Opinion article by Carlos Lopes and Tony Elumelu
Carlos Lopes is Executive Secretary of United Nations
Economic Commission for Africa. Tony O. Elumelu is an entrepreneur, a
philanthropist, and the chairman of Heirs Holdings Limited, a pan-African
investment company committed to driving economic prosperity and social wealth
in Africa.
The economic performance of Africa in the last few years has
been remarkable. The continent has consistently defied the global trend.
Five years after the global financial system came perilously
close to collapse, the global economic outlook is still uncertain. In Europe,
GDP is still below pre-crisis levels and unemployment is at a record high.
Recovery in the United States, although stronger, remains weak by historic
standards, and even China, which has done so much to drive global growth, is
slowing down.
Yet, in what some might call an unexpected twist, average
growth in Africa over the last decade has been more than 5%. Of the 10
fastest-growing global economies, seven are in sub-Saharan Africa. But how will
this economic spike be sustained? How do we ensure we continue along this
trajectory?
It is the world's appetite for Africa's rich natural
resources which, up to now, has been the major driver of this stellar record.
And it is this same appetite that will provide both the opportunity and the
solution for Africa to sustain these economic achievements.
While not all African countries are commodity rich, the
continent has 12% of the world's oil reserves, 40% of its gold, and 80% to 90%
of its chromium and platinum. Africa is also home to 60% of the world's
underutilized arable land and has vast timber resources.
The idea that these abundant natural resources can be the
driver for an industrial revolution across the continent is growing. The latest
edition of the Economic Report on Africa (ERA 2013) sets out how the
continent's future will be determined by how policies that promote
commodity-based industrialization are designed and implemented.
We believe that such a transformation is both imperative and
possible. But it requires courage, vision and a new mindset from the
continent's business and political leaders to overcome the challenges which
continue to hold back the building of a successful and dynamic industrial base
in Africa.
There is no one-size-fits-all solution to accelerating
resource-based industrialization. But important lessons can be learnt from the
success of countries such as Malaysia, Indonesia, Thailand and Venezuela in
promoting value addition, new services, and technological capabilities.
Malaysia, in particular, is a perfect example of how a
commodity-based economy was transformed, through focused state interventions
and an allocation of resources towards the industrial sector, to a high-income
and diverse manufacturer in only a few decades. Through a series of five-year
development plans, centered on a vision to transform the structure of the
economy and raise incomes in the medium- and long-term, investment was oriented
towards industry. Today, Malaysia is a key manufacturer and exporter of a wide
range of goods and services.
It is clear that governments, both individually and
collectively, have an important role. A supportive policy and investment
framework is essential to attract long-term investors. Policies to build local
capacity and address inequality are essential. Moreover, developing skills
through training and incentives will ensure that local economies are able to
grow and diversify.
However, a barrier to Africa's industrialization that is not
often talked about is the mindset of private sector leaders -- both in and
outside Africa. Many are still indulging in the same historical rent-seeking
attitudes that have resulted in the short-terms gains of crude, cocoa and gold
sales.
More business leaders need to change their thinking and
understand that short-term revenue gains -- as opposed to long-term value addition
-- offer little or no contribution to sustainable economic growth.
We are now seeing a new style of African business leader
emerging -- leaders who are building, investing, growing for Africa's future.
It is their efforts which will provide the jobs and income which will have the
biggest impact on tackling poverty and driving wider social progress.
Africa's private sector must take the lead in improving
coordination between farmers, growers, processors, and exporters; in increasing
competitiveness in the value chain, and ensuring the price, quality, and
standards that market demands are met.
We need to see national and regional champions created and
supported, and help foster effective collaboration between public and private
sector and the development world. This is the essence of the emerging economic
philosophy called Africapitalism, a private sector led partnership mode focused
on Africa's development.
We have already seen real progress on the continent.
Ethiopia's leather industry is not only developing fast but is also increasing
high-value-added activities. South Africa and Egypt are making similar strides.
In Ghana and Zambia, the cocoa and mining sectors have long contributed to
wider socioeconomic growth. In East Africa, the success of Kenya's fresh
vegetable producers in adding value to their exports has been remarkable.
But when Africa only sees some 10% of the income from its
own coffee crop, we can see that much work still needs to be done.
Africa now has the chance, as never before, to shape its own
economic future through industrialization. This will help to spread prosperity
throughout the continent. An industrialized Africa will also provide a
much-needed new driver of global growth. It is in everyone's interest that
Africa succeeds.
The opinions expressed in this commentary are solely those
of Carlos Lopes and Tony Elumelu.
For more information visit, -
http://edition.cnn.com/2013/11/20/opinion/africas-natural-resources-industrial-revolution/?sr=fbmainintl
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