagnation and is now
struggling to stand on her feet. I cannot be accused of overstating the
reality or exaggeration on the state of Africa, but African century may
be knocking at the door of 21st century. Africa has suffered long enough
by her own hands and in the hands of outsiders. She has been through a
massive abuse and humiliation – slavery, colonialism, dictatorship and
health crisis but it is beginning to look like the renewal of the Africa
has commenced. It may be a baby step; notwithstanding something
interesting is taking place in Africa.

The hopeful Africa is getting attention of the world. International
organizations, Western think tanks and media are high lightening Africa
with positive stories and responsiveness never seen before. The World
Economic Forum is in the vanguard of giving a positive attention and
reflection on the emerging continent. This is not happening because they
are enamored of Africa but there are arrays of good news coming to Africa
that even Steve Wonder can see them. Moreover, in the era of
interdependence and globalization, interested parties are not driven by
charity.

Africa‘s rising economy is making believers out many prominent business
executives and economists. Beyond World economic Forum, many others are
calling attention to Africa’s rising tide including Mohamed A. El-Erian,
the CEO and co-CIO of PIMCO. This is a big deal; Mohamed A. El-Erian is a
force to be reckoned with on the global business scene, his PIMCO is a
global investment management firm, which is among one of the world’s
largest bond investors with approximately US$1.9 trillion of assets as of
September 1, 2012.

And when El-Erian speaks the world of business listens, his words on
Africa: “Not since the countries of Africa tossed out their colonial
masters several decades ago has there been this much optimism and
excitement about the continent’s prospects. While China’s economic
expansion has slowed, and while Europe and the United States try to dig
themselves out of recession, Africa has not only weathered an up-and-down
global economy — it’s been booming. Consider Nigeria’s stock market,
which gained 35 percent last year, or Uganda’s, up 39 percent. But even
more important is that real gains are finally being made on the ground in
Africa today — ones that speak to the possibility of a breakout phase
that would lift millions out of utter poverty and great misery. Let’s
start with the numbers. According to International Monetary Fund data,
sub-Saharan Africa has grown at an annual rate of 4.8 percent over the
last five years, a period that includes the trauma of the global financial
crisis. That means it has outperformed other developing regions — like
Latin America, for example, at 3.3 percent — and it blows out of the
water the advanced economies, which expanded just 0.5 percent per year.”

There are facts and realities in Africa that cannot be neglected or easily
set aside. For a while most of the industrial economies were mired in
sluggish growth but Africa growth was unstoppable. While the rest of the
global economic growth is 2.4 percent in 2013, African economic is
hovering above 5.0 percent. The five of the ten fastest economies in the
world are in Africa and the whole world is taking notice of that, even
some of African countries economic growths are exceeding 7.0 percent.
Nigeria economy is bubbling with foreign reserve over $50 billion US
dollar. This is why the world is coming to Africa, to encourage a
sustainable growth and participate in the bounty.

Five of the fasted growing economies in the world are In Africa but it
must be highlighted that Africa rising economic tide was mostly driven by
natural resources. But high scientific and technological manufacturing
industries have not taken root in Africa due to myriads of circumstances;
among them is absence of modern infrastructures. Moreover the growing
African economies have not made a dent on poverty and unemployment.

Kofi Annan, former secretary general of the United Nations, commented
recently on this issue: “Natural resource exports have propelled Africa
into the world’s high-growth league. Around one-third of the region’s
economies grew by more than 6 percent in 2012. Strong demand in emerging
markets is set to drive another decade of high prices for Africa’s
natural resources, and foreign investment is on the rise. Mozambique and
Tanzania are poised to emerge as major exporters of natural gas. Guinea
and Sierra Leone stand to reap windfall gains from iron ore exports.
Demand for Zambia’s copper and the Democratic Republic of the Congo’s
cobalt is booming. “

And Annan continued and emphasis on the issue of poverty, “Unfortunately,
the rising tide of wealth is not lifting all boats. Poverty has been
falling far too slowly, and in some countries — including Zambia and
Nigeria — it has increased. Few governments have used the increased
revenues generated by resource exports to counteract rising inequality,
build better health care and education systems or strengthen smallholder
agriculture. Moreover, corruption remains endemic.”

By no means have Africa enormous problems been solved but an emerging and
hopeful Africa is not backing away from her responsibilities. Also, it
must be noted that many small African countries are still struggling with
debts, deficits, poverty and unemployment. The issue of joblessness is
affecting all African nations without exception. Nigeria is struggling
with big gap between the rich and the poor, compounded with large
unemployment especially among the youths. Many active observers are
blaming the rise of sectarian violence in Nigeria due to poverty and lack
of jobs among the restive youths.

Corruption is bane of development in the continent. Corruption has gone
away and continues to impact negatively on the society. The only solace
is that Africa is no longer denying the destructive effect of corruption
and Africa is not defensive about corruption anymore. Even the corrupt
leaders have acknowledged that corruption must be controlled and reduce
to enable sustainable development.

One of the greatest gain made by Africa is the steadily rejection of
indifference and nonchalance that have come to characteristicize old
order and leadership. There is an emerging and flickering sense of
responsibility that is gradually springing up. But yes there are still
quite number of leaders that have refused to change but to erect a bulwark
against wind of change. The old order of greed and life time presidency
must be give way to the emerging democratic dispensations to make African
progrsss sustainable.

The intellectual and talking workshop organized by World Economic Forum
have already done a good job on the awareness of Africa’s enormous
potential. The rising of Africa is being driven by natural resource; it
is not a secret that Africa is natural resource-rich. From oil to natural
gas and precious metals, name it, it is under African soil. But the key
and operating word for a sustainable economic development is
diversification. Africa has to move away from resources extraction to
industrial and manufacturing economies.

Industrial Africa cannot be achieved without modern day infrastructures.
These include modern roads and rails, uninterrupted electric power for
manufacturing and development. Most of the airports in the continent are
poorly equipped and Africa is becoming the dumping ground for outdated and
second-hand aircrafts. All these can be attributed to many air crashes in
Africa. It is quite logical to suggest that Africa’s promise cannot be
realized without adequacy of up-to-date and durable infrastructures.

For Africa to become infrastructure sufficiency an enormous resource is
needed and African cannot be able to afford it with incurable corruption
and gross mismanagement running rampant in the continent. Paul Frimpong,
Associate Chartered Economic Policy Analyst / Financial Economist at
University of Ghana, recently commented on what it takes to improve the
status quo: , “According to the World Bank, about $93 billion is needed
annually to be able to fund Africa’s infrastructure for the next 10 years.
Which is about 15 percent of the region’s GDP. About $60 billion would go
to new projects and the rest would go into the maintenance of the existing
ones. Infrastructure development and management is an aspect in which the
efficient developments within a society rely heavily upon, and is the
cornerstone for socio-economic development. The availability of
infrastructure is of great importance in the realization of sustainable
development desperately needed in Africa. Infrastructure development and
management has become even more essential for Africa’s economic
development and integration.”

Frimpong continued to put an emphasis on the public and private sectors
working together to realize its objective: “Governments are looking to
public-private partnerships (PPPs) to radically improve infrastructure
networks in their countries and enhance service delivery to their people.
They are hoping that this development finance model — where the state
shares risk and responsibility with private firms but ultimately retains
control of assets — will improve services, while avoiding some of the
pitfalls of privatization: unemployment, higher prices and corruption.
This is why Africa has identified the model of Public Private Partnerships
(PPPs) in financing infrastructure. But the question asked is “do we have
the necessary strategies in place to make this work in Africa, as we so
desperately wants it”? I guess some individuals and institutions across
the continent must answer this question.”

The conssus among African experts are centered on Africa attaing
infrastructure sufficiency for a sustainable growth and development.
Blogging on Brookings Institute, Mwangi S. Kimenyi, senior fellow and
director of the Africa Growth Initiative, wrote that the WEF gathering
that took place in South Africa should “focus on issues that are key to
unlocking Africa’s potential and sustaining high rates of economic growth
that are also inclusive. These include strategies to accelerate
investments in infrastructure and agriculture, building resilience,
strengthening partnerships for growth through investments, enhancing
technological innovation, managing natural wealth, nurturing leadership,
and creating strategies to enhance jobs and skills, among many other
pertinent topics.”

Africa’s promise I believed is to have a developed and sustainable
economy that can make existence more palatable for her inhabitants.
Therefore I will advocate an Infrastructure Bank of Africa, where African
nations will borrow and deposit resources solely for maintenance and
building of modern infrastructures. The enormous African resources must
not be squandered; a reasonable portion of the fund derived from these
resources should be deposited at Infrastructure Bank, where it will
accumulate progressively with appreciable interest rate. African
resources must therefore fueled and catalyzed African development and
growth.

World Economic Forum with its global clout can immensely help Africa by
giving a compelling reason for funds derived from natural resources to be
targeted solely for building and improving infrastructures.

To routinely organize a talking workshop on Africa is without doubt a
good thing, but it must be followed by tangible actions that can bring a
real change in Africa economic and geographical landscape. World Economic
Forum in Africa cannot afford to slide into an intellectual exercise and
intellectual workshop where problems are analyzed and dissected without
consequentiality.

Emeka Chiakwelu, Principal Policy Strategist at AFRIPOL. Africa Political
& Economic Strategic Center (AFRIPOL) is foremost a public policy center
whose fundamental objective is to broaden the parameters of public policy
debates in Africa. To advocate, promote and encourage free enterprise,
democracy, sustainable green environment, human rights, conflict
resolutions, transparency and probity in Africa. http://www.afripol.org
info@afripol.org

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