Some of the most pressing challenges the continent Africa is facing today can’t be addressed separately
If there is anything left in the open following the 2007 – 2008 global financial crises, it is the glaring reality of just how vulnerably dependent most countries in Africa are on too few export commodities of too few sectors. It is a grim picture of the continent worsened by African countries’ own inability to make the best of nature endowed continent, fluctuations in global commodity prices, and lack of demand depressed by the global financial crisis.
Although Africa has registered an impressing economic growth in the decade between 2000 -2010, backed largely by a relative peace and security and political stability, according to a 2011 OEDC review on Africa’s economic diversification, “as [the continent] continue along the path of economic progress, it is imperative that [African countries] find ways to diversify their economies, namely by strengthening non-traditional sectors; expanding their range of products and exports; and engaging with new economic and development partners.”
Currently, the trouble with economic diversification is not the only challenge Africa is snowed under. The continent not only has the highest percentage of young people anywhere in the world but the highest youth unemployment, and owing to lack of infrastructure, it is one of the least connected continents both with itself and with the rest of the world.
No other discussion over these issues comes as timely and as relevant as a discussion due to start come May 8th in Cape Town, South Africa, by the World Economic Forum (WEF) on Africa. Under the theme of “Delivering on Africa’s Promise,” The forum will be attended by more than 900 global policy shapers, including African head of states and prominent business people such as Mo Ibrahim, Chairman of Mo Ibrahim Foundation and Sanusi Lamido Sanusi, Governor of the Central Bank of Nigeria, who are both co-chairs of the Forum. The event will bring to the table three topics that are “mutually supportive” and are essential for the continent: Accelerating Economic Diversification, Boosting Strategic Infrastructure and Unlocking Africa’s Talent.
In a written interview with this magazine, Elsie S. Kanza, a renowned economist from Tanzania and Director of Africa for World Economic Forum, said the three topics chosen by WEF for discussion were “mutually supportive rather than mutually exclusive.” According to her, economic diversification creates demand for better infrastructure and skills; better infrastructure acts as a growth pole for new wealth creation, which creates more demand for skills; and talent development creates a breeding ground for entrepreneurs and gives the continent the means to push through improvements in infrastructure. “I would argue that you cannot have one of these drivers without the other two, which makes it all the more critical that Africa’s leaders act fast to achieve these goals,” Kanza said.
A blessing in disguise or vice-versa?
Quoting the World Bank, WEF says that currently, “almost half of Africa’s countries have attained middle-income status.” But according to WEF itself, “the continent’s positive outlook is threatened by fluctuating commodity prices, rising inequality and youth unemployment.”
According to a 2011/12 World Bank report on Africa Development Indicators, currently, there are about 70 million more Africans under the age of 14 than barely a decade ago, a number which is expected to rise by another 76 million over the next 10 years.
Some economists capitalize on this figure and talk of a promising demographic dividend; but others caution that fuelled by youth unemployment and failure by the African states to tap into the talent pool the continent is endowed with, such shift could simply become a demographic disaster. “Africa needs to make sure that the continent reaps a demographic dividend from its young population rather than face a demographic time bomb”, Kanza said. And according to Linah Mohohlo, Governor of the Bank of Botswana, “the growing population also poses challenges for education. Just to maintain present primary school enrolment rates, governments will have to increase the number of classrooms and teachers by about 14%.”
In the areas of infrastructure the rise in Chinese funding for a number of infrastructure projects throughout the continent has been welcome news in many parts. Program for Infrastructure Development in Africa, (PIDA), the continent’s own multi-billion dollars initiative to improve infrastructure in four key areas also offers some great hopes, but in a recent letter written to The Economist, Donald Kaberuka, President of the African Development Bank (AfDB), said, “Two-thirds of the ADB’s funding is targeted at infrastructure, but the funding gap is still $50 billion a year for the next decade.” Kaberuka further cautioned that “public funds alone will not suffice and countries will have to turn also to the international capital markets.” Here is where the continent’s challenge in capitalizing its resources by maximizing and accelerating its economic diversification and tapping into the continent’s talent pool comes to the foreplay.
Kanza believes Africa holds great promise, “both as an economic growth pole and as a desirable place to live.” But it faces many challenges, too; “it will only grow as its economy develops….It needs food security and to be able to protect its environment from the ravages of climate change.”
Economic diversification, better infrastructure and higher quality training and education can help achieve this by raising living standards, developing political and societal engagement, and cooperating more closely across borders, according to her, making the topics all the more timely and relevant.