African Truths at a Business Conference

By Gregory Simpkins

I attended the first Global Africa Business Initiative (GABI) in New York recently. It was well produced and well attended, and I got a lot out of being there. In addition to the many dignitaries, successful businesspeople, and civil society leaders speaking, there were numerous people in the audience well worth knowing. It was unfortunate that all the networking sometimes drowned out the speakers, but connections were made that should lead to enduring collaborations. There were several themes I found compelling.

Zain Verjee, Executive Producer of this event, started it off by quoting the late Bishop Desmond Tutu, who said: “We need to stop just pulling Africans out of the river and turn to seeing why they have fallen in in the first place.”

The New Partnership for Africa’s Development (NEPAD) was established in 2001 with a mission to “work with African countries, both individually and collectively towards sustainable growth and development.” It was designed to address six main sectors including:

• agriculture and food security;
• climate change and natural resource management;
• regional integration and infrastructure;
• human development;
• economic and corporate governance; and lastly,
• cross-cutting issues, revolving around matters such as gender, ICT, capacity development, and communications.

There have been successes in the collaboration of NEPAD. For example, NEPAD manages the Comprehensive Africa Agriculture Development Program (CAADP), aimed at revolutionizing agricultural production, food security, and marketing of agricultural products across the continent and beyond. Through CAADP, African agricultural departments and ministries have been enabled to achieve increased investment and output in agriculture, such as in Burkina Faso, Ghana, Malawi, Togo, and Zambia, as well as in other countries. At a time like now when global food prices are high and sources of foreign supply are tenuous, CAADP’s facilitation of cooperation has never been more necessary.

Strive Masiyiwa, Founder of Executive Chairman of ECONET, said that every country in Africa has its own opportunities and risks. As the continent develops the African Continental Free Trade Area (AfCFTA), there will always be differentials in the ability for foreigners to access these opportunities and the capacity of governments to create and maintain an attractive economic environment. Therefore, AfCFTA is not demanding that all members fully comply with its standards.

The differences in capacity has long been an obstacle that the Regional Economic Communities have faced. In each one, there are outliers – countries whose economic abilities or resource base are greater than their fellow members. This has been the case for the European Union, where countries such as Greece have underperformed while countries such as Germany have overperformed in relation to the others.

Brad Smith, President of Microsoft, a company that surely is interested in Africa’s natural resources, had a different take. “Africa has an important natural resource: young people, but too few are in the workforce. Each year, African universities graduate education young people who find themselves bereft of legitimate business opportunities. Some manage to succeed despite the absence of a welcoming environment for innovation.

Anyone who has attended the annual African Diaspora Network conferences in America’s Silicon Valley has seen or met with Africans who have created innovative companies designed to meet not only Africa’s needs but those that exist globally.

Brain drain

Unfortunately, too many of these young innovators feel compelled to leave the continent to realize their plans. In a 2012 paper on the impact of Africa’s brain drain, Bernard Mumpasi Lututala of the Council for the Development of Social Science Research in Africa, he looked at research on African migrants from 1990 to 2000. “The proportion of skilled emigrants in all African migrants increased during this period from 22 percent to 31 percent, therefore demonstrating the intensification of the phenomenon,” he said.

Mumpasi cites the difficulty of finding reliable statistics in making calculations on the impact of brain drain. However, there is another obstacle to that which I believe is overlooked. How can you tell whether that skilled African adult with be able to achieve in his destination what he or she might have had they stayed in their home country? There are plenty of accounts of skilled Africans in the West working well below their education. Moreover, how can we know for certain what young African will achieve in their new homes or what second generation Africans have or will achieve if they identify with their new nationality? Is this African-born or African descendant woman scientist considered an American or a Namibian? What ties to her traditional homeland does she claim?

Darren Walker, President of the Ford Foundation, said something many donors fail to acknowledge: “A silver bullet won’t come from New York or Silicon Valley but from the field.” Other speakers at GABI echoed this sentiment.

Too bad this realization didn’t come to donors years ago, who spent billions in foreign aid without adequately consulting recipients on what they wanted or needed.

In the Bible (Matthew 7:9), it asks “Which of you, if your son asks for bread, will give him a stone?” Well, this is in effect what donors have done, perhaps unintentionally in some cases, by directing aid to what they thought Africans needed as opposed to what Africans thought they needed. As a result, many of these aid programs ended up like rain in the desert – a lot of sound and fury at the outset but no measurable results like water evaporating in the sand.

Wamkele Mene, Secretary-General of the AfCFTA Secretariat, acknowledged the difficulties his program is facing in creating a single market. He said that while Africa offers a single market of 1.3 billion, there are still 42 currencies and several legal systems. Colonial Africa, after all, was not designed for Africans but for the colonial countries who gave no thought to connecting neighbors by road or air if that neighbor spoke a different language and didn’t advantage the colonizer.

Although the Euro was envisioned in the 1960s, it was not formed virtually until 1999, and the first notes and coins did not circulate until 2002. The European Union’s solution to exchange rate fluctuation was centralized economic management. Even though the Euro has been successful, the road to its adoption was fraught with sharp disagreements. France and the United Kingdom, for example, were dead set against the reunification of Germany, apparently fearing the economic powerhouse that eventually did result. Even so, the United Kingdom continued to use the British pound as its currency alongside the Euro and has now departed the EU. If it took the EU decades to form a functional monetary union when they previously did business with one another, how difficult will it be for African countries whose intra-continental trade is so low?

Climate change justice?

Finally, Her Excellency Mia Mottley, Prime Minister of Barbados, said publicly some truths about environmental efforts pressed on developing countries that we say amongst ourselves but rarely in a public setting. She said that climate is a nuanced issue. In some countries, the use of charcoal for cooking, despite its obvious pollution inside homes, is caused by a lack of fossil fuels and electricity. Since many developing countries have oil and natural gas, how realistic is it to expect them to abandon such energy sources when technology has not reached a point that renewable sources such as wind, solar, tidal, and geothermal are not yet ready to be widely deployed in urban, peri-urban and rural settings? Yes, Africa experiences a lot of sun, but solar energy cannot replace fossil fuels on the ambitious timetable being pursued by those in developed countries.

Mottley also said something exceedingly profound that begs to be acknowledged more widely: developing countries were denied the ability to participate in the Industrial Revolution while it was taking off, but now they are paying in terms of climate change that hits these countries harder than they can cope with. This is a cruel irony that cannot be ignored, especially since developing countries attempting to industrialize must either be allowed a grace period to pollute more than desired until technology can catch up with anti-pollution efforts or a more rapid infusion of investment in technology must be deployed to allow for low-carbon emission development.

There were more ideas expressed in public presentations and networking engagements at GABI. We should look forward to more frank discussions, but more so the results of implementations of these ideas between now and the next conference.

Gregory Simpkins, a longtime specialist in African policy development, is the Principal of 21st Century Solutions. He consults with organizations on African policy issues generally, especially in relating to the U.S. Government. He also serves as Managing Director for the Morganthau Stirling consulting firm, where he oversees program development and implementation. He further acts as a consultant to the African Merchants Association, where he advises the Association in its efforts to stimulate an increase in trade between several hundred African Diaspora small and medium enterprises and their African partners.