University of Dar es Salaam students listen attentively to a
presentation. Adequate investment in education will enable not only
Tanzania, but the entire African continent to find solutions to their
problems. PHOTO | FILE
By Frederick Sumaye
In Summary
- Africa is not isolated from global developments and challenges that face other continents and countries
Background and history
Africa, the second largest continent in size (land
mass) and population (about one billion inhabitants), is the poorest of
all continents in the world. Yet, the same Africa is said to have more
natural resources now than any other continent. What a contradiction!
It is also important to note that Africa is made up of 54 independent
sovereign states. These are not states like the States that make up the
United States of America. Ours are sovereign countries that are
independent from each other and they are different in many aspects from
each other almost just as their numbers differ. So, when we refer to
economic growth, there are those that do well and there are those that
don’t do well at all. When we talk of political stability there are
those that have enjoyed peace and tranquillity all the time and there
are those, which have never seen peace etc.
Africa has its history, some similar to other
continents, but a lot quite different from what other continents have
undergone. Some of the historical events, include the slave trade that
tore apart the fabric of society and took away the strong labour force
that was required for the wellbeing of society, the 1884 Berlin meeting
that subdivided Africa into small portions or colonies, known as
scramble for Africa, another scramble for Africa during the cold war era
and now another scramble for Africa for natural resources is on. All
these scrambles resulted in either total exploitation of Africa or
derailed Africa from a normal course of development. A good example of
this derailment phenomenon is the Berlin meeting, where although
countries have attained their independence from their colonial masters,
they still depend on the colonial masters in many aspects. It seems the
colonial masters inflicted a dependency syndrome that seems difficult to
disengage from. The subdivisions made for the purpose of ‘divide and
rule theory’ also inflicted an economic weakness that makes these
countries not to be economically competitive in the modern globalised
world.
Challenges and opportunities
Leaving the historical perspective aside, Africa
is not isolated from global developments and challenges that face other
continents and many other countries. We have witnessed major
developments and challenges around the globe, Africa inclusive. In
particular, there has been emergence of market economies, which follow
neoliberal approaches as opposed to command economies, which were
controlled centrally by governments or even political parties.
Liberalised economies have brought a stiff competition in international
markets driven and controlled by the private sector, particularly from
developed economies. African economies face stiffer challenges as they
have not developed muscles strong enough to absorb the shocks of
competition.
Since the 1960s, when many African countries
attained independence, there were some developments in investments and
economies as well. Some countries adapted the centrally planned and
controlled economies, while others adapted the capitalist mode of
liberalised economies, depending on who the godfather was or who was
influencing politics in the country. Today, most countries in Africa
have liberalised their economies and trade and markets have been left in
the hands of the private sector. However, this in its self is not a
panacea for economic prosperity and development. There are many other
factors that have to be addressed to, to arrive at the level of
development that we need for our economies, our countries and our
people. However, in my opinion there is no single approach, which is
perfect on its own, there should always be a good combination of the
approaches to get the success we require.
According to the World Bank, most African
countries, especially those in the sub-Saharan Africa, in the recent
years, have been enjoying robust and sustained economic growth.
Interestingly, most African countries were able to resist a recent
global financial crisis. Even with this robust growth averaging about 5
per cent annually, many, if not all, sub-Saharan Africa countries are
very poor and cannot adequately provide the necessary social amenities
to their people. Most people are very poor with about one third of the
population still living below $1 a day.
However, we have the problem of translating this
growth in improving the welfare of the people in our countries. There is
serious income inequality and a high rate of unemployment. This means
that the growth we are proud of is not inclusive. So, as Dr Donald
Kaberuka, the President of the African Development Bank (ADB), suggested
one time, we need to have inclusive growth. To achieve this, we should
be able to create employment for the youth, invest heavily in
infrastructure and quality education and to try to improve agricultural
productivity (which is instrumental in improving the welfare of the
majority of the population).
Reports show that Africa is now receiving an
increasing share of foreign direct investment and if other factors
remain constant it is projected that the foreign direct investment will
double by the year 2015. This increase is mostly compelled by the
booming extractive industries in Africa. Relatively, exports have also
increased and school enrolment is increasing.
Some of the important challenges include:
• Africa’s inability to compete in global markets
because of its low capacity to produce, low quality of products and
non-competitive price of goods and services. In today’s modern
economies, market forces are the best regulators and stimulators of the
economy. Africa is less competitive due a variety of factors as
mentioned earlier. Most industries in Africa do not use the most modern
technologies that are efficient and produce good quality products at
affordable prices. Hence, Africa’s products even when given preferential
treatment sometimes fail to meet required standards.
• Political stability, peace and security. This,
though may not be a serious problem in many countries, is still a
problem in quite a number of countries. No one is bold enough to invest
in a country, where there is no peace. Where there is no peace there is
no governance and where there is no governance there is no system that
works. Instability in some of our countries is also costing even those
countries that are thought to be stable. Because of these worries at the
back of their minds many foreign investors are hesitant to commit their
big investments to Africa and if they do they make sure they get their
returns at the shortest time possible. This in turn makes investment
very expensive to the economy
No comments :
Post a Comment