GDP grew at 6.6 percent in 2012 from 3.5 percent according to the African Economic Outlook. This growth has been commodity led, coupled with the emergence of consumption economies in Africa. Many countries and global players have been courting Africa, with Japan recently setting the mood for a more intimate relationship with Africa in June when it organised the TICAD event alongside the Africa Union. The event hosted United Nations secretary general; Ban Ki Moon. and the AU chairperson, Dr Nkosazana Dlamini-Zuma. Japan promised Africa $32 billion, cultural exchange, scholarship endowment for over 1,000 African students with opportunities to intern and transfer of technical knowledge. This is indeed a mouth watering offer, another one from an Asian economic power other than China.
This text aims to lead the consideration for the most ideal economic arrangement and strategy for sustainable growth in Africa. The choices before us are as follows, Sino-Capitalism (Chinese Capitalism), Japo-Capitalism (Japanese Capitalism), Euro-Capitalism or Africapitalism as developed and evangelized by Tony Elumelu.
These seem to be the best of times between Africa and Asia. Many juicy partnerships and investment offers have been made by the Chinese and Japanese. They seem to be the fresh economic elements on the African block that don’t threaten African leaders. They just give money, make investments and shift African resource commodities for production in their industries. One needs to ask, beyond growth, what should Africa worry about. I think its sustainability. The current Asian-Africa business relationship like the European one is not sustainable. We still feel the downsides of the European recession today.
CNN host, Fareed Zakaria notes that the population of Africa is young and would increase to 5 billion by 2050. He also identifies that a 1 percent drop in the GDP of Africa’s trading partners may lead to a 10 percent decline in the growth of Africa. Europe of Asia, America or Australasia can’t guarantee us sustainable growth in the light of this. What then should Africa do? Africapitalism may just be the answer. Africapitalism in my words simply is a phenomenon that espouses sustainable African growth, driven by the private sector, working with NGO’s and other bodies to fund enterprise and government providing the visible and non-visible infrastructure to support wealth creation. This sort of wealth would be genuinely created by Africa.
This would require also a well defined means of economic engagement and intra-regional trade between African countries. Currently, over half of world trade takes place between members of regional trade agreements. Africa cannot be an exception to this rule. We need to create industries in manufacturing and agriculture especially. There should also be a harmony regional agreements and deliberate policy making to ensure intra-regional growth in Africa. This are means of guaranteeing employment and infrastructural projects which in turn ensures consumption and economic growth. Relying on foreign investors is key, but that cannot be our sole strategy. Economic shocks overseas, leads to reaction in African countries. Creation of wealth calls for investigation whether such creation engenders even distribution. A system where growth is based on commodities and where only four men are enterprise bastions in Africa can’t guarantee the welfare that is needed. It can’t guarantee economic independence as much as a system where many entrepreneurs are operating , where the private sector includes a large number of Africans with their business tentacles spread over Africa.
There are a few African entrepreneurs doing a good job of building businesses and reconciling previous ill thoughts on the nature and perception on Africa. Aliko Dangote has built a conglomerate with focus on cement, food and oil and gas. He is 25th richest man in the world and the richest in Africa. We have Mike Adenuga, Strive Masiyiwa, Patrice Motshepe and we have Tony Elumelu doing an African business statesman job of reinforcing the need to create an army of entrepreneurs and battalion of African businesses.
If the argument of Africapitalism is anything to go by, African governments need to start work on providing an enabling environment. The NGO’s need to advocate for education in vocational skills, information technology and other things ancillary to economic growth. Then the private sector needs to be more creative and daring. America’s maintenance as the headquarters of international relations was enabled by her great entrepreneurs who created wealth, empowered innovation and engendered tremendous growth such that someone like J.P Morgan lent the country money at a time. He funded the first major canal project to facilitate connectivity with other trading partners.
The romance with China is not a bad one. We need foreign partners in an increasingly globalized and knowledge based economy. What we need in addition are shock absorbers and new means on wealth creation to augment what we have. The most sustainable of every form of geographical led capitalism, in philosophy that we practise is neither Sino African, Japo-African or Euro-African. Africapitalism is a business philosophy that seems to be the best thing to practise at this point in African business history. Many years ago, the cover of The Economist magazine was titled: Africa- The Hopeless Continent. Recently, it was “Africa Rising”. If we want Africa to keep rising, we need sustainability and Tony Elumelu has provided the answer – Africapitalism.
By Babatope Falade, a Research Associate with the Knowledge Economy Group, Pan Atlantic University, Lagos.
