By Chris Bathembu
Out of the 10 fastest growing economies in the world this year, six of them are African. This makes Africa the fastest growing region in the world after Asia - regardless of the sluggish growth and economic misfortunes experienced by many parts of the world over the past nine years.
The World Economic Forum (WEF) even predicts that by 2030, one in five people will be African. Combine the continent’s soaring population with technology, improvements in infrastructure, health and education, and Africa could be the next century’s economic growth powerhouse.
The International Monetary Fund (IMF) growth index predicts that Ghana’s Growth Domestic Product (GDP) growth rate would be around 13.73% this year, followed by Côte d’Ivoire at 7.98 growth rate. The IMF goes further to predict that Ethiopia’s GDP growth rate would be around 7.50% this year and Tanzania and Djibouti would grow by 7.24% and 7% respectively.
At face value, all this appears to paint a glowing picture of an Africa that is growing and prospering. But not so, say some observers. Despite this growth, many of the African countries that are seen to be progressing economically are still among the most underdeveloped.
This month, the continent celebrates its unity after the founding of the Organisation of African Unity on 25 May 1963. But for many, there is really little to celebrate. Political freedom means nothing without economic freedom, some would argue.
Poverty and inequality is still rife. With the number of working-age people expected to grow to 450 million over the next two decades, there is just not enough innovation and development to create the much needed jobs. Entrepreneurship is also slow to flourish. Observers say the result could be a worsening crisis of youth unemployment.
So what is the problem? Why are African countries finding it so hard to see the fruits of their economic growth channelled to development and prosperity for their citizens? Why does poverty and underdevelopment still persist, when the region is said to be the fastest growing.
These are some of the questions that dominated talks at the World Economic Forum on Africa held in Durban from 3 to 5 May. Some have, over the years, blamed the West and international institutions such as the IMF and World Bank for Africa’s problems.
But in Durban, the more than 1000 business leaders from 100 countries present, were determined to stop the blame game. They wanted to find solutions. The values of leadership and inclusive growth in Africa dominated the meeting.
The pie’s growing but not everybody’s getting a slice
Everybody agreed Africa was growing. However, the growth was not inclusive, judging by the gap between the rich and poor. It's been the main theme of the meeting in Durban - how can Africa achieve economic growth that doesn't leave the majority of its people behind?
Something needs to be done to ensure inclusive growth and this requires effective leadership of the economy, something many African countries are seen to be lacking.
The World Economic Forum Inclusive Development Index 2017 does, however, list Tanzania, Ghana, Cameroon, Senegal, Mali, Zimbabwe, Chad, Namibia, Uganda and Kenya to be the continent’s 10 inclusive economies.
So what does this say about the rest of the countries? Are their economies not inclusive? Perhaps this question can only be answered by those countries.
But South Africa’s President Jacob Zuma seems to be aware of the problem, if his speech at the meeting is anything to go by.
“As leaders, we have not addressed adequately how we are going to close the gap between the rich and poor in the world and achieve meaningful, inclusive growth,” President Zuma said, speaking at the opening ceremony.
He also said that more needed to be done globally to combat “economic crimes” such as money-laundering and profit-shifting. Illicit financial flows out of Africa that amount to billions of US dollars, have been viewed to be among the critical issues that slows the continent’s progress.
The theme for this year’s WEF on Africa meeting centred on inclusive growth and responsive leadership. Inclusive growth, has also been the buzz phrase in South Africa, following government’s recent pronouncements on radical economic transformation.
Majority of populations remain poor
Those who attended the meeting in Durban agree that the majority of the world’s population remains poor and has been side-lined from the real economic activity. For its part, South Africa wants to change this picture of non-inclusive growth, the newly appointed Minister of Finance Malusi Gigaba told the meeting.
The Minister went to great lengths to outline what South African government leaders mean when they speak of the “radical transformation” of Africa’s biggest economy.
“We have not paid enough attention to developing a productive economy in the township and rural areas,” Minister Gigaba told guests in one of the dialogue sessions in Durban.
“The special problems of the apartheid system have not been addressed sufficiently,” he said. It should therefore be understood why people were impatient for speedy change, the minister said.
But to blame Africa’s problems just on outsiders, is disingenuous, argued other panellists at the dialogue sessions.
Prominent South African politician Lindiwe Mazibuko called for a new generation of leaders.
“Africa has a leadership vacuum,” Mazibuko said, adding that the current crop of Africa’s leaders have failed to deliver.
“We need a different line of understanding of what leadership in an African society is, beyond politics and business, into the non-profit, into civil society, into churches, schools, communities. We need to redefine leadership,” Mazibuko said.
This was what echoed by Professor Klaus Schwab, Founder and Executive Chairman of the World Economic Forum.
“We need leadership that respect human dignity and diversity. We need a value-based leadership that serves the community.”
Minister Gigaba offered solutions. Africa must trade with itself, he said.
“African countries need to identify new markets to focus more on trading with one another, identify markets in emerging economies and trade with those countries that are still open to trade.”
Although there were opportunities for African countries globally, these often came with risks.
“However, I think on the overall, we need to take a positive outlook and focus on what we need to do in order to grow our economies to sustain the growth over the medium to long term,” he said.
Lack of innovation was also cited as one of the issues that were slowing Africa’s progress. Available statistics at the meeting revealed that Africa has fewer than 100 scientists per million people, one eighth of what it needs.
It’s not all gloomy
Before you think the future is all gloomy for the continent, the WEF provides a few numbers that prove the future is African.
54%
Africa will account for more than half (54%) of the 2.4 billion global population growth in coming decades. The United Nations predicts that between 2015 and 2050, Africa will add 1.3 billion people, more than doubling its current population of 1.2 billion.
2 billion
As part of the continent’s phenomenal population growth, UNICEF predicts that two billion babies will be born in Africa over the next 33 years.
High fertility and improving child survival rates mean that by 2050, 40% of under-fives and more than a third of all children under 18 will be African. In 1950, only about 10% of the world’s children were African (Figures provided by the World Economic Forum). – SAnews.gov.za
