AFRICANGLOBE – Business executives from around the world remain bullish about Africa’s economic prospects, and argue that the current headwinds provide an opportunity for countries to diversify and step up investment in critical sectors such as agriculture and infrastructure to make them more resilient to external shocks.
“In fact, investment into Africa is rising despite the downturn,” said Tony O. Elumelu, founder of the Tony Elumelu Foundation and co-chair of the May 11-13 World Economic Forum Africa.
However, he underscored the need to set up investment in infrastructure as well as value addition to ensure that the money goes into the processing of raw materials — as opposed to simply extracting and exporting.
This was echoed by Fredrik Jejdling, president, Africa Region, Ericsson, who pointed that the company has been in Africa for 120 years, which proves its commitment to the future of the continent.
While in April the IMF downgraded its GDP growth forecasts globally, reducing Africa’s by about 0.5 per cent per annum over the next five years, first deputy managing director David A. Lipton, pointed out that the right economic fundamentals are still in place.
However, Africa needs to address perceptions of risk on the continent and highlight the capability of its people and institutions to deliver complex projects, quality, local content and innovation.
South Africa’s Finance Minister Pravin Gordhan (an Indian) said that African countries need to mobilise their own resources and implement projects that will demonstrate Africans’ ability to deliver.
Mr Gordhan also underscored that Africa needs a “youth revolution” to create a different paradigm that will allow Africans to build more inclusive societies and improve the future of Africa.
“We can demonstrate to the world that we can create a more equal society than anywhere else,” he said.
However, Africa still faces huge structural challenges including inequality and high levels of unemployment.
Ms Winnie Byanyima, the executive director of Oxfam International, underscored the need to link economic growth to poverty reduction.
She said that between 2003 and 2009, strong oil-driven growth in Nigeria only benefitted 10 per cent of the population while the number of poor people in the country increased.
Ms Byanyima called for governments to better police multinational companies to curb tax dodging and “tax competition,” where potential investing companies bid down rival governments in terms of tax incentives, thus depriving the country of billions in potential revenue.
At the forum, it was emphasised that the road towards Africa’s digital transformation under the Fourth Industrial Revolution presents unprecedented opportunities to accelerate progress in addressing Africa’s growth and development challenges.
However, there is a need to step up investments in technology and skills development to ensure a new generation of Africans is able to understand and employ emerging digital technologies.
It is also a historic opportunity for African countries to build a future based on knowledge, not natural resources as the current excessive dependence on a limited range of commodities continues to put the brakes on economic growth.
By: Berna Namata