The recent global economic crisis has provided us in Africa with an opportunity to review how we do business and think about the future, a future that needs to be grounded in fairness, integrity and sustainable development as opposed to greed and cronyism that has all too often been the case in the past. I believe that a key factor for the future will be the role played by the private sector on the one hand and how Governments set the playing field for investment on the other. This latter point requires strong political leadership.
As we think about the future and how to drive the growth which is so important on a continent with a burgeoning young population looking for jobs we need to think carefully about the past – what was good and what was bad. If we understand the past then we can build for the future and, hopefully, avoid the mistakes that have held us back in that past.
So in the hope that we can learn from the past... Firstly we need to guard more and more against an insidious line of thinking that has come out of the world economic crisis. There is no doubt that international trade and flows of real investment across borders are drivers of growth and in no way bear any responsibility for the recent crisis. Emerging markets need access to wealthy trading partners. And it is certainly no one way ticket as the developed world also needs the recourses of Africa. Both parties will benefit from openness and accessibility.
I know that calling for open access to the world at large also means that within Africa we need to play our part, as we are not blameless in this process. And for this we need leadership within the African continent from our politicians as they create the environment in which their private sectors can flourish. All too often as the commodity boom continues revenue flows have increased allowing fundamental flaws to be hidden. It would be very dangerous to assume the commodity boom will continue forever and so a proper, secure, foundation for the future is essential. Botswana is a remarkable example of how to invest a commodity windfall wisely.
It is also important for us in Africa that as we take heed of the lessons from the financial crisis and the reforms being proposed that we do nothing to hinder the emergence of effective fiscal institutions within Africa. Without reliable banks and an efficient credit markets Africa, like other developing regions, will remain poverty stricken and heavily dependent on unrefined commodity exports. If we succeed in building a fair banking sector private enterprise will be ready to invest and take business risks which are its task in life. However the private sector also has to look to its method of doing business. Good corporate governance and social investment need to be more than just a slogan. Business must act in synch with the world in which it lives, not in a bubble of careless ambition. Investments must be seen as generational and not driven by their impact on quarterly reports. Ethical capitalism is the right way forward and will allow the countries of Africa to grow and prosper.
The sound economic policies that many African countries have adopted need to be re-enforced and key health, education and infrastructure programmes and expenditures need to be maintained. Doing so will not only assist in creating the conditions for long term and positive economic growth but also allow the large, young unemployed populations of so many African countries to join the formal economy. We must not abandon any of the market related reforms which have acted as key drivers of growth for successful developing nations round the world. Good governance, open markets and strong institutions are vital for development. These factors need the support of domestic populations with Africa where once again the politicians have an important role to play. In other words there is a need to build a ‘Coalition for Growth’. In Africa we talk of how a pride of lions works to live and prosper, all working together for the common good. Quite a different picture from Asian tiger!
African competitiveness has received much too little attention - something my family, through the Brenthurst Foundation and its range of continental and international partners, has sought to address through the creation of the ‘Lake Kivu Consensus on Economic Competitiveness’. Africa needs to find the means within its own development and not be dependent on the vagaries of aid and donor sentiment. If Africa signs up for this growth and competitiveness philosophy then Africa’s lions will roar – and they will provide the interdependent network of jobs, security and free passage of trade, and economic growth which is vital for our future.
As the Spence Commission on Growth and Development points out in its report last lasted year – fast sustainable growth is not a miracle. Rather it is attainable for developing countries with the ‘right mix of ingredients’. The commission found that ‘countries need leaders who are committed to achieving growth and who can take advantage of opportunities from the global economy. They also need to know about the levels of incentives and public investments that are necessary for private investment to take off and ensure the long term diversification of the economy and its integration in the global economy’. Critically, therefore, the long term priorities of African leaders should not change despite the uncertain world in which we live. To the contrary, goals associated with the promotion of competitiveness must be accelerated. This competitiveness requires political and macro-economic stability, as well as social and environmental stability. Ever more important is what countries can do together, including improving trade logistics and deepening integration. With growth as a national and continental priority everything is possible.
Source: http://gazettebw.com
As we think about the future and how to drive the growth which is so important on a continent with a burgeoning young population looking for jobs we need to think carefully about the past – what was good and what was bad. If we understand the past then we can build for the future and, hopefully, avoid the mistakes that have held us back in that past.
So in the hope that we can learn from the past... Firstly we need to guard more and more against an insidious line of thinking that has come out of the world economic crisis. There is no doubt that international trade and flows of real investment across borders are drivers of growth and in no way bear any responsibility for the recent crisis. Emerging markets need access to wealthy trading partners. And it is certainly no one way ticket as the developed world also needs the recourses of Africa. Both parties will benefit from openness and accessibility.
I know that calling for open access to the world at large also means that within Africa we need to play our part, as we are not blameless in this process. And for this we need leadership within the African continent from our politicians as they create the environment in which their private sectors can flourish. All too often as the commodity boom continues revenue flows have increased allowing fundamental flaws to be hidden. It would be very dangerous to assume the commodity boom will continue forever and so a proper, secure, foundation for the future is essential. Botswana is a remarkable example of how to invest a commodity windfall wisely.
It is also important for us in Africa that as we take heed of the lessons from the financial crisis and the reforms being proposed that we do nothing to hinder the emergence of effective fiscal institutions within Africa. Without reliable banks and an efficient credit markets Africa, like other developing regions, will remain poverty stricken and heavily dependent on unrefined commodity exports. If we succeed in building a fair banking sector private enterprise will be ready to invest and take business risks which are its task in life. However the private sector also has to look to its method of doing business. Good corporate governance and social investment need to be more than just a slogan. Business must act in synch with the world in which it lives, not in a bubble of careless ambition. Investments must be seen as generational and not driven by their impact on quarterly reports. Ethical capitalism is the right way forward and will allow the countries of Africa to grow and prosper.
The sound economic policies that many African countries have adopted need to be re-enforced and key health, education and infrastructure programmes and expenditures need to be maintained. Doing so will not only assist in creating the conditions for long term and positive economic growth but also allow the large, young unemployed populations of so many African countries to join the formal economy. We must not abandon any of the market related reforms which have acted as key drivers of growth for successful developing nations round the world. Good governance, open markets and strong institutions are vital for development. These factors need the support of domestic populations with Africa where once again the politicians have an important role to play. In other words there is a need to build a ‘Coalition for Growth’. In Africa we talk of how a pride of lions works to live and prosper, all working together for the common good. Quite a different picture from Asian tiger!
African competitiveness has received much too little attention - something my family, through the Brenthurst Foundation and its range of continental and international partners, has sought to address through the creation of the ‘Lake Kivu Consensus on Economic Competitiveness’. Africa needs to find the means within its own development and not be dependent on the vagaries of aid and donor sentiment. If Africa signs up for this growth and competitiveness philosophy then Africa’s lions will roar – and they will provide the interdependent network of jobs, security and free passage of trade, and economic growth which is vital for our future.
As the Spence Commission on Growth and Development points out in its report last lasted year – fast sustainable growth is not a miracle. Rather it is attainable for developing countries with the ‘right mix of ingredients’. The commission found that ‘countries need leaders who are committed to achieving growth and who can take advantage of opportunities from the global economy. They also need to know about the levels of incentives and public investments that are necessary for private investment to take off and ensure the long term diversification of the economy and its integration in the global economy’. Critically, therefore, the long term priorities of African leaders should not change despite the uncertain world in which we live. To the contrary, goals associated with the promotion of competitiveness must be accelerated. This competitiveness requires political and macro-economic stability, as well as social and environmental stability. Ever more important is what countries can do together, including improving trade logistics and deepening integration. With growth as a national and continental priority everything is possible.
Source: http://gazettebw.com
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