According to United Nations Industrial Development Organization Goodwill Ambassador and CEO Made in Africa Initiative, Helen Hai African countries could undergo a fruitful economic transformation within the next 30 years, if they are able to follow in the same footsteps as Asia. “Africa should follow China’s development model and aim to become a light-manufacturing hub,” said Hai.
Hai argued during a China-Africa panel at the Africa 2017 Summit in Sharm El Sheikh, Egypt that China’s success was premised on its ability to have a clear strategy and to execute it regardless of obstacles in the way. “African countries must be clear about what they want from China,” she said. Local conditions may also present significant opportunities for Africa in the next few years, she added, as rising labour costs are likely to see 85 million jobs exported from China. “If Africa can capture those jobs it can enjoy the same economic transformation that China had.”
The idea behind the Made in Africa initiative is to advise African governments on industrialisation and investment promotion. The initiative is also geared towards supporting African countries through the process of implementing the right strategies to attain set goals.
Considering sustainable development can never be achieved if Africa’s population of 1.3 billion is left behind, there is a pressing need for its leaders to look into ways of uplifting people out of poverty through job creation.
Africa has a lot more jobs for economic transformation because of its natural resources while Asia doesn’t necessarily have the same powers. However the results have been different in the two continents. What went wrong?
In Hai’s opinion, the first thing is identifying these development powers earlier. “In 1978, my generation witnessed 680 million people lifted out of the international poverty line and according to world bank, the number of people living at the international poverty line in the world since 1960 didn’t decline.” This simply means that China made one of the most significant contributions in history over the past 70 years in terms of poverty reduction. “If you ask me, as a beneficial of that, it had nothing to do with aid in China. The key success of China was 2 things- job creation and industrialization”
“China was able to capture the golden opportunity during industrialization relocation in the 80’s. That’s exactly what happened in Japan, Asia and the four tigers in the 60s. That’s how we actually moved ourselves to jumpstart our economic transformation from a low income economy,” she added.
According to Hai, there were about 200 developing economies globally between 1950 and 2008, but only two economies moved from lower income status to higher income status. Out of those 200 economies only 13 of them moved from middle-income status to high-income status. “Out of those 13, 8 of them are in Europe the other four and the Asian plus tigers including Japan. It was a common consensus in the 50s and 60s,” she said.
Although Africa was left behind in the 60s and 80s because they didn’t understand this module, after 30 years, this reshaping of the global value chain is happening again and Africa will do well to get it better this time.
Can Africa really make this work?
“Yes, Africa can make it happen, you know as a private entrepreneur, I came to Ethiopia back in 2011, being the general manager of a Chinese shoe factory to set up the first of its kind on Ethiopia. Which I immediately doubled the export revenue in Ethiopia’s shoe sector after 6 months. By the end of year one I recruited 2000 local workers, by year two I recruited 4000 local workers, in 2011 Ethiopia ranked 125 according to World Bank Doing Business Report,” said Hai.
“I’m working with AID Africa on more industrialization strategies considering a movement has already started in Africa. I have also been working closely with the Ethiopian government. According to a recent report, Ethiopia is poised to generate 60000 local jobs and $1billion in export revenue.”
“Africa has a population of 1.2 billion, most of them are young people, we can talk about a lot of fancy things, but the first thing in my opinion is how to create jobs, how to create million of jobs, significant jobs. In seizing this opportunity there is a potential of 85 million jobs. And as we all know, according to statistics manufacturing jobs has a strong multiplying effect, and a manufacturing job can impact a whole economy.”
“The GDP per Capita in China in 1978 was $154 which is less than 1/3 of the south sahara African countries. China was poorer that a lot of African countries at the time. But in 2015 the GDP per capita in China is 7500 and according to a forecast, by 2025, China could become a high-income country. This means by 2025, considering the reshaping, all the labour intensive jobs will have to relocate out of China. But where will those jobs go? (all 85 million of them)”
“If African countries can first understand this opportunity and be able to capture a significant portion of these jobs, in my opinion they can have the same opportunity for economic transformation in the next 30 years, following the exact same footsteps of what Asia did.”
“Ethiopia has made it already, soon one by one; the 54 African countries will be able to attain this kind of economic transformation. In Asia It started with Japan and then China followed, “she added.
A lot of China-Africa discussions featured throughout the Africa 2017 summit. One of the key takeaways is the fact that African leaders and other stakeholders are now posed with the responsibility of outlining ways to get the most out of Chinese investment and the One Belt One Road initiative.