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Development

 

Ten Self Medication Tablets for Africa

Africa’s profile has never been higher. Economic trends appear to be moving in the right direction. Continental growth was 5.1 percent in 2004, and is estimated at 5 percent in 2005 and 4.7 percent in 2006, the most favorable performance for many years. Today, 40 percent of African states now have elected democracies, regional co-operation is being enhanced, and governance is part of the agenda. How should Africa respond, and what is the best way for the continent to promote its own development?

 

A Ten-Point Strategy for Development

 

Growth Begins at Home. The determinants of economic growth are primarily domestic. It is a paradox that contemporary analysis recognizes the limits of external action; yet external assistance is promoted as critical to development. While many proponents of aid would recognize the importance of “hard” infrastructure (roads, railways, ports, airports) to African development, “soft” infrastructure (policies and people) is at least as important, if not more. Every efficient economy requires the institutions of a free society, including property rights, the rule of law, and democracy. Fundamentally, this means putting in place at home the global “rules of the road” that make for such competitiveness and investor attractiveness, which make economies more competitive, including: the removal of government protection of workers and industries (i.e., deregulation and de-subsidization); and higher productivity (i.e., less burdensome bureaucracy, improved skills, more flexible workforce, and dealing with vested interests). Competition and competitiveness matter to long-term economic health, not state benevolence.

 

Ensure Differentiation. In addition to the usual wisdom of promoting sound policies and better institutional governance, part of the solution thus rests in developing a nuanced, case-sensitive approach to economic reform. Such a focus on heterogeneity will also assist in improving Africa’s brand—not dragging the continent’s overall image down to those states associated with economic decline, collapse, and disease. This is both an African and donor responsibility. In this regard, Professor Jeffrey Herbst of Miami University (of Ohio) has categorized six such groups which it may be helpful to reiterate:

  • The high performers set to globalize (Botswana, Mauritius, South Africa, Ghana, Uganda, and Seychelles);
  • Countries on an upward trajectory (Mozambique, Benin, Madagascar, Senegal, and Tanzania);
  • Large, poorly performing countries (Democratic Republic of Congo, Ethiopia, Nigeria, and Sudan);
  • Poorly performing countries where growth rates are near to zero which “face a slow grinding down of their economy” (Burkina Faso, Cameroon, Kenya, Malawi, Republic of Congo, Rwanda, and Zambia) or where they face severe ecological problems (such as Chad, Mali, Mauritania, and Niger);
  • Countries that are in the midst of or have suffered institutional collapse (Central African Republic, Ivory Coast, Guinea, Liberia, Sierra Leone, Somalia, and Zimbabwe); and,
  • Those oil-producing countries (Angola, Cape Verde, Equatorial Guinea, and Gabon) where natural resources offer a “distinct set of developmental prospects.”

 

This raises, in turn, another issue: There is a presumption that improvements in governance in and of themselves will be sufficient in uplifting Africa. To parody Lord Denis Healey, former Chancellor of the Exchequer: “Governance comes and goes, but the rules of arithmetic and geography remain the same.”

 

Accept Failure. Can thus governance remedy geography and climatic constraints, or should we accept that there are countries that will not make progress—or at least sufficient progress—in meeting civil needs? Should we consider new remedies; or should these states be allowed to mutate, borders to change, or even states to fail?

 

Promote Aid Quality, Not Only Quantity. More aid does not have to mean worse, but there has to be a focus on ending leakages, making more predictable internal funding flows to ministries and agencies, improving public management practices and scrutiny, defeat of vested interests, and the placing of all of this in a political project of state-building within a long-term vision of national development. While much focus is currently on keeping donors to their promises, there have to be systems of mutual accountability.

 

Celebrate Globalization. Africa’s recovery demands that African elites engage unambiguously with globalization. Instead of recognizing and finding the means to tap globalization’s advantages— flows of skills, capital, trade, and technology— Africa’s leaders are at best ambivalent about globalization. At worst, it is cited as a problem to be avoided and a reason for marginalization.

 

Africa’s rhetorical default stop should be amended to celebrate globalization at every opportunity. This includes: Endorsing trade liberalization that would remove subsidies to French and American farmers that are hindering African market access, promoting initiatives that reduce the cost of capital for African entrepreneurs, promoting the spread of technology that will more rapidly upgrade degraded African infrastructure and insert it into global supply chains, and advocating the freer movement of skills necessary for economic relevance and revitalization. Globalization, after all, offers Africa an opportunity to catch up.

 

But celebrating globalization is more than just becoming a proponent of it. It demands a change in mindset. Instead of criticizing the impact of cheap, often Chinese imports on previously protected domestic industry, it means finding the means to make these sectors more competitive. Rather than berating external constraints, it requires stating ambitious development visions and putting in place strategies to achieve them. Instead of scarcely veiled criticism of the role of multinational compa¬nies as the unacceptable face of capitalism, it requires finding out exactly in what they want to make investments. Instead of dwelling on the downsides, it demands celebrating the success of Africa’s own globalizers. When last did you hear an African leader celebrating a business success story? They need to do it vocally and regularly.

 

Strengthen Parliaments and NGOs. This means finding means to empowering parliamentarians and encouraging the development of a concept of a loyal opposition—not least because they might find themselves in opposition at some point! The history of Africa on encouraging political pluralism is, however, weak. Nongovernmental organizations, opposition parties, and the media are seldom seen as an asset; more often an affront. As a result, civil society, including business, often pulls punches in its relationship with government. Government has to see civil society not as a threat to be controlled, but rather a long-term developmental asset.

 

Create Points of Entry. It is necessary for African governments to target businesses, by country, by sector, and by business. This does not demand commissions, roundtables, councils, or presiden¬tial advisory bodies, but rather old-fashioned foot¬slogging, and new-fashioned use of basic database technology and careful management. This way it will be possible for those NEPAD peer review grad¬uates to benefit from their elevated status.

 

Change the Debate. It would be more encouraging to hear a new debate towards what an Africa beyond aid might look like and how to get there. An Africa beyond aid is, after all, a much more positive rhetorical device and analytical template to aim at than one suggesting a doubling of external largesse.

 

Do Not Confuse Growth with Development. For example, Africa’s current growth rate is on the back of a cyclical commodity upswing driven especially by Chinese demands. Over history, whether in boom or bust, few African countries have managed to invest commodity and particularly oil revenue in a way that is socially productive. Instead, the money has been wasted. When prices have been high, a higher percentage has been wasted because the country does not feel under any pressure from donors. Moreover, increased Chinese interaction with the continent is not necessarily an altogether positive development. While it has led to increased commodity demand, it has also flooded Africa with cheap Chinese consumer goods, good for consumers but problematic for governments seeking to develop domestic manufacturing industries and diversify their economies. Long-term development is dependent on economic growth and governance.

 

Set Priorities. It is important for African states to set priorities and for the international community to assist them in doing so through: Better information flows, Assisting leadership, Greater transparency in extractive industries, Strengthening local capacity by competitive systems of recruitment and retention, Identification of low-hanging development fruit, getting to make the policy changes first that will bring reward and assist a positive dynamic, Building a tax base, Prosecuting corruption. Arrests are not enough, Finding means to link with diaspora groups. Improving the skills base and promote excellence in the civil service and Linking with global success stories: Ireland for diaspora groups, Dubai for infrastructure leverage, Singapore for public service excellence, Malaysia for poverty-alleviation, and Costa Rica for diversification.

 

Conclusion

 

It is crucial that African states focus on the “how to do it” rather than the “what to do.” In this regard, it is incumbent on their leadership to prioritize and build both indigenous structures and constituencies for changing the conditions in which business can operate.

 

 

Excerpted from Greg Mill's Ten Things that Africa Can Do for Itself' in the Heritage Foundation Lectures (No. 923) published by the Heritage Foundation.



By Greg Mills Ph.D
Head of Brenthurst Foundation, based in South Africa, which is dedicated to strengthening African economic performance.


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