World Economic Forum on Africa

  • Mapping the African Growth Landscape

    By Mwangi S. Kimenyi

    Thursday 9th May 2013 - 1:15pm - 3:15pm

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  • Mwangi S. Kimenyi, Senior Fellow and Director, Africa Growth Initiative, Brookings Institution, USA discusses the session Mapping the African Growth Landscape

  • These insights were written by Mwangi S. Kimenyi.

    Mapping linkages between infrastructure, growth and jobs in Africa

    Integration was a major theme in the three mapping sessions. Leadership was highlighted as a key to ensure that incentives are aligned among stakeholders. Learning and sharing best practices across borders was repeatedly suggested as a way to accelerate integration, especially focusing on areas where Africa is already strong, like agriculture, minerals and mining, but at the high end of the supply chain, not the low-end. This shift will require creative ways to educate youth and spur entrepreneurship to provide the talent, energy, and ICT to drive change. From ‘aid to trade’ was a rallying call, as was ‘made in Africa, sold in Africa.’ 

    Synopsis

    The session on Mapping the African Growth Landscape focused on the sectors that hold the greatest potential for economic growth in Africa. The session started with each of the participants voting for three sectors that they considered as having highest potential for growth. The sectors selected by most of the participants were: information communication technology and telecommunications; energy and engineering; entrepreneurship; education; manufacturing; and agriculture. The selection of these sectors was influenced not only by their potential to contribute to the growth of the economies, but also to creating jobs, especially for the youth. 

    Working in groups, participants identified opportunities and strategies for exploiting the economic growth potentials that the various sectors offer. Although many of the opportunities and strategies identified were specific to particular sectors, there were also some common themes. For example, innovation was identified as a source of potential growth in all sectors. This includes advances in the ICT sector, innovations in the delivery of education to ensure quality instruction or innovative approaches, developing entrepreneurship through entrepreneurship hubs and incubators or even innovations to improve governance using ICT. Innovation was also considered key to expanding the manufacturing sector and in agriculture, such as the introduction of genetically modified seeds. Participants were of the opinion that Africans must embrace innovations to fully exploit the growth opportunities of various sectors. 

    Participants focused on actions to exploit the growth potential afforded by the various sectors. The ICT sector was identified as having great potential for growth through expansion of mobile penetration with applications in health and industry. The sector was identified as presenting immense opportunity through the compilation of information on the population, which would assist in policies for the delivery of health services and in tax collection. Participants observed that the energy sector presents many opportunities for growth, but there is need to develop a forward-looking energy master plan for Africa, not just for individual countries. Many opportunities also exist for a diverse mix of energy sources including solar, hydro and thermal. 

    Enhancing entrepreneurship was highlighted as key to growth and thus the need for strategic approaches to promote entrepreneurs. There was a realization that for Africans to exploit the growth opportunities, productivity of the labour force needs to improve. This requires a focus on broadening access to education, especially primary and secondary levels, and on the quality of education along with strategies to build appropriate skills, such as by reorienting the curriculum to emphasize math, science and technology.

    Agriculture was identified as critically important in terms of growth and employment. For agriculture’s potential growth to be realized, it was observed that there is need to view agriculture as a profitable business. This implies moving the production stage to value addition in the form of processing. However, to realize the sector’s full potential, there are issues that must be a policy priority, such as addressing long-term financing of agriculture and clarity of land ownership in many countries. 

    Participants expressed the view that manufacturing is central to Africa’s transformation agenda and holds the key to job creation. For manufacturing to deliver on its potential, governments need to create the necessary enabling environment accompanied with incentives for investments in the sector. A particular issue of concern in relation to manufacturing is dealing with the high costs of energy and poor infrastructure generally. It is necessary to closely link agricultural and manufacturing policies in a value-chain framework.

    Although the group discussions focused on each of the selected sectors, it was apparent that sustaining quality growth involves crucial linkages across the sectors. For example, although ICT/telecoms and education are sectors with high growth potential, they are also seen as key to facilitating the performance of the other sectors. For example, quality education is central to the development of skills that are required for competitive manufacturing. Likewise, while the growth potential for the ICT/telecoms sector is high, this sector is also seen as critical to the growth of other sectors. This suggests that policies to fully exploit Africa’s growth potential should take cognizance of the various complementary linkages within the economy.

    Another common thread emerging from the discussions is that fully exploiting the growth potentials identified requires strong partnerships, especially between governments and private sector. Governments must play their roles in providing a conducive business climate, reduce risks and especially improve on the quality of governance. Governments must make necessary investments to lower the costs of doing business such as improvements in infrastructure and regulatory burden. Likewise there is need to invest in education and skills. But governments will not be able to do it all and partnership with private sector and financiers will be crucial to overcome some of the obstacles. There is need to infuse capital from local and external sources to fully tap the potentials that are presented by the sectors.

    Finally, participants identified regional integration as key to enhancing growth in all sectors. African economies are too small, and therefore regional integration is crucial to expanding the size of markets, which should make investments more attractive. Africa governments should therefore accelerate the regional integration agenda, which should support growth for all sectors.

    Disclosures

    The views expressed are those of certain participants in the discussion and do not necessarily reflect the views of all participants or of the World Economic Forum.

Session objectives

What sectors and industries hold the most promise for growth and diversification in the next decade?

Session objectives:

  • Examine project sector potential
  • Explore models of diversification
  • Leverage regional comparative advantages

Rapporteur

  • Mwangi S. Kimenyi Mwangi S. Kimenyi
    Senior Fellow and Director, Africa Growth Initiative, Brookings Institution, USA

Speakers

  • Seth E. Terkper Seth E. Terkper
    Minister of Finance and Economic Planning of Ghana

  • Jaidev R. Shroff Jaidev R. Shroff
    Chief Executive Officer, United Phosphorus (UPL), India

    Graduate in Chemistry. Named 38th out of 40 most influential figures in the chemicals industry world...

  • Rob Davies Rob Davies
    Minister of Trade and Industry of South Africa

    Degree in Economics, Rhodes University; Master's in International Relations, University of Southampt...

  • Benjamin Mophatlane Benjamin Mophatlane
    Chief Executive Officer, Business Connexion, South Africa

    BCom in Accounting, University of Pretoria. Formerly: with KPMG; 1996, Co-Founder, Business Connexio...

  • Jendayi E. Frazer Jendayi E. Frazer
    Distinguished Service Professor, Carnegie Mellon University, USA

    BA, MA and PhD, Stanford University. Formerly: US Assistant Secretary of State for African Affairs, ...

  • John G. Coumantaros John G. Coumantaros
    Vice-Chairman Flour Mills of Nigeria, USA

    1980, BA in History, Yale University. With Flour Mills of Nigeria: 1987, Director; 2012, Vice-Chairm...

  • Oscar Maina Oscar Maina
    Chief Executive Officer, Business Mind Africa, Kenya

    Studies in Accounting, Strathmore University, Nairobi. Founding President, Students in Free Enterpri...

  • Mwangi S. Kimenyi Mwangi S. Kimenyi
    Senior Fellow and Director, Africa Growth Initiative, Brookings Institution, USA

Facilitated by

  • Euvin Naidoo Euvin Naidoo
    Co-President, South African Chamber of Commerce in America (SACCA), South Africa

    MBA, Harvard Business School. 1990s, four years at McKinsey & Company, with a focus on growth strate...

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