There is no quick fix to facilitating industrialisation in Africa. But what is evident from the experience of the newly industrialising countries is that economic orthodoxy will not leapfrog the continent. General Park Chung Hee who laid the foundation for South Korea’s rise to stardom, broke all the rules of liberal economics, writes Prof. Said Adejumobi*.
Michael Bloomberg, the former mayor of New York, and philanthropist billionaire, launched a new initiative on 3 January 2014 in Johannesburg, South Africa, on supporting media development in Africa. At that ceremony, Bloomberg made a very important observation worth sharing.
He noted that many people have been asking him why he chose Africa as his new investment frontier, giving a helping hand in philanthropy. Bloomberg, a perceptive businessman, gave a poignant response. He remarked that Africa was a continent of the immediate future. In the next 50 years, Africa would likely be the continent to beat in terms of its economic growth and strength. It would be one of the largest economies in the world.
To start the inroad into Africa then may be a little too late as the economic space might have been parcelled out already. Charity now was possibly good business and would create profit in the future!
Bloomberg is a smart businessman and shrewd politician. He is not thinking of today but tomorrow, and lending a helping hand to a continent positioned to claim the future. When tomorrow comes, Africa will certainly remember those who walked with it on its path to glory. Bloomberg may be one of them. But for tomorrow to be a new dawn, Africa will need to leapfrog. Its current average 5% growth rate will not do the magic; its abundant young people are necessary, but will certainly not be enough; its natural resources are good, but will constitute only a foundation.
Wanted: a game changer
What will prove decisive is Africa’s capacity to have a game changer that will radically transform the structure of its economies and jumpstart it towards industrialisation. No nation will have space in the 21st century without an industrial base.
Although Africa began the race on the same line as other developing regions in the 1960s, its pace and strategy were deficient, leaving it behind in a disappointing last place. While others were running and jumping, using even banned substances like steroids, Africa was crawling and musing, allowing others to leave it behind.
Africa performed exceptionally poorly on average for about 50 years, with a per capita income increase of only about $200, while eight Asian countries – South Korea, Hong Kong, Singapore, China, Malaysia, Thailand, Taiwan and Indonesia – grew phenomenally at an average of 5% per year between 1965 and 1990. Their per capita income multiplied tenfold, leaving Africa lagging behind.
The optimism that greeted post-independent Africa suddenly turned into pessimism. A continent with many adopted “mothers” and “friends” suddenly became an orphan, groping in the wilderness, paying a heavy price for its failure.
With failure, Africa became a laboratory of economic experiments. Others started designing its life pattern. Structural adjustments, poverty reduction programmes, a medium-term expenditure framework, economic liberalisation, etc, were some of the elixirs administered to Africa, apparently for life support. Economic space and policy ownership were lost, so were the dignity and integrity of the African personality and communities. It has taken three decades for Africa to begin to reclaim its lost fortunes.
Industrial progress that will trigger better living standards for the people is the key for Africa to unlock the future and claim global respectability. The industrial share of GDP in Africa is low and so is the level of employment in the sector.
Industrial products are less than 20% of Africa’s exports and some even allege that the 20% is comprised of basically repacked or rebranded items from China with little or no value addition from African countries. The truth is that trade liberalisation worsened Africa’s limited industrial capacity as cheap products from Asia in particular, displaced the manufacturing sector. Africa’s economic growth masks a facade of growing deindustrialisation of the continent.