When heresy becomes fashionable.
Most of the time, it seemed we were whistling in the wind. Our theory was considered 'heretical'. The prevailing wisdom was that Africa's future lay in increasing the volume of its raw commodity exports.
We argued that bigger volumes of raw commodities meant lower global prices. Worse, exports of raw commodities do not create wealth or spread it around in terms of good jobs and incomes. There is no technology transfer, no innovation, no incentive for entrepreneurship.
But that went against prevailing wisdom which came from the developed world. It came packaged with loans, aid and grants. If you wanted loans, you had to buy the economic theory. The theory was excellent for the interests of the developed world; it was catastrophic for Africa.
Nevertheless. for decades we bought the theory, even though it made no economic sense. Africa has been exporting raw commodities since it was first 'discovered' by Portuguese sailors. It continued to export raw commodities during the colonial era and even today, it persists in exporting raw commodities.
The outcome: wealth for those who import the commodities and add value to them; poverty for us. Independence changed nothing as far as the unequal economic relations were concerned.
But the gods of economics, sitting in London, Washington and Paris had spoken and our leaders meekly followed their prescriptions.
We argued that economic emancipation is not possible without economic control. We said that the size of the economic pie in Africa was outside our control. When the pie shrank, as a result of lower global prices, there was less to go around. Inevitably, those most able to control the distribution of the pie, i.e. government and monopolistic businesses took the biggest slices and everybody else had to scramble around for what was left.
Governance had little to do with political battles--the poor fight for their stomachs.
But now, fortunately, this magazine's 'heretical' ideas have become fashionable. Now we hear leaders talking about developing markets, expanding markets, adding value to our resources, mobilising capital. We are no longer looking outside for our economic salvation but to our own capacities and capabilities.
This movement, sad to admit, is not yet continent-wide. Many countries are still content to remain 'rent economies'--exporting commodities and importing everything else. They still shun intra-African trade. Nevertheless, the movement has started and is gaining momentum--I refer you to our interview this month with Tanzania's President Benjamin Mkapa (page 14).
While African Business, together with a number of African economists and thinkers, have provided the intellectual lead in this direction, the impetus has come from South Africa.
Let South Africa lead the economic fight
South Africa, almost alone in the continent, developed its economy on the back of a commodity fuelled industry. Its value-adding mechanism is superb--on a par with the best in the world. South Africa has not asked for nor needed loans or aid. Its domestic market is vast and its African market is growing. But for the blight of Apartheid, it would have been one of the strongest economies in the world.
Therefore, when South Africa speaks, the rest of Africa and for that matter, the world has to listen. South Africa's message is: develop your home markets first and other good things will be added unto you.
South Africa has the capital, the know-how and the will-ingness to develop the domestic markets of other African countries. It will not do so out of charity but because of good commercial sense. This is as it should be: business that cannot sustain itself is not business--it is pouring water into a sieve.
Unfortunately there seems to be a tendency of hostility to South African investments in the rest of Africa. Some countries seem to prefer investments from outside the continent, even if these are of dubious or no value to the country. This self-defeating attitude is born out of an unreasonable, churlish envy for South Africa.
African Business will now make another 'heretical' prophesy: Africa can leap-frog the technological gap and arrive into the 21st century without having to undergo all the stages that the developed world has had to. India has done so, China is doing so, Taiwan and Japan are past masters at it.
We too can utilise the new technology no matter what the current state of development may be.
But most African countries will need a nursemaid during the transition stage. The old nursemaids--the former colonial powers and other northern countries--brought us up to be only hewers of wood and diggers of the soil. We cannot trust them because their interests and ours are not the same.
South Africa has all the qualifications to be this new economic nursemaid--if only we will let it. We have nothing to lose but our poverty.
Hang on to this 'heretical' theory. It might become fashionable sooner than we think.
|Printer friendly Cite/link Email Feedback|
|Title Annotation:||Editorial; African economy|
|Date:||Apr 1, 2004|
|Previous Article:||AB guide to African currencies.|
|Next Article:||Ben Mkapa: Africa's fight for economic independence.|