Time is here to get Africa's economies back on track
On JULY 6 this year Nigeria’s eminent public servant, Africa’s regional integration doyen and scholar-diplomat Professor Adebayo Adedeji was buried at his home in Asuwaju Court, Ijebu Ode, in Nigeria’s south-western Ogun state. The memorial service took place at the Cathedral Church in Ijebu Ode, which I attended. Adedeji was born on 21 December 1930 in Ijebu Ode and died on 25 April this year at the age of 87.
On 7 July 2018, the UN Economic Commission for Africa (Uneca) hosted a symposium in Lagos to honour the life and extraordinary work that Adedeji had done during his tenure as executive secretary of Uneca between 1975 and 1991.
I was privileged to have known Adedeji during my critical years of completing a doctorate in international relations with the University of Witwatersrand, which focused on Africa’s regional integration efforts. I also co-edited a book which was dedicated to Adedeji in 2016 titled Region-Building in Africa.
He was instrumental in key policy documents including the harmonisation of regional policies that guided Africa, such as the 1980 Lagos Plan of Action (LPA), the Abuja Treaty of 1991, and outlining the need for a fully integrated internationally competitive regional economic community prioritising infrastructure, trade and services, as well as an airspace-driven liberalised market strategy for the free movement of people, goods, and services.
Adedeji also called for Africa’s five sub-regions to harmonise their policies - through the Yamoussoukro Declaration of 2000 - with a view to fully liberalising Africa’s airspace market by 2002. It was the Yamoussoukro Declaration that spurred on the creation of a free trade area between the Common Market for Eastern and Southern Africa (Comesa), the East African Community (EAC) and the Southern African Development Community (SADC) at a meeting in Cairo in 2004 where a regional consensus ensued the establishment of a Tripartite Free Trade Area by 2015.
Adedji also designed a regional integration co-operation framework for Africa’s five sub-regions which led to the Preferential Trade Area (PTA) being formed in 1981, and which became Comesa by 1993. He described the 1980s as “Africa’s Lost Decade,” since economic integration was ineffective, with massive debt building up and anaemic economic growth.
In 1980 external debt was at $48 billion (R638bn), reaching $230bn by 1988. During the 1980s, a further negative development for Africa was the IMF and World Bank’s Structural Adjustment Programmes (SAPs).
It was during this crucial period that Adedeji put forward an impressive socio-economic plan for Africa’s governments to implement - the African Alternative Framework to Structural Adjustment Programmes for Socio-Economic Recovery and Transformation (AAF-SAP). But unimplemented by Africa’s governments with very little consideration given to actualising some of its key elements for achieving manufacturing and job creation.
Because of the lack of growth drivers, Africa’s job creation has been moving in the wrong direction, with labour being boosted in semi-skilled manufacturing (mining particularly basic metals, and cars), but in 2017, Africa had a workforce of 65 to 70 percent of its 1.3 billion people in the agriculture sector, which is the backbone of African livelihoods.
Yet, there is very little agro-industrialisation attempts being made by Africa’s governments to increase value additions within this sector and to boost manufacturing output. When assessing Africa’s largest economies - Nigeria, South Africa, Egypt, and Kenya - very little partnerships exist among African countries. Kenya for example, has, as its main agricultural trade export, coffee beans, which it exports in its raw form to the US, China, France, and India, among others, with no value chain with Angola, Ethiopia, or Burundi - the other major African coffee bean growers.
Nigeria, for example, spent $2bn annually on rice imports from international markets with very little consideration being given to importing rice from the continent, while the country is consuming 8 million tons of rice a year and only produces 50% of what it consumes annually. Egypt imports palm oil from Malaysia rather than from Nigeria.
The value chains for soya between South Africa, Zambia and Zimbabwe, for example, are non-existent.
Owing to Africa’s low levels of economic complexity, who produces and who manufactures goods are critical considerations.
Africa’s growth dynamic has thus far been largely due to an increased resource-based production activity, with very little spill-overs into manufacturing output.
Partnerships among Africa’s countries are therefore essential, and a key driver to achieving economic growth and job creation.
Particularly critical is addressing the major issue of 11 million unemployed youths in Africa in 2016. Regional integration is becoming more pressing, with technology being a key factor to achieving industrialisation.
With the Fourth Industrial Revolution expected to have a negative impact on low and semi-skilled jobs, it is critical that Africa grasp the opportunities offered by technological innovation and take advantage of its large market of 1.3 billion and comparative advantage.
Africa’s manufacturing sector is, however, moving in the wrong direction - and shrinking with a considerable decline being seen in value-added commodities. Between 1980 and 2010, Africa’s share of manufacturing aggregate output declined from 12% to 11%, whereas in East Asia for example the aggregate was more than 31% in 2010.
Manufacturing output also does not sufficiently take into account endogenous factors to spur on economic growth such as research; inputs from small, medium, and micro enterprises in markets that matter; and value additions.
According to the World Bank’s 2018 report, 50 million more Africans were poor in 2013 compared to 1990, and inequalities between rich and poor are also widening throughout the continent.
Africa’s biggest firms are leaving smaller businesses behind. In 2017, for example, five firms held 70% of South Africa’s market share and often a single firm can hold 45% the market share in sectors such as communication technologies, energy, financial services, food, and agro-processing.
It is thus imperative that the AU in its implementation strategy of Agenda 2063 consider reviving and more robustly implementing Adedeji’s 1989 AAF-SAP at country and regional levels.
The plan was drawn up by Adedeji at a time when Africa’s governments were economically stifled. However, Africa’s current economic situation is no different to that seen during the 1980s.
The document provides essential features of Africa’s central weakness: underdevelopment.
It is therefore imperative that in moving forward, Uneca ought to shift its focus from largely becoming a publishing house of economic trends and literature on Africa.
The organisation must instead return to diplomatic advocacy and the lobbying efforts that Adedeji engaged in during his 16-year tenure - and work with African governments to address seriously the implementation plans of the major elements outlined in Adedeji’s AAF-SAP, while simultaneously helping to transform the economic institutions of African governments.
* Nagar is a research co-ordinator at the Institute for Pan-African Thought and Conversation, University of Johannesburg