Africa has garnered heightened attention in recent years, framed by impressive economic growth and increasing prosperity. Indeed, the gushing new narrative celebrates an ascendant continent neatly captured by the catchphrase, “Africa Rising”.
Africa’s share of world output, exports and foreign investment is markedly higher than 20 years ago. Critically, also, progress has been extensive, capturing middle- income and low-income nations, mineral-rich and poor economies, as well as coastal and landlocked nations.
However, while emboldened with optimism and expectation, we must readily acknowledge that based on the experiences in Brazil, Argentina, India and other developing and developed economies that Africa’s continued ascent is neither guaranteed nor inevitable. To be sure, reforms that lock-in the essential building blocks and which inspire new growth triggers form the cornerstone of Africa’s economic promise. Thus, while we seek to reimagine Africa’s future, it is instructive to draw on historical lessons. Here, three themes stand pronounced:
First, political stability is a precondition. Encouragingly, across the continent, elections occur more frequently and increasingly reinforced by multi-party contestation. But, progress has been uneven and, in some places, there’s even been a roll-back. The recent uprising in Burundi is a case in point. The appetite of some African leaders for longevity beyond constitutional confines personifies the risk of unravelling past gains. The good socioeconomic progress that has been made in most African countries and the commitment to political systems and processes that fortify citizens’ basic democratic rights and leaders’ accountability must become further entrenched. This may sound simple enough, and universally recognized, yet the incidences of political promiscuity occasionally raise its head.
Second, Africa has flourished on the bed of macroeconomic reforms, symbolized, in part, by greater fiscal sustainability and low inflation. But here too the gains aren’t iron-clad. Too often fiscal overreach, sometimes driven by unforeseen shocks, like plunging oil prices or failed farming crops, have unsettled economies. African governments must aspire towards reducing external and internal economic vulnerabilities, promote central bank independence, increase regional and intra- African trade, significantly invest in infrastructure projects and encourage governance structures that help avert economic derailment.
Connected to macroeconomic dynamism is capital investment, a universally recognized growth tonic. African governments must continue to create an attractive and globally competitive environment for domestic and foreign investment and also introduce appropriate fiscal and regulatory measures which encourages and incentivizes the establishment of public-private partnerships.
Investment in human capital is a critical component of capital promotion. While African literacy rates have improved in recent years, more than half of the world’s out-of school children are in Africa. Initiatives should be undertaken by both the public and private sector to steer towards educational outcomes that produces students and employees with skills and expertise that are globally competitive.
The third component in favour of a robust growth climate is the introduction of microeconomic reform measures that will allow dynamic, innovative and efficient private firms to flourish. Africa’s next billion jobs will be reliant on commercial endeavour in markets with calculable risks.
I am confident that the World Economic Forum on Africa 2015 will deliver compelling insights into further nurturing and stimulating Africa’s resurgence.
I continue to be optimistic and excited about Africa’s economic future; a future which must also be inclusive and benefit all the inhabitants of the continent, particularly the poor, unemployed and marginalized.
The World Economic Forum on Africa 2015 takes place in Cape Town, South Africa from 3-5 June.
Author: Patrice Motsepe, Founder and Executive Chairman, African Rainbow Minerals, South Africa
Image: Sudanese voters look for their names on a list posted outside a polling station in the town of Malakal in Upper Nile state, April 12, 2010. REUTERS/Finbarr O’Reilly