To transform Africa’s economies, African companies matter too

I recently wrote this piece for The Conversation.

A consistent feature of global analyses of Africa’s economic prospects is their fickleness. In the years since the global financial crisis in 2008, forecasts about Africa have swerved from deep pessimism to heady optimism, and back to a bearish outlook of slow growth and fragility.

The vacillation in perceptions of African economies closely mirrors both the boom and bust cycle of global commodity prices, and the sentiments of Western and Chinese investors. But as global attention shifts yet again to the urgency of diversifying Africa’s economies from unprocessed commodities, the role of the domestic African private sector remains poorly understood by outsiders, especially academics.

The media has fared slightly better in spotlighting the exploits of tycoons such as Sudanese telecoms giant Mo Ibrahim, Nigerian cement magnate Aliko Dangote, Zimbabwean telecoms entrepreneur Strive Masiyiwa and others. But although African business owners have been powerful forces in African economies since the colonial period, they are often ignored in research and analysis….Read More »

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The Under-Belly of Africa’s Booming Business Environment

Africa’s mobile phone revolution is one of the main drivers of the bullish ‘Africa Rising’ narrative. Underpinning this optimism in Nigeria, is the liberalisation of the country’s telecommunications sector, regarded as one of the success stories of economic reform. With over 148 million connected mobile lines, and 92 million internet subscribers, it is not hard to see why.

Amidst the praises for this emergent sector, precious little is known about the actual (and messy) back story behind the telecoms liberalisation in the early 2000s.

For that reason, British-Zimbabwean telecoms tycoon, Strive Masiyiwa’s recent account of his experience during these early days of reform provides a rare glimpse into the challenges and opportunities of operating in a place like Nigeria. The narrative posted on his blog and Facebook page, went viral several weeks ago.Read More »

Dr. Moghalu Unveils New Book, Says “Africa Hasn’t Risen Yet”

Dr. Kingsely C. Moghalu, deputy governor of the Nigerian Central Bank recently unveiled his latest book, Emerging Africa: How the Global Economy’s ‘Last Frontier’ Can Prosper and Matter at the Woodrow Wilson Center in the United States (the book was officially launched in Nigeria a few months ago). The book offers a realistic assessment of Africa’s economic development trajectory within the context of contemporary threats and opportunities in the global economy. In other words, he goes beyond the “Africa Rising” mantra to provide a realistic assessment, in his words. Here is a video of his presentation.

Here are some excerpts from his opening line:

“…Africa has caught the imagination of the world, not as a basket case not with kids with flies on their mouths and protruded bellies, but as part of the world where people can legitimately aspire to opportunities… as part of the world where business can be made…where money can be made… in short, a normal part of the world, and that’s good…about time too…

…but as those who love Africa, we have a responsibility to interrogate a number of conventional wisdom(s) that have come out of the new “brand Africa” that has emerged in the last 10 years, but most recently, in the last 5 years…

…So we’ve seen a lot of books about “Africa Rising” “Africa’s Time”, about “Africa’s Turn” and there’s a lot of good feeling going round, and that’s fine. But it’s important to interrogate these conventional wisdom(s)… Africa is at an important inflection point, Africa is at a… fork in the road, it can go this way or that way, it’s at a point of promise, at a point of opportunity, but Africa hasn’t risen yet! Let’s be clear!

I am not here to give you some feel good message like some insurance salesman about how wonderful things have become, or will soon become about Africa. I am here to give you some hard headed, realistic and I believe, informed insight into Africa’s economic prospects in the context of the world economy and in the context of globalisation…”

He also argues for a paradigm shift and the need to develop an “African world view” in the minds of Africans:

“There’s a tendency to discuss Africa not by Africans but by non-Africans, and that’s fine, that’s a legitimate discourse. But Africans also should be part of that discussion, interpreting their continent, interpreting their prospects… their societies, their politics to themselves from their standpoint. There’s too little of this happening.

…Virtually all the books that have defined “Africa’s rise”, the construction of the myth of “Africa Rising” have been engineered, designed, constructed almost completely by non-Africans… When you read these books, there are certain things they tend to focus.”

He talks about a whole lot of things: economic and structural transformation, the imperative of taking the industrialisation- and manufacturing-route to economic development, rather than simply focusing only on services-led development, economic diversification from resource-based economies and so on.

The one thing I can say for now is that based on Moghalu’s track record as a respected academic, an influential policy maker within Nigeria and a development expert at the global level — a person in-the-know — he ought to be taken seriously by Africans and friends of Africa.

I am yet to lay my hands on the book, but if I were to infer on its content from Moghalu’s lecture, then this blog shares his cautious sentiment to “Africa Rising” mantra. Indeed several articles posted here have reflected on some of these ideas. Its not time to celebrate Africa’s “prosperity” just yet, but if we take the right steps at this momentous period, we will celebrate and make merry soon.

“The Need for Ownership of African Problems and Solutions” for (Y! Policy Hub)

The WEF Panel on Derisking Africa. Photo credit: www.weforum.org
The WEF Panel on Derisking Africa featuring Nigerian President Goodluck Jonathan, South African President Jacob Zuma and President and CEO of International Crisis Group Louise Arbour among others. Photo credit: http://www.weforum.org

 “Africa’s story has been written by others; we need to own our problems and solutions and write our story.”  Paul Kagame, President of Rwanda

With these words, Paul Kagame did two things simultaneously: he earned a spot in the top-10 memorable quotes from the recently concluded World Economic Forum (WEF) Summit 2013 at Davos-Klosters, Switzerland. More importantly, his remark implied that Sub-Saharan Africa today is underscored by a profound failure of African ownership of lingering problems and potential solutions – a failure of an African conceptualisation of these problems and their solutions and consequently a failure of taking responsibility for successes and failures.

Recently, Africa has come under the spotlight as the rising continent of “opportunity” far from its hey days of being the melting pot of “darkness” and “hopelessness”, in the paraphrased words of Joseph Conrad and The Economist. The pockets of high economic growth fuelled by a boom in global commodity prices of which many African countries are merely exporters, and the purchasing power of an elitist “middle class” and of diaspora Africans going-back-home has led to a wave of justified Afro-optimism. More recently, this bubble of optimism has been punctured by those toeing the line of caution, myself inclusive, on the need for more sustainable economic growth, equitable distribution of resources, and institutionalisation of effective governance. The evident polarisation in the discourse on Africa’s fortunes between the optimists and the skeptics is arguably due to the lack of ownership of the African situation today and of the discourse as well.

This variation in this discourse on 21st century Africa was discernible at the WEF where the movers and shakers in global politics, global economy, the academia, entertainment and the International NGO circuit exchanged ideas, visions… and contact details. On the one hand were African leaders such as Nigeria’s President Goodluck Jonathan marketing Nigeria’s Agricultural Transformation program to investors; South Africa’s Jacob Zuma with a presently expanding leadership role on the continent speaking about ambitious infrastructural projects and efforts towards greater regional integration to boost intra-continental trade and several CEOs of global firms like Renault and Coca-Cola stressing the vast opportunities for profit-making in Africa.

A more cautious position was adopted by Louise Arbour, President of International Crisis Group while highlighting significant challenges of governance, weak institutions and political and economic exclusion which foster inequitable distribution of resources, create grievances and eventually culminate in conflict, a serious threat to economic prosperity. While Nigeria’s Central Bank Governor Sanusi Lamido Sanusi adopted a middle ground tone in emphasising that despite significant successes in governance, infrastructure and resource-based industrialisation is needed for Africa to move up the value-chain.

Where does ownership come in within the discourse on Africa’s fortunes? It is precisely due to the lack ofownership that Africa’s story today is varied and that a divergence is apparent between the optimists and the cautious skeptics. This (lack of) ownership means that economic successes across much of the continent are driven by external factors: the boom in global commodity prices on which the economies of many African countries – Nigeria, Botswana and Zambia among others – depend on and the global financial crisis prompting many diaspora Africans to make the strategic move back home and global firms to look for new frontiers of massive profits in modernising African cities and of course, the role of foreign development aid. Africa’s current economic successes can hardly be credited to conscious and deliberate policy by African policy makers, thereby questioning the sustainability of this “success”.

The concept of ownership as identified in this context by President Kagame means African policy makers should take responsibility for problems: poverty, unemployment, inequality, infrastructural deficits, weak institutions and corruption. It means African leaders should take the lead in formulating transformational policies to address these problems: inclusive policies which will close the poverty and inequality gap and address hard infrastructure (such as roads, electricity and security) and soft infrastructure (such as governance, rule of law and regulatory environment) deficits to enable local businesses thrive whilst encouraging foreign investments.

Overall, ownership of problems and solutions should mean that there is a strong link between the actions taken by African governments and resultant successes in addressing these problems, and that such successes are not merely the coincidence of external factors – the boom in oil prices, aid donors or the pinch of the global financial crisis. Effective ownership of problems and solutions means that in a few years, we should be able to quantify the jobs and agri-businesses that sprout from Jonathan’s Agricultural Transformation program or a significant bridging of the yawning gap between the haves and the have-nots in South Africa. This will be the real test of African success in owning the problems and solutions, and for more sustainable prosperity across the continent.

This piece was originally written for Y!Naija Y!Policy Hub, the Internet newspaper for young Nigerians.