(5 minutes read)
· The sad commentary is that Nigeria, along with other oil rich countries have not learnt from the past mistakes
· They still are not making any serious bid to change the situation they are into
· On an average, the continent’s focus on education,
healthcare, gender equality, creating avenues for employment and instilling in the minds of the people the supremacy of the rule of law etc are far below that is expected looking at its challenges ahead
While the African Continental Free Trade Area (AfCFTA) has been launched with fanfare and a lot of objectives set, it is necessary to introspect whether the 54- countries in the region are presently in a position to reap the benefits from the grouping. The doubt is cast primarily because of the structural inadequacies in the region. Those can be categorized as slow pick up of the manufacturing sector, lack of inclusivity and gender inequality. In other words, though the world’s largest trade bloc claims that it would put a stop, albeit, in a gradual manner, the tendency of the countries in general to export primary goods, mostly in the form of raw materials from mining and agricultural sector, it is a pipe dream, as of now, to achieve that goal in a conceivably shorter time frame.
Case studies are there to prove that hypothesis. For instance, Nigeria, the most industrialized country in the region, still imports
more than 56% of the manufactured goods for its private consumption. Amongst include refined oil and large quantities of food stuff. In the case of former (oil), the country has been one of the largest producers of oil in the continent and yet sends most of the oil as crude to other destinations for refining and re-imports the refined oil at a higher price, necessitating a huge outflow of foreign exchange. Not only that, the cumulative impact of a higher import bill is pushing the resource rich country into a debt trap. In the case of food stuff, the country was earlier known as the granary of Africa. Yet, now it imports most of the food stuff since oil, so to say, the easy money had lured the villagers to give up their cultivation to move into the urban centers in search of better livelihood.
The sad commentary is that Nigeria, along with other oil rich countries have not learnt from the past mistakes. They still are not making any serious bid to change the situation they are into. In Nigeria, there are some private initiatives to up the oil refining
capacities, uptick the manufacturing sector, promote the agribusiness, focus on the technology to leverage growth etc. Still the efforts have to match up with the challenges ahead. The gap between what is absolutely needed and what is achieved on the ground are widening.
That is only an archetypal example, which can be extrapolated to other major economies such as Zambia, which recently has defaulted on the sovereign debt repayment, Mozambique, Zimbabwe and South Africa, which has been consistently been downgraded by the rating agencies.
The common diagnosis is the it was more due to lack of planning, absence of a roadmap for development, undue dependence on foreign aid and assistance, political instability and of course wide spread corruption. These are valid pointers that suggest the reasons for backwardness. But many feel that Africa is still missing the basic reason for the backwardness. It is the inadequate investments in the social sector. On an average, the continent’s focus on education, healthcare, gender equality, creating avenues for employment and instilling in the minds of the people the supremacy of the rule of law etc are far below that is expected looking at its challenges ahead. That could be one of the reasons for sporadic violence, arson, loot, political corruption and what have you.
What is the way out? Admittedly, the launch of the AfCFTA is a desirable achievement and the goals set are equally significant.
However, the realization should go into every country in the region that investment in trade and industry without matching focus on the social sector can be a zero sum game. For that, a more poignant initiative should emerge. The sooner that gets underway; the better for the continent.
