Robert Watkinson spoke to K.Y. Amoako, President of the African Center for Economic Transformation (ACET). He is the former Executive Secretary of the United Nations Economic Commission for Africa.
Africa currently has some of the world’s fastest growing economies. Will that be the case 20 years from now?
I hope so. The future projections do look quite positive. I think it all depends on whether the reforms of recent years can be sustained and if governance continues to improve. Over the last 10-15 years there have been some very important macroeconomic reforms. We’ve also seen significant progress on governance issues, with more accountable governments and the rise of civil society.
How can African nations seize this opportunity to develop?
The key issue, I think, is how to make this growth sustainable and to deal with the vulnerabilities that have traditionally plagued African economies. African nations need strong transformation agendas. This means moving away from low-productivity agriculture to higher-productivity manufacturing and services. They need to develop competitive exports, make better use of technology, and secure greater regional and economic integration. If you look at the Asian economies that have done so well – such as South Korea, Thailand, Malaysia – you see that they all had a strong vision of where they wanted to get to. And then they worked towards those visions.
What are the key challenges ahead?
There are several. Inequality is potentially a major threat. In most cases, growth has not been inclusive enough. Rapidly growing populations, and the related issue of youth unemployment, present a huge challenge for African governments. 10-12 million people are being added to the labour force in Africa every year, but already people can’t find jobs. Tying growth to job creation is critical. African policymakers needs to ensure that education and training match up with the needs of the economy, so that students coming out of college have the skills that will allow them to find jobs.
How is governance on the continent changing?
Governance on the continent is undoubtedly improving, as measures like the World Bank’s Country Policy and Institutional Assessments (CPIA) show. At the same time many African nations now face the challenge of dealing with what I would describe as ‘second generation’ governance issues, which could be more complicated to tackle. Take, for example, the question of how you sustain a long-term growth agenda across electoral cycles in a multi-party democracy characterised by entrenched corruption and an increasingly expensive electoral process. This sort of challenge is relatively new for African nations.
Do you think the current ‘Africa Rising’ narrative could be over-stated?
There is always a danger of over-talking something, but Africa is definitely no longer the ‘hopeless continent’. Africa is at a crucial juncture and, while it’s important to celebrate the progress we have made, we need to stay focused. Crucially, we need to look beyond the headline stories and figures. Growth that relies too heavily on natural resources and agriculture, without increasing competitiveness or harnessing technology, that isn’t inclusive and doesn’t lead to job creation – that cannot be sustainable. But if we get these other factors right, then the real ‘Africa Rising’ can begin.
Who will be the next economic powerhouses on the continent?
If you look at growth on the continent, it’s actually quite widespread and not confined to just a few countries. And it’s not just natural resource rich countries. But if you think about powerhouses, well, yes, just a couple of countries stand out. If current trends continue, and the political and security issues that could impede its growth are successfully managed, Nigeria will surpass South Africa as the continent’s largest economy. But there are examples of success all around the continent. Ghana, Tanzania and Rwanda are all doing very well at the moment and their success shows the way for other nations.
Is Africa becoming more integrated?
Intra-African trade is inching up, but the growth is not fast enough and there are still too many obstacles. African nations cannot be competitive unless the critical issue of integration is addressed. Uniting the continent will require both political and economic will. The good news is that the African Union is now striving to boost the integration process. We now need to move from rhetoric to clear action. Africa has all these institutions for integration but there has been too much fragmentation and the capacity of these institutions has been weak.
How will Africa’s relationship with the rest of the world develop?
Africa’s relationship with the rest of the world is changing significantly. FDI is increasing and it’s coming from new places. China’s engagement with Africa has made the news but you see major changes in African nations’ relationships with all of the BRIC economies. The growth of the BRICs and the changing nature of South-South trade create lots of opportunities. African economies must take advantage of the changing international environment in terms of both economic advantages and the changing aid landscape.
Will development aid still be necessary?
I hope the role of aid will decline but it will still be important. It needs to become more targeted and to focus on specific interventions that, for example, boost technology transfer and address the particularly vulnerable in society. In the agricultural sector, for example, technology can transform the crop yields and incomes of smallholder farmers.
What advice would you give to the next generation of African leaders?
First, I would tell them to look to the future and to develop game-plans that address the particular challenges facing their countries. Second, I would tell them to put the needs of their people at the heart of policymaking – this is critical. Third, I would remind them that it takes courage and commitment to lead.
Are you optimistic about Africa’s future?
Yes, I am a realistic optimist!