African leaders meet to discuss economic relations

African leaders meet to discuss economic relations

Monday, 03 May, 2010

The economic crisis sent shockwaves throughout the world and has led to a re-evaluation of the way the global economy is governed. This has opened up opportunities in emerging African economies to seize the opportunity and contribute to global economic growth. African leaders will congregate in Dar es Salaam, Tanzania for the 20th World Economic Forum (WEF) on Africa from 5 to 7 May to discuss ways forward and improve relations with key economic partners.

With over a billion on the continent, Africa has joined both China and India as one of the most populous regions on the planet. As opportunities arise for young people with access to an abundance of natural resources and market potential, it comes as no surprise that there is an increasing trend towards South-South co-operation. Africa is looking to Southern hemisphere partners for increased economic possibilities in these economically volatile times.

However, in order to capture and let flourish the potential in Africa, institutional obstacles need to be overcome. These include the need for more investment in infrastructure, access to education and healthcare, peace and security in troubled areas, regional integration, and transforming climate change challenges into economic drivers.

Fostering good governance

Leaders at the Forum will break their discussions into four thematic pillars, the first of which will centre on building effective institutional and governance structures. Although progress has been made in achieving institutional reforms in Africa, it remains uneven across the continent. Regional integration initiatives are not consistently translated into national policies, which slow the pace of reform. A good indicator of how far democracy has advanced in Africa will be the outcome of the elections in more than 20 countries in 2010 and 2011.

Peace and stability usually goes hand in hand with democratic practices. Conflicts in Africa are associated with autocratic governments, which themselves are not necessarily inhibitors to economic growth. What they do portray is a lack of transparency, which is reflected in the mismanagement of natural resources and which severely hampers developmental progress and investment opportunities.

Power to the youth

The empowerment of women and youth is the second thematic pillar at the Forum. The role of women has improved in Africa, by and large, as laws are passed that give them more rights. Yet progress is uneven throughout the continent and gender discrimination in law and custom remains. A striking example of the transformation undergone in Africa is that of Rwanda, when in 2008 it became the first country in the world to have a female majority in parliament.

Over 60 % of Africa’s population is under 25. The talents of this massive section of the population need to be cultivated and harnessed for future political generations. This is why the Forum will include a summit for over 200 of the world’s Young Global Leaders to discuss this issue.

The problem with growth

For growth to happen, Africa needs products to sell, and markets to sell those products. However, over the past 50 years Africa’s share of world trade has not grown. Although trade negotiations such as the recent Doha round and the Generalised System of Trade Preferences Among Developing Countries give some market access to outsiders, the problem remains within Africa and its supply problem. This is the third thematic pillar that delegates to the WEF for Africa will discuss.

Worryingly, despite the richness inherent in Africa in terms of agricultural potential, a lot of African countries continue to import most of their foodstuffs.

A positive sign in developing economies in Africa can be found in the ICT sector. Africa has undergone something of an ICT revolution in recent years, especially in the mobile phone sector (although the parallel growth of internet access is still lagging behind). This is due to a competitive business environment, which has generated breathing room for companies to grow, and given economic benefits to parts of Africa.

Securing investment

Investments found their way to Latin America and South Asia more easily than they did to Africa until recently. This disinclination was due to the unfavourable investment climate many saw inherently linked to Africa due to the risks associated with political situations or environmental concerns. However, investment has now picked up, mainly thanks to China, and also thanks to many reforms taking place across the continent to reduce the perception of risk.

It is also due to the fact that investors now demand that international standards be adhered to ahead of any potential investment.

The Forum will be a chance to discuss these and other important issues over three days of debates in Dar es Salaam.