Africa is economically the poorest region in the world, with more than 60 percent of her people grappling with poverty and about 38 per cent extremely poor. Yet the paradox of our time is that it is the richest continent of the world with vast natural resources.
Nations of the region, particularly in sub-Saharan Africa, are not making much headway in poverty reduction, and have continued to experience inefficient growth, high vulnerability to economic and environmental shocks, greater rural poor, and neglect for regional integration, with initiatives as the African Continental Free Trade Area (AfCFTA).
Today’s Africa must rise not by paying lip service to it but by taking pragmatic and selective steps to reducing poverty and attaining inclusive growth and economic development: first by concretely lighting up and powering the continent, by feeding itself through agricultural transformation, by industrialization, and by integrating her economies to promote the free movement of goods, finance and people, to realize trade value, bigger investment and more jobs, and to improve the quality of life of her people.
The fact is that transforming Africa’s economy would remain a dream if African leaders and governments continue to blindly toe the line of neo-liberal economics; that is, high dependence on foreign investment and excessively embracing the principles of sound money or low inflation, free trade and the likes.
Most of the nations that have succeeded in transforming their economies have been those that paid more attention on nurturing certain new industries, selected by the government in consultation with the private sector, through tariff protection, subsidies and other forms of government support until they ‘grew up’ enough to withstand international competition (Chang, 2007). These nations opened up their economies selectively and gradually.
They did not blindly follow the neo-liberal development strategy. Cases in point are the Asian Tigers, Japan and China. Even Western countries like the US and Britain applied unorthodox strategic economic pathway to climb the ladder of economic growth and development.
Renowned Nobel Prize-winning economists have echoed that most of the countries that have climbed the summit of economic growth have not faithfully followed neo-liberal economic policies to transform their economies. One of such economists Ha-Joon Chang (a South Korean), who has written several authoritative books on global economics, as has done Joseph Stiglitz, states in his book Bad Samaritans: The Guilty Secrets of Rich Nations & The Threat to Global Prosperity: “The Korean economic miracle was the result of a clever and pragmatic mixture of market incentives and state direction. The Korean government did not vanquish the market as the communist states did. However, it did not have blind faith in the free market either. While it took markets seriously, the Korean strategy recognised that they often need to be corrected through policy intervention.”
He also states: “…practically all of today’s developed countries including Britain and the US, the supposed homes of the free market and free trade, have become rich on the basis of policy recipes that go against the orthodoxy of neo-liberal economics.”
Chang concludes with the following advice, saying: “Free trade reduces freedom of choice for poor countries. Keeping foreign companies out may be good for them in the long run. Investing in a company that is going to make a loss for 17 years may be an excellent proposition. Some of the world’s best firms are owned and run by the state. ‘Borrowing’ ideas from more productive foreigners is essential for economic development. Low inflation and government prudence may be harmful for economic development. Corruption exists because there is too much, not too little, market. Free market and democracy are not natural partners. Countries are poor not because their people are lazy; their people are ‘lazy’ because they are poor.”
Need I say more about what African governments should do to control and grow their economies in order to escape poverty? May be on a related subject matter in our next edition!
Editor: Ousman Kargbo
