Why Africa needs to start making things for itself

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Investment in Africa is big business and the list of major corporations funding projects across the continent is rapidly growing. From the Chinese construction and engineering firms pushing infrastructural development to the biggest names in technology driving innovation, there’s serious money to be made for everyone involved.

Aside from the African partners getting their cut from these lucrative deals, this investment boom is powering rapid development across Africa. the continent is rising fast and the short-term gains can be seen on a daily basis. As the World Economic Forum puts it: “2018 is going to be a good year for sub Saharan Africa’s economies” with a growth forecast of 3.2%, up from 2.4% in 2017.

However, rapid development comes with compromises – ones that many are too busy counting the quick cash to see, or perhaps care about. At the 2018 World Economic Forum Annual Meeting, Chief Executive Officer for Brand South Africa, Kingsley Makhubela, highlighted the long-term issue of Africa becoming overreliant on external trade, rather than focusing on developing intra-African trade:

“This is especially dangerous for Africa given its growing integration with the global economy in recent years. In order to mitigate this, Africa must take steps to secure its own share of global economic growth.”

The threat is very real, too. Developed nations are enjoying the African boom, making the most of the continent’s investment opportunities, trade dependencies, innovations and loan interest payments – not to mention the natural resources and professional talent that escapes along the way.

The problem is there are gaping holes in this development model. African nations aren’t trading enough amongst themselves and they’re not manufacturing products for themselves – something that needs to change sooner rather than later.

The need for internal trade

According to the World Bank, intra-African trade accounted for just 11% of all trade between the period of 2007 and 2011. In 2015, this amounted to $170 million when the World Bank forecast a potential value of trillions of dollars. Clearly, Africa is drastically falling short of maximising trade deals that boost local economies and keep money within the continent, rather than sending it overseas.

Brand South Africa Chief Executive Officer, Kingsley Makhubela, says African government must work harder to reinforce trade deals between neighbouring countries.

“To collectively succeed, individual governments must work towards a regional imperative if Africa’s economies are to be changed in a way that drives sustainable and inclusive growth for the continent as a whole,” he says. “These regional trading corridors cannot work in isolation but must be scalable to improve connectivity across the African continent.”

He says Africa’s greatest economic opportunity lies in learning how to trade with itself more effectively – and the stats from the World Bank support his argument.

What happened to “Made in Africa”?

According to the Rising Africa mantra, we should have seen a manufacturing boom across the continent by now. Africa was meant to be the world’s next cheap production hub, replacing China as the place everyone wanted their products to be built.

Instead, Africa is more reliant on products made overseas than ever. Consumers are buying technology made in China, innovations like Rwanda’s aerial blood deliveries rely on drones built by a firm in California and the rise of solar energy is a foreign import, too.

Where Africa was supposed to be making money from manufacturing for the world, it’s spending money on imports and feeding the pockets of international brands.

There are more subtle side-effects as well. Rwanda needs drones to deliver blood because its road networks are poor and solar panels are spreading across Africa due to a lack of electricity grids more than any environmental concerns. These technologies that provide short-term solutions for Africa’s problems reduce the incentive to address long-term issues like improving the road networks in Rwanda.

Of course, this doesn’t matter to the Californian firm making money drone sales.

Remember the end goal here

There are a lot of positives to Africa’s rapid development but it breeds an environment that encourages shortsightedness. Quick profit is a tempting proposition but it’s one that easily puts the bigger picture at risk. African nations need to remember the end goal: an Africa that can stand on its own two feet and become a valuable member of the international community – not a dependent of it.

Forecasts paint a positive picture for African economies in 2018 but government’s need to look far beyond short-term results.

Featured image: By Abdirisak at en.wikipedia, CC BY-SA 3.0, https://commons.wikimedia.org/w/index.php?curid=7280983

About Aaron Brooks

Aaron Brooks is a UK journalist who wants to cut out the international agendas in news. Spending his early years in both England and Northern Ireland he saw the difference between reality and media coverage at an early age. After graduating from the University of Chester with a BA in journalism, his travels revealed just how large the gap between news and the real world can be. As Editor-in-Chief at East Africa Monitor, it’s his job to provide a balanced view of what’s going on in the region for English-speaking audiences.