BY INVITATION
SHAJU MANGALAM,
DIRECTOR, FICCI KARNATAKA STATE COUNCIL, GUEST COLUMNIST
World over the post pandemic recovery measures have started to make positive results in the economic activities and some of the countries have already started to regain its pre covid levels of growth despite the searing prices of oil and the geopolitical tensions emerged from the Russia-Ukraine crisis. The credit and capital flows started again to make the markets work again and this is giving much needed momentum to the global economic outlook. Though there are uncertainties about several stable factors which are key for the sustenance of the recovery phase, world is grappling with the new paradigm; that is uncertainty leads to risk and taking chances!
In Africa too the changes are visible as several countries from the continent started to look the post covid world as an opportunity and renewed efforts to revamp the economic fundamentals would give long term results. African continent occupies around 20 percent of globes surface with 1.5 billion people living in these countries. The African attraction becomes more pronounced as it has 60 percent of the world arable land, innumerable forest resources which no other continents can claim for and almost 30 percent of worlds precious mineral resources lies under the beneath of Africa unexplored! Despite all these robust economic and natural factors, Africa still struggling to gain a better position in the global economic landscape. It produces only around 3.5 percent of the global GDP and less that 4 percent contribution to the global trade (that too only primary commodities and natural products). The pertinent question that has been emerging is how far Africa will remain as an underutilized and unexplored destination and what the world can do to create a win-win situation for the intra continental economic opportunities?
Africa helped the world to fuel growth in the beginning of the industrial revolution as the continent was the largest supplier of raw material and manpower for rest of the world. It’s rare earths and minerals are still untapped and remain underutilized and sooner than later, the world will move towards Africa for its resources. China has already seen this opportunity and did its first mover strategy in several countries from the continent.
One of the factors that has been affecting the revival of African continent in optimizing the manufacturing sector, is the absence of robust science and technological developments. This has affected the innovation and research in the industrial development. Several countries are still lagging far behind to the world average in R&D spending and attaining productivity efficiency. Governments are also yet to pick up this factor and do the necessary handholding to the private enterprises through fiscal support that has been done by several Asian countries in their transition phase. Countries must take effective measures which are pro -innovation, pro- technology and this would address the corruption and doctorial tendencies which are prevalent in many countries in the region.
Another key factor is bridging the skill gap in science and technology and create more robust educational institutions that can take care of Africa’s future needs. It is highly imperative that Africa’s brain drain to be reversed by investing in education and research infrastructure that will help the best minds in the countries to remain in the home countries and work for the development of the region. Its noteworthy to see that South Africa has been taking effective steps and creating an enabling environment for education and research organizations. Rest of the nations from the region need to investigate these facts and replicate effective models that can lead to retain the talents for the future of Africa.
By 2050 Africa must emerge as the robust economic power which can compete with any countries from Asia and middle east. In the emerging global economic order, the key trends that is shaping Africa’s fortune would be continents fast growing population, increasingly young work force who are robust consuming class who are migrating to urban areas. The inter connectivity between countries in the continent are getting stronger with extensive penetration of mobile and internet usage.
The fourth industrial revolution can give Africa enormous opportunities in the coming years. The fourth revolution can help Africa countries to improve its infrastructure sector and leapfrogintonew development stages without creating many inefficiencies.
Nations in Africa has taken several measures to integrate their economies through free trade agreements, particularly the African Continental Free Trade Agreement, which are certain to drive economic diversification and temporary shocks. Eu after the formation has shown a similar path how an integrated system despite diluting the national identities of countries could balance the economic development of weak countries through supplementary support mechanisms. Africa can look this model and work for such a system where one economy of several nations to substitute one’s strength for alleviating other weakness.