Kganyago: People should not resist 4IR but should embrace and engage with it
CAPE TOWN – Africa’s economic growth is anticipated to continue strengthening and rising. The question that was posed at one of the sessions which took place at the World Economic Forum on Friday was, how can leaders create the necessary environment to enforce policies and deliver the intended outcomes.
The panel which consisted of Christopher Bishop Head of Programming at CNBC Africa, Albert Zeufack Chief Economist Africa at the World Bank, Olusola David-Borha Chief Executive at the Standard Bank Group Limited and Lesetja Kganyago Governor of the South African Reserve Bank (SARB) narrowed the discussion on the Free Trade Agreement and the Fourth Industrial Industrial Revolution.
On the topic of the Fourth Industrial Revolution taking over the continent, Kganyago emphasised that people should not be resisting it but rather ask themselves how they can embrace and engage with it differently.
“I think what is understated is the impact that it would have on the efficiency with which governments can deliver public services," Kganyago said.
Further making reference to a pilot projects, the Reserve Bank ran with block chain to process transactions.
The Reserve Bank introduced block chain into the country's payment systems space, which usually clears "a couple of trillion rands a day". Block chain technology managed to clear the same amount of payments within 90 minutes, Kganyago said.
He highlighted what the efficiency gains of that would mean, owing to the fact that this happened just in the wholesale market, if rolled out to the rest of the country or continent people would be able to move money quickly and reduce the risk in the payment space.
Kganyago said that in order to get the elusive growth that every country is searching for, Africa needs to take advantage of the opportunities offered by globalization by trading more with each other, whilst simultaneously trading with the rest of the world.
When asked what are some of the greatest challenges the continent will face when it comes to free trade, Kganyago said, “I am yet to think of challenges but rather the opportunities it offers as we take advantage of the opportunities we will figure out what the challenges are.”
Kganyago further added that coming to grips with what the challenges are going to be means that there has to be a conversation that involves African companies that are doing trade with other companies within the African continent and ask them what are the barriers that they are facing and what it is that they would like to be done.
Olusola David-Borha, Chief Executive, Africa of the Standard Bank Group had this to said: “We have seen the political will to actually get the agreement rectified. What we need to see more on the continent is better economic governance, I'm hoping that as the government comes together, as they understand the implications of bringing down barriers driving intra-africa trade,that ability to improve economic governance, to strengthen our institutions we will have the political will to put that in place.”
One of the big gaps that need to be filled out in the African economy is the transport infrastructure, we all need infrastructure across all African countries unlike prior when countries just had a mere railway to the port. Private-public partnerships are being seen as the way out.
The reality is that the public sector does not have sufficient capital to deliver the infrastructure that is required on the continent we know where debt levels are. That therefore means that there has to be collaboration with commercial banks,DFIs, export credit agencies, philanthropic organisations, venture capitalists, equity providers and the only way you can get all these stakeholders working together is when you have a clear regulation legal framework, you must have governance that is transparent, Olusola said.
Olusola made reference to the the South African Renewable Energy Independent Power Producer Procurement Programme, which is paraded as a plan within which, over the next five to ten years, there will be transparency and therefore the private sector will have the confidence to invest in renewable energy. About 14 billion dollars has come in through this programme, she said that is a model that can be replicated.
Clear rules, a governance structure, and bringing all the different parties together is how we will be able to attract the much needed capital, she added.