gvA Update

Is Africa still rising? Real GDP growth in Sub Saharan Africa has eased to about 3 percent since 2015 from about 5.0 percent in 2014. A return to a 5 percent growth rate is not likely until about 2021. Without an increased capacity to produce tradable goods, real GDP growth rates across Africa even after 2021 will continue modest and may never approach the seemingly inexorable pace set by China during its contemporary economic renaissance. As I said, Africa has not been able to create jobs, that is meaningful and well paying jobs. With just about a 5 percent average real GDP growth rate across Sub-Saharan Africa, translating into a 2.5 percent real per GDP growth rate the implication is that jobs are not being created. And for sure with that type of speed you cannot compete with China and its Asian Tiger relatives. China produces virtually everything you see around you. So what can Africa produce to sell to China? In fact, and more importantly, what can Africa produce to sell in its own local markets to ward off apparent China's predation? Frankly, I have nothing against China and the Asian tigers. In fact, I am proud of them and the extraordinary achievements they have recorded in the past couple of decades. We want to be able to continue business with them, but this has to be mutually beneficial. And so it is left to us how to design strategies for this, because the on-going one sided benefit in our trade relationship will continue to kill production and jobs in Africa. So let us start with an African requirement that China process in Africa at least 50 percent of the minerals and raw materials they get from Africa. However, more importantly, Africa has to support its communities to be viable for economic activity. Everything should start at the community level. We must have communities that are economically competitive in the production of goods and services. This is the real way out. And to accelerate this, even our churches and mosques must set up arrangements such as the promise keeper program that I introduced at NAPEP when I had the high honor and privilege of assisting the President in serving the nation as National Coordinator and Senior Special Assistant. But more importantly, we need to support and strengthen our Microfinance institutions and even commercial banks to give loans to our micro, small and medium enterprises. Africa cannot continue to look outside for help. The solution is in Africa and we must design governance structures and processes to activate it. I am Magnus Kpakol, and that is my view.

 

Posted: Aug 2nd, 2016 @ 03:44:19 AM