An African Miracle is possible. It is slowly but steadily taking shape as the continent addresses the critical issues that have held it back. I do not use the term, “miracle” lightly. The World Bank assembled a group of most prominent economists and constituted the Commission on Growth and Development in 2006. The team reported that since 1950, only 13 countries sustained economic growth at 7 percent or higher for 25 years. These 13 countries are all from East Asia, except a few, that include Brazil and, importantly, Botswana.
The Commission reports that “some people view these cases as ‘economic miracles,’ events impossible to explain and unlikely to be repeated.” I am adhering to the same high standard of a miracle when I state that an African miracle is possible.
Many of you might find my view puzzling. After all, globalization, that fuelled economic growth over the last seven decades, appears to be ending. The principle of multilateralism, that underpins the current world economic order, is also under attack. And Democracy, that in my view underwrites long-term social and economic stability, appears to be in retreat worldwide.
There have been some setbacks in Africa too. According to a report of Credit Suisse, Africa’s share of world wealth is not even 1 per cent. Wealth per household in Africa actually fell by 1.9 per cent from 2016 to 2017 whereas it rose by 8.8 per cent here in North America.
It is hard to imagine that an economic regime that allows such monstrous inequality can be sustained. It will surely cause a populist revolt in one form or another. Migration from Africa to Europe is a manifestation of such tension.
So you may ask, what is then the source of this Afro-optimism amid such global pessimism? You may also say “we heard this African miracle story about 15 years ago. But it proved short-lived.” And you are actually right to doubt. The collapse of commodity boom revealed that Africa is still vulnerable to a downturn of commodity prices.
I am aware that the Asian miracle was driven by exports of manufactured goods to open and growing markets in Europe, U.S. and Japan. Such a favourable environment does not exist today. Manufacturing in Africa has actually been declining by 2 per cent annually. Some say that as China upgrades its economic structure, a huge room will be left open for basic light manufacturing for Africa. But even if it does, I doubt that low value products can be a basis for closing the huge gap between Africa and the developed and emerging economies.
Therefore, we will not create an African miracle by emulating the East Asian model. I envision that our own African growth model will drive an African miracle. Sustained high economic growth in the continent will be driven by African unity and political and economic integration.
I am not advocating an inward-looking protectionist policy here. I am aware that such policy failed in Latin America decades ago. African markets will remain open to every country in the world. Indeed, we will promote free and fair trade. But, the main driver will be the growth of African markets. Let me give you an example.
In Africa, intra-continental travellers are often bound to illogical and time-consuming routes via Europe and the Middle East when flying between African countries. The International Air Transport Association (IATA) projects that if just 12 key African countries opened their markets and increased intra-continent connectivity, an extra 155,000 jobs and US$1.3 billion in annual GDP would be created in those countries.
In January this year, the African Union (AU) launched the Single African Air Transport Market (SAATM) to transform intra-African air travel, lower costs and increase connectivity. Under the SAATM, African countries have already relaxed visa restrictions for African citizens. We also launched an African Union Passport for heads of states and senior officials in 2006, and we plan to distribute it to all Africans by 2020. Let me underscore that the SAATM is only one of several components of Agenda 2063 whose guiding vision is the creation of “An integrated, prosperous and peaceful Africa, driven by its own citizens and representing a dynamic force in international arena.”
I, like many African leaders, fully subscribe to this Vision. As you know, Africa’s intra-regional trade is very small. In 2016, intra-African exports made up only 18 percent of total exports of African countries. This compares poorly to 59 per cent for intra-Asia and 69 per cent for intra-Europe exports. The figures for imports are similar.
In 2017, intra-regional exports of sub-Saharan Africa amounted to only $68.8 billion. The continent’s GDP was $1,648.8 billion. So, intra-regional exports were a pitiful 4.17 per cent of GDP. If we triple intra-regional exports, we can increase the continent’s GDP by more than 8 percentage points. This will go a long way to achieve a 7 per cent economic growth.
In March this year, 44 African nations signed the Continental Free Trade Agreement (CFTA) under which the nations commit to cut tariffs on 90 percent of goods. This is a big progress considering that there have been multitudes of overlapping sub-regional trade agreements and customs unions. CFTA now creates geographically the largest free trade zone in the global economy.
The United Nations Economic Commission for Africa (UNECA) projects that the simplification of border controls and the drops in duties and other costs will boost intra-regional trade by 52 per cent in five years. We still have work to do at the highest political level to complete CFTA. Eleven (11) African nations have yet to sign the agreement, and this includes the continent’s two largest economies, i.e., South Africa and Nigeria. But I am confident that both countries will come on board as they regain sound economic footing following the next elections – Nigeria in early 2019 and South Africa in 2020.
The political will and determination to fully implement the CFTA exists. Once implemented, it will be the catalyst that moves the region toward high levels of intra-regional trade.
The foundation for development lies in a well-educated and healthy cadre of human beings. Africa’s population is young and growing fastest in the world. In the coming decades, Africa’s population will double to some two billion people, and many of them will be under 18. This could bring tremendous opportunities for economic growth. Young Africans are tremendously entrepreneurial, talented and dynamic.
These young Africans could harness new technologies and ignite a new dynamism for growth but only if they are well educated, trained and healthy. Here too, Africa is making a major stride. The working age population (age 15 – 64), who either had no formal education at all or did not complete primary school, declined from nearly 90 per cent in 1960 to less than 50 per cent in 2010. The working age population with primary and secondary education completed rose from about 10 per cent to more than 40 per cent over the same period.
Granted that the quality of education, particularly in the primary and secondary levels is unsatisfactory. Also, too many young children grow stunted because of inadequate care and nutrition during their first 1000 days of life.
We, African leaders, are now keenly aware of these challenges. It will take time, given limited financial resources and qualified teachers available. But, in a decade or two, you will see major progress in overcoming the challenges of quality of education and care in early childhood too. We will harness diversity in careers and jobs. We will encourage entrepreneurship, arts and sports. We will encourage venture capital.
Realizing an African miracle, i.e., sustaining economic growth at 7 per cent per year, of course requires investment. The World Bank, IMF, World Economic Forum and our American friends have been telling us to implement reforms to make it easier to do business.
Many African countries have made important reforms to do so and I am sure that other African countries will follow. But, is this how China and India have succeeded in attracting huge amounts of foreign investment? I hear that having a very large market – and expectations of an even bigger market – and a well-educated and disciplined labour force is the key to attract investment.
This is exactly what we are doing in Africa through the establishment of a pan African common market with strong regional infrastructure and through our commitment to education. Our commitment to education includes higher education, in particular in science and technology. This requires the transfer of science and technology from the West, including from universities. I therefore support strong collaboration between universities in the U.S. and our counterparts in Africa.
Africa should not be forever destined to be an exporter of unprocessed mineral and agricultural resources. We need money and technology for value-addition of our resources. This will be the basis for industrialization of the African continent. I said earlier that intra-continental trade will be a major driver of economic growth in Africa. I am aware that people cannot trade unless huge infrastructure deficits in the continents are addressed. It is estimated that the cost of transport in Africa is on average 50-175 per cent higher than other parts of the world.
Let me repeat. The insufficient infrastructure networks across the continent have limited cross-border flows of trade, capital, information, and people. It has drastically affected Africa’s growth and broader development performance and regional integration. Improving land transportation is an imperative to development.
That is why I accepted the appointment by the Africa Union Commission as High Representative for Infrastructure Development Championing to spearhead the modernization and upgrading of selected Trans African Highway Corridors and their missing links. One of my main tasks will be to garner political buy in and ownership of member states as well as ownership of regional economic communities.
I strongly believe that the existence of a reliable infrastructure of roads and railways, running North to South, East to West of Africa, is critical to opening up the Continent and making it the gateway to the 21st century. You must have heard of the Trans-African Highway; the hugely ambitious, grand project, launched in 1971. It is a network of nine highways which, when connected, will cover a combined total of 60,000 kilometres across the continent. One of them will stretch 8,000 kilometres between Cairo and Dakar; another for 8,000 kilometres between Cairo and Cape Town; a third for 6,000 kilometres between Lagos and Mombasa; and a fourth for 4,700 kilometres between Dakar and Lagos.
Only one of nine highways has been completed so far. That is the Trans-Sahelian Highway, which runs 4,500 kilometres between Dakar in Senegal and N’Djamena in Chad. Although the others are only partially finished, countries are progressively opening them section-by-section. It is just one example of what we plan to complete.
There are also gigantic steps forward in rail transport as the new vision of Africa takes shape. One of those steps is a modern rail line between Ethiopia and Djibouti that has recently been opened. Another big project is the East African Rail Master Plan. This is a proposal to rejuvenate lines among Kenya, Uganda, Rwanda, South Sudan and Ethiopia. It is estimated to cost $13.8 billion. The first section was inaugurated in June this year, covering Nairobi and Mombasa.
With the support of all the relevant institutions and offices of the AU Commission and the Continent’s partners, I will make full use of my position as the AU High Representative for Infrastructure Development to push Africa closer to the realization of the dreams of our founding fathers.
Our founding fathers envisaged a united and interconnected Continent that enjoys easy movement of goods and its citizens. As we build strong infrastructure and human capital, I am confident that Africa will accelerate and sustain higher economic growth. But, growth that enriches only the rich is not what we want. We must ensure lasting peace and stability, that requires shared prosperity.
One of the biggest threats to the shared prosperity is Corruption. I accept that it has been difficult to fight corruption on the continent. I admit that even in Kenya, where I have joined President Kenyatta in waging a campaign against corruption, many remain skeptical. But I see a turning point. Now, in most African countries, people’s voices can no longer be ignored. My friend, President John Magufuli of Tanzania, won the election for the ruling CCM party, riding on the wave of public discontent about corruption and he has since made huge gains toward eradicating the crime. In Kenya too, we have taken strong actions against corruption, and will continue to do so. Our actions are having a strong positive impact.
Alongside fighting corruption, we must renew faith in democracy. As a true and strong believer in democracy, I urge Europe and U.S. not to forsake the democratic values and sanctity of human rights for the sake of partnership in anti-terrorism or for interest of their own private businesses. Democracy will enable our people to believe in policies and ideologies instead of ethnic affiliation, or what we call “negative ethnicity.”
Kenya nearly broke apart in 2007-2008 because of ethnic driven politics. The country was on an edge once again following the last election in 2017. Kenyans are now saying ‘we cannot continue living like this. We can’t continue living as Kikuyus, Luos, Kalenjins, Luhyas, Kisii, miji Kenda, etc.” It has to stop. Tanzanians have done it right from independence to date. It is Kenya’s turn to do it.
When I sat down with my partner in the Grand Coalition Government former President Mwai Kibaki a few months ago, he was struggling to understand why Africans go to international forums, talk boldly and loudly about continental unity, then go back home and start fighting tribe against another. It is curious and puzzling indeed. I sat down with President Kenyatta and agreed to launch a new journey, to a new Kenya; a Kenya where elections are not civil wars, where winners and losers embrace and where corruption is not a way of life. We also agreed to set up a taskforce to deal with issues we identified to be holding the country and to prevent their recurrence in future.
We urge other African leaders to follow our example. We need your support as leaders in academia and as diaspora. We need America’s support by standing up for, not against the ideals of democracy. Then we will deliver the African dream, which will propel the world into a better and more prosperous and secure 21st century. For all my life, I have been a Pan-Africanist and an Afro-optimist. My Afro-optimism never wavers. It remains stronger today than ever before.
By Hon. Raila A. Odinga, EGH
Former Prime Minister of Kenya.