Africa should use its competitive advantage
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GHANA advocated for competitive advantage and architecture at its independence.
The export of cocoa beans brought much-needed relief to the Ghanaian and Ivorian farmer, just as mohair and wool did to Lesotho.
But, as explained by Jagdish Bhagwati in his Immiseririzing Growth theory in 1958, economic growth can result in a country being even worse off.
Ngugi wa Thiong’o realised this much earlier in his career. After publishing The River Between in English and a few more earlier, he dared the world and started writing in his native Kikuyu language.
Only once he had done so could his books be translated in other languages. In his book, Decolonising the Mind: The Politics of Language in African Literature, wa Thiong’o sheds light on economic development and trade.
Wa Thiong’o plants analytical logic of why not only Bollywood and Nollywood succeed, but why the Netflix model would succeed. Native content developed and diversified in situ sustainable development defined.
Its inclusive dimensions are beyond question.
Six years ago, Ricardo Hausman in his exposé on Secrets of Economic Growth, advanced the next neighbour theory of diversification as a key feature in the process of growth.
He argued that this was the science and art of adding capabilities in the economic space. This sharply contradicts the theory of competitive advantage.
For years, the latent and manifest growth, as well as development policy of Africa has been predicated upon competitive advantage, which has created the present day global division of labour through trade.
Therein lies the continued underdevelopment of colonial and postcolonial Africa.
However, this is to change if the declared becomes also the latent.
Recently, Ghanaian President Nana Akufo-addo dumped the competitive advantage theory at the doorstep of the Swiss government in a direct and dramatic fashion. is
Akufo-addo told the Swiss that Ghana was no longer interested in an exchange of cocoa for chocolate, nor gold for jewellery, which has been a feature of Ghana-swiss trade relations for more than 200 years.
Akufo-addo was not going to be patronised. He declared that Ghana would process and produce its own chocolate and jewellery.
This is the model that will now define the Swiss and Ghanaian trade relations. The story of Africa needs trade, and not aid.
Its manifestation through the Africa Continental Free Trade Agreement should embrace the native diversification architecture of wa Thiong’o’s publishing strategy that he adopted five decades ago.
Bollywood and Nollywood know it works, so does Netflix. The Hausman economic theory of diversification explains why the Asian Tigers succeeded while the Big Five of Africa failed.
Dr Lehohla is the former statistician general of South Africa and the former head of Statistics SA.
BUSINESS REPORT ONLINE