Desirable growth strategy for Africa

May we wish our esteemed readers a Happy New Year!!!

Delightfully, our two digital platforms-  www.trendsnafrica.com and Africa4U have completed three years of service to the continent. As we look back, we are imbued by the recognition and respect we  have been getting from different quarters including business houses, multilateral organizations, the governments and more importantly our expanding number of  readers. We take that kudos with humility realizing that we have to traverse a long distance to make these platforms the powerful voice of African businesses and a single point reference for enterprises and governments in the rest of the world. That challenge only motivates us to work harder for fulfillment of our objective.

The year just got over was cataclysmic to say the least. Even before the Covid-19 pandemic shook Africa and the rest of the world, many countries in the continent were in the grip of a slow growth trajectory mainly because of the sharp fall in the commodity prices, heavy debt burden –both domestic and external and structural inadequacies to ensure inclusive growth with the result that poverty and destitution in some least developed countries continued unabated. This was further compounded by law and order problems marred by violence and subversive activities in certain isolated pockets.

To expect 2021 will be a harbinger of hope and development is a wishful thinking since the growth pangs cannot be cast away since some of them are endemic to the extent that it requires meticulous planning and timely implementation.  That also calls for benchmarking growth targets based on timeframes and development priorities, such as short , medium and long terms with the achievables clearly defined.

There are some brownie points which the continent can bank on for planning in the short term. Among them included the pick -up of the commodity prices, particularly oil and metals, a near consensus among multilateral organizations to address the heavy debt burden of the African countries in general and importantly the launch of African Continental Free trade Area  (AfCFTA). But these are only pointers that can help catalyze the growth process in the short run.

Yet, there are countervailing trends that can stymie this advantage. Foremost is the continuation of the pandemic without any respite though so far the impact of the Pandemic in Africa was less severe. In countries like South Africa, the curfews that are imposed for addressing the second wave of the Covid-19 pandemic may have adverse impact on economic recovery. Secondly, the rising trend of external debts and the least efforts by the member countries to rein in their fiscal profligacy can lead to debt traps for most of the economies even if the multilateral organizations can take a call on
addressing the rollover or even writing off  the loans. It is instructive for all countries to exercise fiscal discipline to ward off the impending crisis.

Equally significant is bringing down the tariff walls as a sequel to the launch of the AfCFTA. For this, the matured economies in the region should take a lead, such as Nigeria, South Africa, Kenya, Tanzania, Egypt etc. With the growth burden writ large on them, will they take a lead in the immediate future is something that has to be seen.

Medium-term challenges are more intense. Foremost is the role of reducing the role of the government in a continent, where there is the overwhelming presence of government both in the industry and social sectors like education and health with some isolated exceptions like Nigeria, where the presence of the private sector is predominant. Can that be replicated elsewhere in the continent is a moot point. Also, historical evidence indicates that the over-dependence on  oil resources has affected the oil-rich countries severely when the prices fluctuate.  It is high time for the largest continent in the world to give focused attention to agriculture and allied industries not only to beef up the availability of foodstuff but also to earn precious foreign exchange. Higher up in the agenda should be the focus on manufacturing. The trigger could be adding value to the mined goods to begin with by striking backward and forward linkages to move in the value chain and to increase employment.

The long term growth strategy should focus on unbundling the productive faculties using technology and skills. In a time frame of seven to ten years, the continent should look at unwinding that phase to keep its growth goals intact and importantly for obviating the need for changing the goal post every time. The good news is that it is not an insurmountable task since the report card of the continent for 2010 -2020 has been remarkably better than 2000 -2010. That is at a good pace.