The African continent is poised for the rebirth of industrialization. Africa is not defined by poverty or desperation. It is characterized by promise and potential. In the post-coronavirus world, manufacturing and industrial development will be central to Africa’s ability to build a robust path to economic growth and development.
Africa’s counterintuitive advantage
While the African Continental Free Trade Area, launched in March 2018, can help facilitate to drive growth and jobs through trade, only by developing the continent’s unrealized industrial capacity will the African continent be able to generate structural change and drive a type of development that’s built on its own endogenous capabilities and competencies. This is the best way to raise living standards and improve livelihoods and consequently meaningfully alleviate poverty and unemployment.
Existing limited industrial development is counterintuitively an advantage. It represents a world of opportunity to fashion a new, more inclusive and humane type of industrialization and position Africa at the head of a new approach to worldbuilding. Africa also has the advantage of not being bogged down by sprawling industrial complexes modeled after America, European or Chinese industrialization. An equally valuable advantage is being a latecomer in the adoption of tried and true technologies and innovations from countries who industrialized earlier and have now lost industrial prowess and savviness.
What differentiates African technological innovations is that they provide real solutions to African needs in an inclusively impactful way. African governments are starting to deploy strategies to ensure entrepreneurs and investors meet contextual needs and African entrepreneurs act to achieve change through an innate ability to find the right business model. They turn what outsiders see as an unfavorable context into a goldmine that generates shared value.
The post-coronavirus world has opened a window of opportunity to attract investment and help African entrepreneurs do what they do best: ingenious innovation in a complex reality. African-led business and investment will now be able to make its mark by actually controlling the cards they are dealt. The name of the game will be to nurture Africa’s enormous potential to transform into the brightest continent in a world recovering from COVID-19.
Opportunity is knocking
Africa has become a model for how to fight against a worldwide pandemic through a collaborative approach that America, Europe and China have been unable to garner and put into action. That’s why opportunity is knocking at the continent’s door, the opportunity to put forth a working model for how to industrialize more effectively, efficiently and humanely in order to generate broad-based prosperity for Africans first.
Africa is poised to usher in the next phase of global growth. Longtime private and government-sponsored Chinese investors and newcomers like Turkey have been walking tall and far across the continent, investing heavily in infrastructure and nascent industry. But the post-COVID world slowdown provides African governments with the time and breathing space to reboot Africa’s innate, reflexive, self-generative resilience to reconfigure the continent’s future and that of its people.
If African governments and international and bilateral financial and aid institutions that support that future (whether sincere or guided by exclusive self-interest) are serious about boosting the African Continental Free Trade Area and raising living standards across the continent, it’s time they tried something new: inclusive, green industrialization. But Africa has to take the lead.
The 2016 Economic Report on Africa, published by the United Nations Economic Commission on Africa, was a harbinger of the Greening of Africa’s Industrialization, which is how the report is entitled. It presciently argued that Africa can “leapfrog traditional, carbon-intensive methods of growth and champion a low-carbon development trajectory”. Based on its own realities and learning from history and the experiences of other regions, the continent “can take advantage of new innovations, technologies and business models on a pathway that uses [its] natural resources optimally and efficiently as inputs to an industrialization process powered by [its] endowments of clean sources of energy”. In so doing Africa will pursue a development agenda “along a pathway that
ensures that economic growth is truly sustainable and inclusive through green jobs and positive
COVID-19 has unleashed Africa’s enormous untapped potential to develop this new industrial niche. African capacity and ability to make and sell things during a worldwide health crisis has revealed as never before that Africa has a winning formula that can secure the continent a central space in the world economy. The basic strategy for building Africa’s industrial potential is to build on that accumulated endogenous ability. Such a green industrial transformation “will make significant productivity gains in rural areas with vibrant hubs of agribusiness and linkages to industrial activity”. Because if there’s one thing Africans are demonstrating with their inventiveness and resilience in times of crisis is how their entrepreneurial spirit strongly correlates with responsive innovation and people-centered value addition. This has already ignited a productive chain reaction within and between countries.
The time has come for African leaders to get to work
With leadership comes the possibility of reinventing Africa’s development. Africans have demonstrated and continue to demonstrate their capacity to go beyond the resource curse, beyond short-sighted government policies and global competition. So it’s time for African leaders to get to work. They are no longer a club of charity seekers. As Western countries turn inward and squabble with each other like kids on a playground, Africa has already positioned itself at the forefront of change-making leapfrogging.
To assume this global leadership position, though, African governments and experts in development must get out of that box marked “preconditions for growth and enabling context”. That is a well-worn Western-style groove that has not provided a logic for constructive development in the African context. African leaders must now aim for a different development model, one that rejects dogma and reflects Africa’s incremental, idiosyncratic experiences. Economic development is not driven by the acquisition of “endowments” or the “right” characteristics. As Irene Yuan Sun argues in her excellent book The Next Factory of the World. How Chinese Investment is Reshaping Africa (2017), economic development is a micro process and is the result of “bootstrapping accompanied by a mindset at once relentless and irrepressibly optimistic.”
There is no clearer proof that there is no linear, straightforward relationship between endowment and outcomes than America’s lamentable performance in the face of the coronavirus health crisis. Sustainable development is based on multiple not necessarily conflicting perspectives - environmental, economic and human, as well as financial. Africa, on the other hand has, through its collaborative approach to crisis management, challenged assumptions and brainstormed new approaches to old problems.
The continental response to coronavirus has made clear that it’s not about grand ideas and dogma. It’s about joining efforts in creativity and incremental change under trying circumstances. What’s needed is the ability to make something, not just say something. International development and finance institutions decry weak governance and lack of institutional performance in Africa. But let’s not be facetious. Nowhere in the world are institutions fully formed. In the words of Irene Yuan Sun, “they must be used into existence”.
In the face of coronavirus, the American system, which has always been considered the country with most developed institutions and democratic governance structures, has proven to what degree it can falter and fail when leadership is weak or incompetent. African systems have been able to generate solutions during the coronavirus crisis because they believe in their own ability to interact with their existing systems, however much improvable they may be. They are confident in their ability to produce good outcomes. They have demonstrated an ability and willingness to act on individual, firm-level and institutional innovation to provide practical solutions, instead of hiding behind regulation and drowning in surrealistic procurement systems.
International support for Africa cannot be focused as charity
It’s also time for international finance agencies and international equity investors and venture capitalists to rebel at the notion of bad outcomes arising from intended good deeds. They have to start imagining themselves to be part of Africa’s up-and-coming industrial rebirth. The approach should be to balance social and economic goals through investment and financing not as an emergency, but as an urgency focused on employment generation and the nurturing of domestic markets.
The focus should not be charity, but industry. The strategy should be contextualized development, not distortion of local markets. And health goals should be an integral aspect of support for industrial development. International support needs to bet on the transformational power of the manufacturing industry. Africa not only has God-given resource advantages, both natural and human. It has demonstrated that it can achieve competitive advantages through hard work and determined action.
Africa’s hiding hand
Africa is at an exciting tipping point. Its “hiding hand”, Albert O.Hirshcman’s corollary to Adam Smith’s “invisible hand”, has come forth strong in the face of a health pandemic, accelerating the way the continent engages successfully in problem-solving. While the strongest and richest country in the world, America, stumbles and questions and suffers from a lack of confident leadership and trust in government, Africa has enabled the mental strength of bootstrapping in order to successfully take on the COVID-19 challenge, and Africans have demonstrated their ability to collaborate when the going gets tough. Why? Because there’s a personal willingness of Africans leaders and followers to build a future imagined, come what may.
The continent is at the point of becoming the lead goose in a new flock of flying geese pursuing a more sustainable type of economic development. Success will be based on a basic formula: the strengthening of a local African-style capitalist class combined with the ability to manufacture products efficiently enough and that are good enough. And as exemplified by the initiatives across the continent now, Africa has demonstrated to have an abundance of the basic ingredient need to avoid externally destructive relationships: trust in themselves.
For Africa, quoting a Chinese businessman interviewed by author Irene Yuan Sun, "resilience is not just a noun, it’s a way of life". While America and Europe and China all wallow in their mental swamps and reflect on history lost, Africa is much more clearheaded and is making history.