20 May 2013

Africans march upward to economic purgatory

Written by  Adekeye Adebajo

No. 252: Africans march upward to economic purgatory / Adekeye Adebajo / Business Day
20 May 2013

Adekeye Adebajo writes about his experiences at the recent annual three-day World Economic Forum on Africa

The great and the good converged on Cape Town recently for the annual three-day World Economic Forum (WEF), Africa's equivalent of Davos. Security was tight as business and politics courted each other in the ultimate power game. Under the broad theme of "Delivering on Africa's Promise", the forum's three overarching priorities involved accelerating economic diversification; boosting strategic infrastructure; and unlocking Africa's talent.

The first session I attended was "Building the Brics" (Brazil, Russia, India, China and South Africa). President Jacob Zuma kicked off the session by arguing that "Africa had a story to tell", noting that he would like to see an integrated, self-sufficient continent in 50 years that could use its own resources for development, trade with the world on an equal basis, was conflict-free and economically viable and had populations empowered through education. He observed that the Brics could help Africa to be strong and show the world that the continent was organised.

The president of the Tunis-based African Development Bank, Donald Kaberuka, called for greater infrastructure investment from Brics countries into Africa and noted that the $50bn capitalisation of the proposed Brics bank should be at least $250bn, as the African Development Bank had been capitalised at $100bn. The Rwandan technocrat then provided an Afro-optimistic vision, observing that West Africa's economy had quintupled over the past two decades and that Africa's per-capita income had risen to $1,000, creating a larger middle class of consumers. However, he cautioned that poor infrastructure added 40% to the cost of doing business in Africa, advocating greater savings and mobilisation of internal resources and calling for an end to aid dependence.

The chairwoman of the African Union (AU) Commission, Nkosazana Dlamini-Zuma, then set out a vision of a prosperous Africa at peace with itself as part of her organisation's celebration of its golden jubilee this month. She noted that the most important resources in Africa were its people; that transport infrastructure must connect Africa by rail and road — from the Cape to Cairo; and that agriculture was a vital sector in which 70% of Africans find employment, with 60% of the world's arable land on the continent. She also bemoaned the fact that sub-Saharan Africa generated as much energy as Spain, despite the latter having 20 times fewer people.

The "Africa 2063: From Fragility to Stability" session saw a visionary presentation by Kenya's new president, Uhuru Kenyatta, who called for the East African Community (EAC) to work towards creating a common currency to attract greater regional investment, noting that Uganda was now Kenya's largest trading partner. He called for Ethiopia to be brought into the EAC, observing that its population of 70-million would enrich a bloc of 210-million East Africans.

He praised military co-operation between Kenya and Uganda as part of the 17,000-strong AU mission in Somalia.

The "Integrating to Compete" session focused on regional integration. Several participants noted that Africa is the world's least integrated continent, with only 12% of trade conducted among its 55 countries and 800-million people, and discussed ways of removing obstacles to regional integration.

The "Energy in Africa" session argued for private sector investment in this vital sector, while another on "Mapping Growth" called for creating agri-zones for processing primary products; supporting small-and large-scale farmers; developing more affordable technology; improving tax collection; promoting long-term energy planning; and prioritising education.

Some points were repeated throughout the sessions: "Asian Tiger" Singapore was at the same level of socioeconomic development as Ghana in the 1950s; and Africa is the second-largest market for cellphones after Asia. There were also banalities bandied about by the forum's capitalist class, such as "improving the value chain", "capital will follow opportunity", and "the only goal of capital is to maximise profits".

My overall sense of this forum was that many of the Africans were espousing worthy visions that were often not matched by practical mechanisms and were sometimes detached from reality. Some of the foreigners appeared to be naively seeking to "export" ideas to Africa without any proper understanding of local contexts.

This talk shop of the powerful moves to Nigeria next year. Doubtless, many of the same personalities and politicians in this "capitalists' paradise" will again have a chance to rub shoulders and think great thoughts, while the impoverished masses of Africa continue their upward march from socioeconomic hell to Afro-purgatory.

Adebajo is executive director of the Centre for Conflict Resolution and co-editor of The EU and Africa (Wits and Columbia University Press, 2012).

This article is part of a series of fortnightly columns written by Adekeye Adebajo for Business Day every other Monday

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