Kathy Gibson reports from the World Economic Forum on Africa in Cape Town – Economic growth is important, but filling the skills gap and ensuring the people have a good quality of life will be key to Africa’s future success.
Claver Gatete, Rwanda’s minister of planning and economic planning, points out that inclusive growth is important for all Africans.
Just 10 years ago, any discussion on Africa would have centred around AIDS and lack of growth on the continent, says Donald Kaberuka, president of the African Development Bank.
“Today we are discussing another Africa,” he says. “We have come a long way.”
Economic growth on its own is not enough, Kaberuka adds. “We have had strong economic growth: now we must complete the transformation.
“I see the beginning of this in some countries.”
Nhlanhla Nene, minister of finance in South Africa, says Africa’s youthful population needs to be factored into growth plans. “We have to put in enormous amounts of investment to cater for them.
“Africa’s resources need to be used efficiently and deployed in a manner that lays the foundation for future generations – we have that responsibility.”
The investment community is optimistic about opportunities in Africa, says Anthony Jenkins, group CEO of Barclays.
“But Africa is going to have to seize this growth opportunity in a world that is achieving structural growth and in a world that is more interconnected and more competitive than ever.
“I think there are the right raw ingredients, and some of the policies being made now to transform economies are very powerful.”
Financial organisation have a vital role to play in transforming business, Jenkins says. “A lot of our big customers are either doing business or want to do business in Africa.
“But SMEs are also growing rapidly. We can help them do business in their own countries but also regionally. There is an important role for banks both locally and globally.”
Jenkins warns that Africa should not rely too heavily on analogies with other parts of the world. “That’s looking in the rear-view mirror. I think we should look forward, look at the assets that Africa has and the opportunities there.”
He believes the rapid deployment of technology and skills can help to close the gap.
“The notion that we can digitally enable the continent is powerful. And, while I don’t think we must just look at analogies from the rest of world, there are things working in other countries that could work here.”
He points to a project in India that will bring universal access to every person in the country.
Kaberuka argues that telecommunications is one area that has been a great success in Africa. With deregulation, the private sector has brought submarine cables and fibre optic networks to much of the continent. “But now we need to take the next step.”
With an 80% mobile phone penetration in Africa, he believes the continent has largely been brought into the mainstream. “The mobile phone has made a big difference,” says Kaberuka.
However, Jenkins points out that many of those mobile phones are not uplifting people in terms of economic inclusion, education or healthcare. “Those phones are not doing much from an economic point of new. But we know that it is possible to do those things, because there are tiny projects doing them.”
The potential is huge, though, Jenkins says.
“If there is one point of leverage, we need to get this moving faster. Then we can look at developing content and that can have wonderful knock-on effects.”
Perhaps the biggest threat to African development is the issue of corruption. Shocking figures from Transparency International indicate that five of the 10 most corrupt countries in the world are African – and the money lost is equal to 50% of tax revenue and 25% of GDP.
Nene believes that policies around fraud and corruption need to remain firm.
Regarding the breaking FIFA corruption scandal, he says that if it becomes apparent that there was corruption, action would need to be taken.
“As soon as we have information, the law enforcement agencies will have to do what is needed.
“However, I am confident that things were done properly and we were rigorous on this.”
Nene points out that corruption tends to be well organised, with the participants drawn together by “common greed and eagerness to loot”, but that when it begins to unravel law enforcement can deal with it.
“If we don’t deal with corruption all our noble ideas will not succeed,” Nene declares.