Business News of Monday, 29 October 2018
Chief Executive Officer of Chamber of Bulk Oil Distributors (CBOD), Senyo Hosi, has charged African countries to industrialise to add value to raw materials in order to survive in tomorrow’s world and build a meaningful environment for its growing youth.
According to him, this would provide the much needed jobs and rake in more revenue to bridge the infrastructure deficit on the continent.
“Africa must industrialise by optimizing the value of its natural resources and agrarian output.
“It must structurally transform its economies from a primitive primary production model to a secondary and tertiary production model. Africa cannot continue to export crude and import petroleum products.
“It cannot continue to export copper and import electrical cables, export cotton and import used clothing, export coffee and import Starbucks.
“It is unacceptable that Africa outpaces the world in arable land per capita and yet it is food insecure,” he stressed.
He was speaking at the Africa Development and Investment Convention ADIC 2018 forum Switzerland on topic ‘Africa Rising –Lacing Politics, Industry, and True Partnership for Sustainable Development’.
Hosi described high youth unemployment as a recipe for immense social tensions capable of reversing many of the gains made in recent decades.
For him, it makes no sense to the youth that amidst all the resources in Africa, they should be unable to realise their aspirations.
The current primary level-based production economies of Africa make the continent highly vulnerable to commodity price volatilities.
While cocoa beans may experience volatility and weakness in prices, the prices of Cadbury and Lindt chocolates are relatively stable.
This affirms the economic view that exports of manufactured products are a lot less volatile and sensitive to long term price deterioration.
Sadly, he observed that countries like Switzerland with no production of Cocoa are rather known to produce the best chocolates in the world with raw materials from poor farmers in places like Asankragua in Ghana.
In his view, the world’s industries will have to expand or relocate closer to raw materials and the growing African demand.
Industrialisation is a critical tool in employment generation and poverty reduction and it spurs technological advancement and innovation as well as productivity gains.
These are critical competencies required for the survival of any region in this technological world driven by Artificial Intelligence and critical skills, such as innovation, visionary leadership and effective policy formulation and management.
Industry that accounts for about 10% of labour contributes about 25% to GDP while Agriculture which accounts for 50% of labour contributes about 15% to Africa’s GDP.
Therefore, agriculture is key to transforming Africa’s economy but more to the extent that it provides the base for manufacturing or industry.
Compared with other sectors, manufacturing is particularly well suited to create direct and indirect jobs with better pay and working conditions which improves the challenges with inequality and battles poverty.
The generation of direct and indirect jobs in manufacturing-related services involves more people in the entire African rising process.
Hosi is optimistic that industrialising Africa will address Africa’s employment concerns and transform the continent’s high economic growth rates into increased domestic revenue mobilization for development.
He was worried that most African countries are currently performing below the required threshold of 25% of GDP to support infrastructure investment.
He disagreed that the rise of African industries would be the fall of developed economies arguing that the rise of the Asian dragons did not crush the European Union or the North American economies.
“In any case whose capital will be used to fund Africa’s industrialization? Whose technology will drive industrialization? Whose capital equipment will be imported?
“The answer is obvious: the capital, technology and equipment of developed and leading economies to whom increased returns shall accrue.
“To achieve industrialisation, policy making must be deliberate and thorough – from the educational and skills development system all through to the realignment of institutions to ensure success,” he added.
He noted that to achieve the desired industrialization of Africa for sustainable development, Africa needs to strengthen its institutions by depoliticising, detribalising and building them on the principles of meritocracy and accountability.
This, he said would serve as the bedrock for policy credibility and effectiveness and will require the need to realign politics and Africa’s industry and entrepreneurship.