Inclusive job-creating growth strategies should drive Africa’s prosperity — WEF

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By OMOH GABRIEL, Business Editor

The just-concluded World Economic Forum on Africa held in Abuja has identified key drivers that will usher in prosperity in Africa. Participants at the three-day event which practically shut down Abuja said that Africa’s prosperity can only be driven by inclusive growth strategies that create jobs and include all Africans.

AfricaThis is coming on the heels of massive youth unemployment on the continent. As at 2013 according to Wikipedia, unemployment figures in Algeria was 10.2 per cent, Chad —22.6 per cent, Egypt— 8.7 per cent, Kenya —42 per cent, Mali— 30 per cent, South Africa— 25 per cent, Nigeria— about 22 per cent and Zimbabwe, 70 per cent.

Panelists at the opening plenary of the 24th World Economic Forum on Africa agreed that the opportunities are enormous, but many countries still need a conducive business environment, infrastructure and the right skills. President Goodluck Jonathan told participants that the need to create jobs is a global problem.

In Africa, the unemployment problem is compounded by its youthful population and pending demographic transition. “An additional 112 million workers will enter Africa’s labour force by 2020 … this is daunting and should be a wake-up call to all of us in Africa to work harder on job creation with a great sense of urgency,” he said.

Job creation is the main focus of Nigeria’s Transformation Agenda, the nation’s plan to modernize and diversify the Nigerian economy by focusing on priority sectors such as agriculture, manufacturing, housing and construction, and the services sectors.

“We are working to unlock the obstacles faced by businesses so they can create jobs,” Jonathan added. “We must ensure there is a maximum inclusiveness through creating opportunities for people to create opportunities for themselves.”

In a special address, Keqiang, Premier of the People’s Republic of China, pledged continuing cooperation and will to prioritize infrastructure development. “We will work with Africa to upgrade and build transport infrastructure to promote connectivity on the African continent.” This includes a high-speed railway, a network of expressways and an aviation network.

China also plans to “vigorously advance” the African Talents Program, providing 18,000 scholarships to African students and training 30,000 African professionals. Training schemes will also be offered by China’s enterprises and Confucius Institutes in Africa.

“China will step up its investment and financing cooperation with Africa by providing an additional $10 billion in credit to make its pledged credit line a total of $30 billion,” Li said.

“We will add another $2 billion to make the China-Africa Development Fund a total of $5 billion.” The Chinese government will also provide Africa with $10 million to protect its wildlife and biodiversity and promote sustainable development across the continent.

Africa’s corporate environment is conducive to doing business, argued richest man in Africa, Dangote, President and Chief Executive Officer, Dangote Group, Nigeria; Co-Chair of the World Economic Forum on Africa. “People talk only about the bad side, but there are lots of opportunities,” he said.

Dangote added that Nigeria and many other countries create opportunities for capital allowance, zero duty and value-added tax on machinery, as well as tax holidays. His company took the risk of investing in Nigeria. “The biggest challenge today is that some Africans would rather keep money abroad. You are not creating confidence. You must invest your own money to encourage foreign investors.”

Rwanda has flourished by encouraging the private sector to “do what they know best” but, at the same time, make a difference in people’s lives, said Kagame, President of Rwanda. “You can get impressive growth rates by a few companies, but it is not a zero-sum game where people grow at the expense of others. Policies to encourage inclusive growth and create jobs must be driven by political will.”

Rwanda invested in universal healthcare, education and vocational and technical training. Investments in agriculture, for example, have lifted one million people out of poverty.

Creating sustainable and inclusive growth and jobs is a “complicated transfer function”, said Rice, Vice-Chairman, GE, Hong Kong SAR; Co-Chair of the World Economic Forum on Africa.

“It starts with electricity, healthcare and clean water. Without this, you don’t have the human capital you need to develop jobs.” GE is investing in sophisticated machinery and manufacturing facilities, with local content for its supply chains.

However, in many countries, the fundamental building blocks are missing. “If you put those missing fundamentals in place, you will have investors to build power and manufacturers that want to grow with the country,” Rice concluded.

Huge opportunities exist to create jobs in agri-business, healthcare and infrastructure, according to Barton, Global Managing Director, McKinsey & Company, United Kingdom; Co-Chair of the World Economic Forum on Africa. Creating jobs for 120 million people over the next 10 years is a huge opportunity. “We need more vocational training; we need welders, plumbers and nurses,” he said. “We need education for employment.”

Winifred Byanyima, Executive Director, Oxfam International, United Kingdom, agreed that “growth is good”, but many are being left behind. She reminded participants that 60 per cent of Africans are living below the poverty line. She said that, according to Oxfam, Africa is the second most unequal continent in the world next to Latin America, and six out of 10 of the most unequal countries are in Africa.

“This inequality is widening,” she said. Byanyima said there cannot be more of a conducive business environment than Africa. “Business is making money and paying almost nothing for it. It’s time business paid its fair share so money can go back where it’s needed,” she said.

During the forum, President Goodluck Ebele Jonathan, together with Nigerian private sector leaders and with support from the World Economic Forum’s Partnering Against Corruption Initiative (PACI), announced the launch of the Clean Business Practice Initiative (CBPI), dedicated to battling corporate corruption in Nigeria.

The CBPI, first adopted in June 2013 by Nigeria’s Honorary International Investors Council, is a private sector-driven anti-corruption initiative to complement government’s efforts in fighting corruption in Nigeria. By committing to develop and implement anti-corruption practices in institutions, systems and processes, the initiative aims to help level the playing field in trade, commerce and industry.

President Jonathan noted that he was delighted to hear of this private sector initiative – which he believes will both complement and strengthen the government’s resolve to fight corruption – to which he pledged to give his full support.

“The private sector acting alone cannot win the fight against corruption in Nigeria,” commented Emmanuel Ijewere, the Coordinator of CBPI. “Effective collaboration between the private sector and government is a critical enabler to our future success,” he said.

“We believe the CPBI model will encourage more collective action and business-government partnerships, especially in important sectors for growth and development such as energy, infrastructure and ICT,” said Elaine K. Dezenski, Senior Director and Head of the Partnering Against Corruption Initiative at the World Economic Forum.

“These efforts are best when driven locally, together with support from the global business community,” she added. Through PACI, the World Economic Forum has worked for more than a decade to catalyse anti-corruption collective action initiatives and best practices, and support the work of leading CEOs and their organisations who have committed to the PACI Principles of zero-tolerance against all forms of corruption.

PACI recently launched its Vanguard community, a group of 25 CEOs and chairpersons who are committed to designing corruption out of the system. The PACI Vanguard is chaired by David T. Seaton, Chairman and Chief Executive Officer, Fluor Corporation, USA.

The CBPI board consists of representatives from the private sector, civil society and media. They are: Apampa, co-Founder, Convention on Business Integrity; Aigbogun, Editor-in-Chief, Business Day; Olubunmi Jagun, Chief Compliance Officer and Company Secretary, Oando; Chukwuma, Representative, West Africa, Ford Foundation; Olorunyomi, Managing Director, Premium Times; Candide-Johnson, Senior Partner, Strachan Partners; Anselm Odinkalu, Director, Africa Program, Open Society Justice Initiative; Uwais, Principal Partner, Wali Uwais & Co.; Ahmed Director, Stakeholder, Relations and Corporate Communications, Dangote Group; and Mordi, Chief Executive Officer, National Competitiveness Council of Nigeria.

Africa is facing significant security threats and experiencing high levels of violence and human rights abuses, said panelists at the World Economic Forum on Africa, taking place for the first time in Nigeria. In particular, women, children and civilians are being used as instruments of war and shocking testimonies are coming out of conflict zones.

A lack of respect for human life was identified as a fundamental problem that is leading to increased violence. This is being compounded by the commercialization and erosion of traditional practices that once stabilized communities, but are now contributing to human rights abuses, particularly of women.

According toBelay, Africa Director, Research and Advocacy, Amnesty International, South Africa, “Freedom of expression is an African right. We need to push our African leaders to speak out about transgressions committed by their fellow leaders.”

Poverty, inequality and lack of inclusion were also identified as key contributors to increasing conflict and radicalisation as they create pockets of fragility that can be easily exploited. Musisi, Regional Director, UN Women East and Southern Africa, Kenya, concurred: “Rapid growth that is not inclusive is irresponsible growth and it is not sustainable.”

Samura Matthew Wilson Kamara, Minister of Foreign Affairs and International Cooperation of Sierra Leone, said governments, particularly in post-conflict states, have a difficult time trying to balance the needs of investors in the resources sector and the communities that are affected by the exploitation of those resources.

Countries need investment to grow, but it is crucial to ensure that the growth is inclusive to avoid building up social tensions that present potential areas of future conflict. “You need growth with a human face,” said Kamara.

The Global Agenda Councils on New Models for Travel & Tourism and Africa, represented by Donald Kaberuka from the African Development Bank and Kathleen Matthews from Marriott International, have agreed to collaborate on promoting a regional integration strategy through the facilitation of travel and talent mobility in the region using, among others, a common visa for regional blocs across the African continent.

The strategy will enable national, regional and international travellers and students to travel more freely and in a more secure way.

The Call to Action on Travel Facilitation & Talent Mobility – signed by President Paul Kagame of Rwanda, President Uhuru Kenyatta of Kenya and Prime Minister Moussa Mara of Mali– recognises the importance of travel facilitation and talent mobility as drivers to integrate and develop the region.

The call to action urges all African States to work together towards the establishment of joint policies and the removal of barriers to facilitate the movement of business travellers, students and tourists with the objective of improving social and economic development on the continent.

“We are pleased that the Letter of Intent on Travel Facilitation & Talent Mobility was signed,” said Thea Chiesa, Director, Head of the Aviation and Travel Industry at the World Economic Forum.

“Facilitating travel to stimulate economic growth and job creation relates strongly to the theme of this year’s World Economic Forum on Africa.” She added that it is also a core activity of the forum’s Industry Partners and members of the Global Agenda Council on Africa and the Global Agenda Council on New Models for Travel & Tourism.

 

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