What Africa really needs

COLUMNIST Malcom Sharara wrote a very thought-provoking piece this week on Fin24. I would like to expand on his ideas.

READ: Africa: What next?

Sharara’s main point was that Africa’s undoubted economic potential is not being realised because African countries continue to rely too much on single resources, the chief one being oil, the price of which has just about halved during the past year on the world market. That is why growth in countries like Nigeria and Angola has basically come to a standstill.

This is what is known as “single-source” economies. Nigeria and Angola are not the only guilty ones; there are several others as well.

For instance, Ghana’s most important export commodity is cocoa, the production of which provides an estimated 1.5 million people with work (out of a labour force of about 11.25 million). For the rest, the country to a lesser extent also exports oil, gold (in fact, its old colonial name used to be the Gold Coast) and bauxite.

Something similar applies to neighbouring Cote d’Ivoire, where cocoa is the chief export commodity, but buttressed by oil, coffee and gold.

These countries – and one could name many more examples, also outside Africa – show a common theme, touched on by Sharara: they all rely heavily on one export commodity.

This means that they are very much at the mercy of world markets. When the oil price goes down, those dependent on oil suffer, and their people with them.

The same thing has repeatedly happened in the past century with cocoa. The price has fluctuated a great deal. In fact, since the 1980s the world market price for cocoa beans, adjusted for inflation, has declined by half.

Clinging to a small boat in a raging storm

Take into account that most farmers receive only 40% to 50% of the market price, due to the cut taken by middlemen, big chocolate manufacturers and taxes. In other words, the farmers may often be likened to people desperately clinging to a small boat in a raging storm, being flung about and not being able to do very much about whatever happens to them.

The answer, simple on paper but more difficult in practice, is of course to diversify.

First, it would help if producing countries could process the basic commodity – be it oil, cocoa or gold – themselves, instead of exporting the raw material and allowing somebody else to make a lot of money processing it. This is one of the biggest challenges, to add value and then export it.

I said this is easy on paper, but more difficult in practice for a very good reason. In order to reach the value-added phase, you need a well-educated work force. After all, you cannot pull an average cocoa peasant, however naturally intelligent and dynamic, off his field and put him in charge of a chocolate factory.

You need to empower people first to do the more sophisticated jobs in the modern 21st-century economy. (Which, of course, makes nonsense of the way our government applies its rigid ideological version of black economic empowerment and affirmative action, but that is a discussion for another day.)

This means that any government of any country with a large Third World component should invest massively in education and vocational training.

But throwing millions at the problem will not enable you to make headway. The educational and training well must have, so to speak, a bottom; otherwise all the money poured down the well will be wasted.

In other words, your education and vocational training must be functional. It must actually deliver a workforce which is able to manage an advanced economy.

And that means in turn that the educational culture must be sound. You need an army of teachers and instructors who see their job as an ideal, not simply as a means of getting a salary at the end of the month.

I shall forever be thankful to most of the teachers I had at school during the 1950s and 1960s. With a few exceptions, they were hard-working idealists who gave me a head start in life.

All of these are sadly often not present to an adequate extent in many Third World countries. I certainly do not see it to the required degree in South Africa.

This may be ascribed to a few factors.

Mere lip service to the poor

First, all too often Third World governments (including our own) pay mere lip service to the development of the poor. Rather, their focus is on their own power and wallets.

This gives rise to a general culture of corruption, as fish tend to rot from their heads. State officials, including teachers, often take their cue from leaders in government.

Also, governments sliding in the polls sometimes take refuge in populistic approaches which could ruin their countries. The main example is Zimbabwe’s President Robert Mugabe who countered his own growing unpopularity to kick out the white farming community, ostensibly to end the indisputably skewed land ownership.

In practice, he showered his own cronies with the illegally acquired land, while transforming a food exporting country into an economic basket case. I am afraid that our own government may be moving to something similar.

Nevertheless, in theory the way for a Third World country to elevate itself is clear. What is mostly lacking is the political will and the political framework, including democracy and the rule of law.

It is sad, but true.

* Leopold Scholtz is an independent political analyst who lives in Europe. Views expressed are his own.