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Africa rising?

The World Economic Forum and the African growth story (SEF
Blogs)


Recently on May 7
th
2014 the 24
th
World Economic Forum on Africa was concluded
in the capital of Nigeria, Abuja and the theme of this major summit was Forging
inclusive growth, creating jobs. That inclusive growth and job creation are at the
forefront of policymakers and economists minds in Africa is no revelation at all,
considering these two issues have been stifling the Africa Rising narrative for the
past decade. This Africa Rising narrative has its roots in The Economists piece
which pointed out that, over the past decade, 6 of the world's 10 fastest-growing
countries were in Africa. According to a McKinsey report; real GDP in Africa grew
twice as fast in the 2000s as it did in the 1980s and 1990s which were two decades
riveted with conflict and stagnation. Yet, all is not well throughout Africa and a
starting point would be for us to emphasize that contrary to Western media
perceptions; Africa is not a homogenous, monolithic bloc but rather a patchwork of
different countries, ethnicities, languages and religions which all serve to add to
Africas diverse charm.
The main issue affecting African economies has been the failure to create jobs for the
increasing numbers of young people entering the labour force every year. This is
especially frustrating when one takes into account that 70% of Africas population is
under 25 years old meaning African economies have either a Demographic
Dividend on their hands or rather ominously a Demographic Curse with the latter
creating the potential for instability for decades to come. Yet, despite their robust
growth rates African economies have not kept up in regards to job creation and in
particular it can be argued that large bureaucracies and persistent Capitalist
Cronyism and corruption has kept graduates from finding employment in the public
sector. A depressing contemporary example occurred last March in Nigeria whereby
65,000 jobseekers turned up to a 60,000-capacity National Stadium in Abuja to take
a recruitment examination organised by Nigeria's Immigration Service (NIS) with
only 4000 vacancies. Needless to say the ensuing confusion and scramble led to a
deadly stampede with 18 tragically dying. Although this was an extreme example it is
a symptom of Africas overwhelming youth unemployment issue affecting all
countries within the continent, whereby youth unemployment throughout stands at a
staggering 67% - 70% (UNDP, 2011). At the same time, it has been the private sector
that has succeeded in creating jobs, yet even this has been at a gradual and
inconsistent rate. As a result many of these resourceful and determined young people
within African have turned to entrepreneurship as a way to combat unemployment
and poverty. There have been some innovative start-ups created by these young
jobseekers but again the issue that has been stifling their progress has been a lack of
access to loans either from their respective governments or commercial banks. As a
result, sustainable growth can only be achieved when genuine inclusive economic
growth is felt across the spectrum of African economies. This can be done through a
combination of increased government interventions through quotas for young
people, greater infrastructural projects, the elimination of corruption and increased
support in assisting young people to secure loans for entrepreneurship. The
extensive private sector within African economies can also serve to absorb this youth
bulge through the integration of young people within key sectors of the economy, in
particular the innovative sectors such as; Telecommunications where African firms
such as; M-PESA (mobile banking) have become global leaders in their field. In
particular, this focus on inclusive growth is a timely addition as African economies
have been characterised by a high degree of income inequality as of late with the ever
increasing class of the African Elites. This group consists of government officials
and the ever increasing numbers of millionaires who often benefit from state
favouritism in order to secure contracts for major infrastructural projects or to form
a monopoly in a specific sector with tactic government approval. Although there are
many who have gained their wealth in an honest and hard earned manner, it is still
the perception amongst unemployed youth throughout Africa that they are being
short changed and left behind in Africas exceptional economic rise, whereas this new
elite class is gaining centre stage.
To conclude, although African economies face such tangible challenges, Africa still
has the ability to fulfil its substantial promise. Africa as a continent will be able to do
this as long as it ensures that this growth is felt by all and that the unemployed and
unprivileged youth are not ignored within this appealing Africa Rising narrative. I
will end with a quote from the World Economic Forum in Africa summit whereby
Albert Kobina Essien, CEO of Ecobank Transnational stated; Africa has been rising
for a long time. I hope we will eventually get to a point where we have risen.
Bashir Ali Research Analyst at the Somali Economic Forum