Why Africa is poised to join global market by 2030

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OPINION

By Dennis Onyango

In the rush to join the global economy, one region has been left behind. While one country to the next in Asia and Latin America shrugs off Third World status and heads for industrialisation, Africa still drifts in the opposite direction.

Entangled in poverty, war, graft and debt, Africa has become even more reliant on the export of raw materials-the traditional badge of Third World membership -and more dependent on rich benefactors for loans and foreign aid.

Africa remains firmly rooted at the bottom of the international economic and social league pyramid, far removed from the huge new trade blocs forming in Europe, Asia and America, and strategically neglected now that the Cold War ended.

But there are finally signs that the long years of “Afro-pessimism” may be ebbing. Many people, today, in the industrial nations are waking up to the continent’s economic potential.

Renown America economic Joseph Stiglitz predicts that Africa will provide the high-growth “tiger” economies of the years to come, given that the West has developed a new Africa policy based on opportunity rather than aid, and financial experts now dub Africa the ultimate emerging market.

Though Africa is facing a momentous test: can it join the global market and follow in the footsteps of the Asians and Latin America to prosperity? Since its failure to follow suit will confirm that Africa is infected by a unique mix of cultural, political and economic shortcomings that doom it to remain the world's most backwards region.

However, optimists point to huge changes sweeping the continent. And they observe that the fresh multiracial South Africa will act as a “development pole” for the whole of Africa, and that democracy is taking wider root as the old generation of post-independence dictators die.

Economic growth is picking up, and governments increasingly recognise that the only way forward is to embrace market economics. Unrealistic exchange rates are being abandoned while privatisation is unfolding.

In an interview recently with the BBC, Edward Jaycox, retired World Bank financial guru, observed that the current African economic transition to market-oriented economies, good governance and improved financial management is revolutionary in nature -powerful compared to that taking place in Russia.

That may prove only too apt for comparison. But for Russia, political and economic change has been slow and flawed, privatisation is riddled with problems, and old static attitudes remain entrenched.

But with aid programs withering rapidly, the pressure on Africa is rising. There is growing acceptance that the only solution to replace the lost aid is to enter the strenuous international competition for private investment.

Until today, multinational organisations, which like to be in or near growing markets, have given Africa their lowest priority. For those who have invested, returns have been relatively high, but so has the risk. Among the problems are modest markets, poor technology, high production costs, inadequate skills and horrifying infrastructure.

Nevertheless, the signs are that Africa is gradually being drawn into the global market integration and network by leveraging its vast resources, growing consumer base, and strategic partnership, particularly through organisations like AfCFTA, and her leaders increasingly appreciate that they must cast off their past dependency syndrome.

And according to the IMF and the World Bank, countries like Egypt, Botswana and South Africa that embarked on major policy reforms have experienced the greatest economic growth, high exports and low inflation.

Since the withdrawal of USAID, the World Banks now allege the traditional “donor-recipient relationship” with Africa is an anachronism, and private enterprise must take over. That may be an easy excuse for freezing crucial international aid for the world’s poorest countries. But it is also the best price for Africa if it wants to catch up with the rest of the world.

The writer is an advocate of the High Courts