CONTENTS | ANB-BIA HOMEPAGE | WEEKLY NEWS
by Alain Agboton, Senegal, 18 March 1999
THEME = ECONOMY
A Forum was held in Dakar at the beginning of March
on the «Future competitiveness of African economies». Alarm bells
were sounded by the 200 participants coming from 17 African countries
What is preventing the African continent from playing a full, beneficial part in the move towards globalisation? A vital question. Africa is not competing strongly, in fact, it is actually doing rather badly. Its economies are not performing well and the future seems bleak. Poverty is widespread, overwhelming and catastrophic. The continent has recorded encouraging growth figures, for sure, in the last few years, but these are inadequate to reach the levels needed for self-sustaining development.
In 1980, Africa provided 2.8% of gross world output; 17 years on, the figures clearly show a fallback, at 1.4%. Africa's contribution to world trade is below 2%. Its potential, consisting mainly of crude natural resources, remains for the most part unexploited. Direct private investment is modest: only 1.5% of the global total. Public aid for development has tailed off. The result has been to marginalise Africa, almost alienating the continent from the unprecedented phenomenon of globalisation, which is characterised by a rapid, increasing economic interdependence, considerable trade in goods and services and movement of capital, increased spread of technology, especially communications, information carrying and automation.
The essential stimulus of competitiveness, driven by productivity (at least 10%), and born from globalisation, would be considered as an imperative. Without this, there is no progress. Without doubt, competitiveness has become the key element in the functioning of the world's economy and it has a multi-dimensional nature: actions organised and performed around liberal, diversified economies, technological development and training of people, creation of a political, economic, social and cultural environment which is favourable to business, increases in savings and company growth.
The alarm was raised by the 200 people (academics, business people, political decision-makers, representatives of international organisations), attending the Forum, which was held at the beginning of March, and which was organised by the department of the United Nations Development Programme (UNDP) dealing with Africa's future. The agenda is based on a «predictive approach».
The Forum was opened by President Abdou Diouf of Senegal, and aimed at making a decisive contribution to the search for improved competitiveness. The Forum intended to give the opportunity for decision-makers and wealth-creators: To consider Africa's position in the world; to discuss African initiatives and projects for improving competitiveness; to share ideas on ways of profiting from globalisation. The challenge is a continent-wide issue, since Africa has seen the warning signs from crisis-ridden Asia. An «emergency partnership» base must be consolidated, and «international-scale concerted action» taken from now on.
The need has arisen to form regional organisations, for strengthening integration i.e. to ensure Africa's inclusion in the world economy. A major challenge, indeed! African states, therefore, have the duty to give high priority to education, health, administrative reform and infrastructures.
Forum participants dwelt on the conditions required to strengthen competitiveness, offered by the macro-economic picture, governance, competitive factors in business and the external environment. The close, mutual interweaving of these elements will ensure progress and guarantee success.
An initial condition is a stable macro-economic climate, according to the specific needs of countries, with reduction in public expenditure, and in particular, realistic, immediate remission of external debt.
As for governance, investors need to feel confident with the exploitation and use of a level of transparency. Harmonisation of company law, support for peace, stability and security, strengthening of the capacity of civil society so that it can participate in formulating policy, decentralisation of some state powers and the fight against corruption, were among the parameters underlined.
Competitiveness in business, the third condition, was also a concern for Forum participants, who stressed the importance of having qualified personnel, in other words, investing in human resources and providing quality control alongside. As regards finance; development of investment (venture capital, starter funds, loan-guarantee funds) was highlighted.
Another component is technological modernisation, encouraging research and development, facilitating industrial reconstruction, creating strategic alliances, partnerships, mergers and/or acquisitions, both at a national and international level, as well as encouraging free enterprise, bringing together small and medium-sized companies and targeting the promotion of standardisation and quality control.
Finally, as regards the external environment, regional integration has been seen as a crucial factor in improving the competitiveness of African economies. Adoption of shared positions on globalisation questions, will arise from the establishment of a continent-wide strategic information system, which would accelerate application of the Treaty of Abuja, whose intention was to set up an African Economic Community. Finally, there must be a parallel development of the capacity to respond to external impacts, to adapt imaginatively to the global market.
The Vice-Chairman of the African Development Bank (ADB), Hamed Bahgad, commented at the beginning of the discussions that «prospects of stronger growth have been overshadowed by the recent international financial crisis, and the fall in prices of the basic products exported from the African continent.» And he stated that Africa «will no longer be able to strengthen its competitiveness within an international economy, more and more geared towards globalisation, unless we pursue with determination the reforms intended to rationalise even further our management of the national economy, to diversify our economic structure so that it is better able to withstand outside impacts, to encourage development in the private sector so that it will be the driving force of growth, and to resolve problems and conflicts in society, and in general to promote good governance.» A UNDP official went further: «It is clear that we have to compete to survive. We have to strengthen our capacity to sustain competition from other participants, on a daily basis, or we will disappear.»
Those taking part, believe that implementation of all these conditions will be, at the dawn of the third millennium, the basis and assurance of African competitiveness on the world stage, which will herald the «renaissance» of the continent.
A follow-up committee, proposed by Mr Abdou Diouf and chaired by Senegalese ministers, has been established. It will bring together representatives from the five regions of the continent and the organisations which sponsored the Forum, charged with developing a plan of action.
Once this inventory has been taken, the reforms and improvements needed have been detailed, and the challenge identified, what is left? It's anyone's bet. «Competitiveness is not an end in itself, but is a path to greater freedom» was the parting shot of the seminar.
END
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