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Development

 

Pragmatism is the Way Out for Africa’s Development Impasse

There is no mystery behind some countries being rich and others poor. Rather, it is a result of the policies they chose and the institutions they put in place. Although this sounds simplistic, it is nonetheless a truism which developing countries ignore at their peril.

Developing countries need to address the domestic and international factors of their underdevelopment. There is a clear need for a continent-wide approach to Africa’s economic, socio-political, technological and intellectual marginalization. This calls for recognizing the importance of human capital, sound institutions, good economic policies, technological advancement, appropriate incentive structures and political stability.

One way to embrace technology and develop human capital is through education. Human capital positively affects long run economic growth.  It is not just a matter of increasing human capital but also ensuring that it is of the “right” type. The new economy makes enormous demands on a country's stock of human capital. Effective participation in this economy requires highly skilled individuals. By developing human capital, the culture of poverty will be done away with. Through education for example, the nomadic communities can engage in other more productive activities rather than keeping of animals hence killing twin problems – the problem of cattle raiding and dying of animals due to drought.

Quality has become a strategic weapon in international competition and trade. Improved quality reduces waste and increases productivity. It enables firms to increase their market share and charge higher prices for their products, in turn resulting in higher profitability. Currently, there is increasing pressure to liberalize trade and open up domestic markets to international competition. Domestic industries in SSA can no longer be effectively shielded from foreign competition. This, added to the creation of free trade zones in different regions, suggests that trade liberalization is likely to continue unabated, with the result that even domestic markets cannot remain safe backyards for inefficient industries.

While most countries in SSA have adopted export promotion as a development strategy, their export performance as a share of world trade still remains very poor. Improving the quality of goods and services by adopting quality improvement methods such as obtaining ISO registration and implementing total quality management (TQM) will help boost the competitiveness of SSA firms and promote the development goals of SSA nations.

Firms in industrialized countries that have adopted a quality-oriented strategy have achieved improved productivity, greater customer satisfaction, increased employee morale, improved management-labor relations, and higher overall performance. TQM implementation can have several benefits to manufacturing and service organizations in SSA: some of these benefits include the following:

 

Acceptance of positive change


SSA societies tend to be less dynamic and more resistant to change compared with industrialized societies. There are several instances in Africa in which many tasks have continued to be performed in exactly the same way for decades. For example, in many African societies, farmers are still using the same types of equipment and methods that their ancestors used centuries ago. TQM requires ongoing examination of the existing products and processes with the intent of improving them. There is a never-ending search for new ideas in order to meet the customers’ needs. Adopting TQM in SSA can foster the culture of accepting positive change, and this can have far-reaching consequences not only for individual firms operating in SSA but also for the region’s development as a whole.

 

Customer-oriented management approach

 

In SSA, customers do not receive the attention they deserve. Some studies conducted among Dutch importers of goods from developing countries reveal that  lack of responsiveness, inconsistent product quality, and unreliable delivery are common problems encountered when dealing with exporters from developing countries The successful introduction of quality improvement systems such as TQM in SSA organizations will help create awareness about the importance of customer orientation and responsiveness to succeed in today’s competitive global environment.

 

Effective management and development of workers

TQM encourages employee participation and mutual trust between management and labor. Improved relations between management and labor coupled with increased employee morale and motivation can help increase firm performance. Considering the shortage of capital investments in SSA countries, utilizing human resource to improve quality, productivity and overall performance holds great promise. To utilize human resources effectively, however, appropriate training of the workforce both in technical and behavioral skills is essential. Studies based on African organizations indicate that decisions based on consensus have greater acceptability in African societies.  Studies by the World Bank have shown that higher degrees of participation resulted in better performance of water supply projects in Africa.

Increased foreign exchange earnings

Most countries in the SSA region keep tight control of their foreign exchange earnings. To stretch the utilization of the available foreign exchange, government regulations often require that companies purchase certain inputs from domestic suppliers. However, local suppliers in many SSA countries have difficulty meeting the quality and delivery requirements specified by their international customers. This tends to compromise quality, resulting in reduced demand for SSA products in international markets. A vicious cycle sets in. There is poor export performance from SSA countries due to lack of high quality products that can be sold at competitive prices in the world market, hence low foreign exchange earnings. To stretch the use of the meager foreign exchange earnings, SSA governments restrict the import of needed capital goods and raw materials by firms operating in SSA. In turn, failure to use appropriate technology and high quality raw materials results in poor quality products, which cannot compete effectively in international markets.

Third world countries face an uneven playing field. Although SSA can and should address the domestic environment which hinders development, there remains the vast international economic system over which it has no control and in which it is being penalized. This is where SSA's fate becomes a dual process and where the rich countries must address their bad practices. Giving aid and then shutting off markets is hypocrisy and if the developed world is serious about underdevelopment, then they need to act decisively. Rich countries must open their markets to exports from developing countries and slash their enormous agricultural subsidies which currently exceed $350 billion. They need to promote fairer patent rules that ensure that poor countries can afford new technologies.

Economic cooperation has a positive impact on national policy credibility, investment and growth. Deeper economic integration in Africa could permit expansion of the regional economy to generate the threshold scales necessary to trigger the much needed strategic complimentarity, attract adequate levels of investment required for the development of modern manufacturing cores and the transfer of technology within the region.

To take advantage of globalization, Africa needs to open investment policies, promote trade and build an indigenous entrepreneurial class. Welfare attitudes must be replaced with the entrepreneurial spirit, reinforced by expanded micro credit mechanisms and technical know-how.  

There is an African attitude toward power that the “winner-takes-all” of society’s wealth and resources. Tribal decisions are made by consensus (which can delay decisions) or by authoritarian regimes (which defeats democracy). Decision making can be improved by developing a strong civil society and NGOs to ensure freedom of the press, accountability, transparency and participatory decision-making practices. Good governance, a necessary condition for economic development includes: checks and balances on government power, freedom of the press, freedom of association and expression, the rule of law, respect of the constitution and access to information.

As a result of the colonial experience, SSA countries were economically fragile and had weak social infrastructure. This was exacerbated by declines in the terms of trade and the debt crisis. Given the unequal capacities of the North and the South, the development of technology (especially information and communication technologies) further widened the gap. In addition, many countries in SSA have been characterized by dictatorships, abuse of power and economic mismanagement which have further entrenched the marginalization.

Africa must be pragmatically proactive and not reactionary. SSA must take cognizance of both internal and external dimensions. Looking within for the source of underdevelopment before considering external factors will be a step in the right direction. There are no magical elixirs in the quest for growth: prosperity occurs when the right incentives are in place. It happens when government incentives induce technological adaptation, high-quality investment in machines, and high-quality schooling. It happens when politics is not polarized between antagonistic interest groups, but there is a common consensus to invest in the future. More importantly, broad and deep development happens when a government is held accountable for its actions.

Management strategies which emphasize quality and excellence would help improve organizational performance and contribute to the development of African countries. Improved quality would increase productivity and reliability, enhance the satisfaction of domestic and international customers, strengthen the competitiveness of SSA firms as well as increase production for domestic consumption. For SSA nations, these would boost employment at home, increase their foreign exchange earnings, improve their balance of trade, and set in motion vibrant economic activities that would stimulate growth and development.

 



By James Kathuri
Kathuri is a Lecturer at Kenyatta University


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