Kigali forum urges African economies to develop own models

By Chris Matthews

Government ministers, economic experts, UN and World Bank officials have met to stress the need for greater African-led economic growth on the continent at a forum in Rwanda last week.

Speaking at the African Transformation Forum (ATF) in Rwanda (March 14 – 15), Carlos Lopes, secretary at the United Nations Economic Commission for Africa, said development models adopted by the likes of Brazil and China should not be replicated across the continent.

“Africa needs structural transformation; which is changing the compositions of the economic structure. And the best way to do it is through industrialisation,” he said.

“If you look at those experiments in other parts of the world, they do not adjust to our needs right now, because they were implemented under the world economic conditions that are no longer available to Africa.”

While countries like Ghana, Nigeria and Kenya have seen strong economic growth in recent years, Lopes said such growth is often not inclusive enough across societies.

Headline grabbing GDP figures are often cited as concrete evidence for growth but such percentages often mask deeper societal problems.

Ghana for example is regularly held up as a symbol of democratic and economic success across the continent, and while there were many achievements over the past decade, such growth belies its rising unemployment and widening corruption.

“African current growth has not generated sufficient jobs and has not been inclusive enough to significantly curb poverty,” Lopes added.

African-led growth

The end of the Millennium Development Goals in 2015, which saw the number of people living on less than $1.25 a day drop from 1.9bn to 836m, was viewed positively by those involved – but others criticised its top-down donor-driven vision.

The inaugural ATF event, organised by the Accra-based think-tank African Center For Economic Transformation (ACET), is hoping to change such an approach and aims to foster more ‘African-led’ growth.

K.Y Amoako, executive director of ACET, said the forum represents a “new beginning for economic transformation”.

“The sharp fall in commodity prices, or the slowing of the Chinese economy has once again shown how vulnerable most African economies remain to external factors… transformation can help change that,” Amoako said.

“How can we mobilise our collective forces to drive the agenda? Every country can move at its own speed,, but we must move together.”

Declining commodity prices have left many nations reeling. Angola, where oil accounts for 90% of foreign-exchange revenues, saw inflation top 16% in January; oil-rich Nigeria’s currency continues to plummet; South Africa, Ghana and Botswana are all enduring economic instability.

Talks focused on the need for countries to diversify productivity and the reliance on commodities to promoting local manufacturing, technology, growth in agri-business and enhancing financial management.

Ghana’s Deputy Finance Minister, Mona Quartey, reflected on the need for strong, coherent governance as critical for economic transformation and the need to “show people you are doing the right thing”.

Britain’s Department for International Development (DFID) committed $2.6bn to economic development in Africa in 2014. Its director general for economic development, David Kennedy, said it is vital to “improve governance, transparency and accountability to enhance the enabling environment and the investment climate” on the continent

He said manufacturing and agriculture are key areas. “We should have a focus on commercialising agriculture. There are opportunities to increase that and link small-holder farmers to markets and really impact poverty in that way,” he said.

“It is a big opportunity across the range of our countries… getting investment and developing agriculture supply chains will be a major area of focus for us.”

The current poster-boy for African economic growth was host country Rwanda. Paul Kagame’s 16-year reign as has seen the country transform economically.

Moving away from a reliance on agriculture, its services sector now accounts for almost 50% of its economy, while moves to promote ‘Made in Rwanda’ products and numerous foreign investments are helping advance manufacturing in the commodity-scarce, landlocked nation.

GDP growth has averaged 7.5% for more than a decade and that has transpired into employment levels reported to stand at 98%, a wave of infrastructure developments and even the promotion of a ‘smart technology’ city among other notable successes.

“Twenty Two years ago Rwanda’s very survivals was at stake… we figured out what to do by doing it – because we had no choice,” Kagame said in an address to attendees in Kigali.

“Help took years to arrive and was not appropriate to our circumstances. We had to start with our own resources and ideas – and in fact the desire to get out of the mess our country was in.”

Amid the current commodities slump which again revealed the porous nature of many African economies, achieving tangible growth alongside democratic governance is paramount and the two are not always in sync. Whether this can be achieved remains to be seen.

This is a slightly modified version of an article which first appeared in the New Internationalist magazine.

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