Africa’s Next Billion: From Davos to Abuja By Oluwatoba Oguntuase - 3rd May, 2014 ________________________________________ “We need jobs, jobs, jobs,” President John Dramani Mahama of Ghana emphasized during a session on “Africa’s Next Billion” at the 44th edition of the World Economic Forum Annual Meetings last January in Davos, Switzerland. He wasn’t just raising an alarm! Mahama was only proposing one of the well-known ways by which Africa’s impending population explosion could be turned from becoming a social upheaval into demographic dividend. Similar propositions are expected to be made and discussed this week as the 24th edition of the World Economic Forum on Africa gathers from May 7 – 9 with the theme: “Forging Inclusive Growth, Creating Jobs.” African economies, maintaining an impressive 5.4 percent average growth trajectory, have continued on a steady trend of remarkable resilience to contemporary global economic stagnancy and financial shocks to the admiration of international investors and development experts. Today, the roar of the pessimists who once foresaw only doom and despair for the African continent, is fast ebbing into oblivion. But gargantuan challenges still lie ahead of the region’s development. The IMF 2014 World Economic Outlook paints attractive picture of Africa as the next investment bride of the world, replacing emerging markets which growth rates have either plummeted or stagnated in recent times. The massive capital flow reversals experienced by emerging economies, as advanced nations began to pull their funds and investments after attaining a measure of stability out of the global economic recession, have led to reduction in growth rate and extenuating per-capital-income mostly in the “fragile five” – India, Indonesia, Brazil, Turkey, and South Africa – most of who also belong to the BRICS group. There are indications that the millions of people who were lifted out of poverty into the middle – income class in these emerging economies in recent years, now widely classified as the “fragile middle” run the risk of being plunged back into depression. But the Africa’s story is pleasantly different! Africa’s growth trend will continue strongly, the IMF indicated early last month but added, that the continent’s business and economic landscapes will be “more bumpy looking forward”. This bumpy future, aside from the well-documented challenges that face the region may not, in my opinion, be unconnected with the prediction that Africa’s population is expected to hit 2 billion by 2050. So, questions abound as to how Africa’s next billion of restless young people will be catered for in the coming decades! Is Africa’s growth really transforming into development? Is there even distribution of wealth and opportunities in our countries? Is our population- resources ratio sustainable? There is hope in Africa, not only for Africans but also for foreigners, who may be thinking of investing in this last economic frontier. Considered as the next investment destination for major advanced economies, as well as “the emerging markets’ emerging market,” Africa has what the world needs at the moment. With its abundant natural resources which include vast deposit of oil and gas, precious metals, and other minerals, the continent continues to play major roles in the global economy. The highest deposits in the world of Cobalt, Platinum, Gold, Chromium, Tantalite, Manganese, Uranium, Diamond, Bauxite, and Coltan (most mobile phones in the world are made with elements refined from coltan) are found under the African soil. Again, as the second largest continent on earth in landscape and population, Africa offers a huge agricultural opportunity for mechanized farming. There is great prospect of growth for investment in the food processing, retail, beverage and restaurant businesses. Also with about 1.1 billion people, 50 percent of whom are 19 years old or younger, the continent has the youngest population of all the continents in the world, a large and vibrant market for goods and services, and a huge and dynamic labour force. If this army of young people can be gainfully employed in productive activities, the region’s growth and consumption rates stand boosted with the attendant lifting of millions out of poverty. For the first time since inception, the World Economic Forum on Africa is coming to the very heart of the continent. The choice of Abuja for this year’s foremost gathering of global leaders on the continent is most appropriate. Nigeria is the true microcosm of what Africa represents in terms of its strength, culture, nature, people, and opportunities. Reputed as a nation of unusually resilient people, its music, dance, and diverse cultures are extra-ordinarily joyous. These will surely make most attendees at this year’s Forum to consider a tourist visit again to Africa. Nigeria is the biggest economy and the most populous nation in Africa. Over 350 ethnic groups and languages make up the country. And as a fast-rising emerging market, a major oil and gas exporter, a force in global peace and security efforts, and a country in its centennial; Nigeria will undoubtedly showcase Africa’s best of cultural and economic diplomacy to the whole world at the WEF on Africa 2014 in Abuja. There are also some room for improvements. The Africa’s regional average for the “Ease of Doing Business” must be improved upon, to enable businesses flourish and replace aid on the continent. Intra-Africa trade which presently stands at 11 percent must be increased through regional economic integration and removal of trade barriers, even as it partners with other regions of the world. Africa, for example, can feed itself sustainably through its Alliance for a Green Revolution, AGRA. Infrastructure is almost lacking in Africa and this constitutes investment opportunity for emerging-market economies, which are currently being led by China into Africa. Transportation, mining, refining, power and green energy, health and education facilities etc. are all open to foreign direct investors who stand very good chance of reaping high returns as Africa also develops; in a synergetic collaboration. “Imagine if we had sufficient power? Our GDP would be US $29 trillion by 2050. It can happen.” Aliko Dangote, Africa’s richest man declared in January at the Davos Meetings while encouraging investors globally to consider investing in the continent. What African leaders must look out for at this year’s Forum is simple: What development model will best help redistribute wealth from economic growth to include its mostly excluded vast and youthful population? This is the antidote to rising inequality which potentially could fuel uprising. Development policies that will focus on diverse local peculiarities of the various African economies, as opposed to economic abstractions imported from far away Breton Woods Institutions; are what is needed to trigger a bottom-up growth rather than the age-long ineffective top-driven strategies which have, for more than five decades; bred corruption, inequality, poverty, and insurrection on the continent. To do otherwise will further compound Africa’s problems, waste the present opportunity of being the preferred investment destination, and be guilty of what Williams Easterly calls “The Tyranny of Experts ...” Africa may have demonstrated resilience well enough but its sustainability into the future will depend on how well its leaders can develop, adopt, and implement policies; which will focus on social and economic inclusion. Fortunately, the theme of this year’s Forum is based upon this premise.
Posted on: Thu, 08 May 2014 07:47:57 +0000
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