Africa is ready for transformation
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Africa is ready for transformation

Africa is ready for transformation

The ECA publishes hundreds of reports a year, but how effective are they and how wide is their reach or, as many claim, do they simply gather dust in the archives? Lopes joined the UN in 1988. He has taught in universities and has published around 20 books. Interview by Hichem Ben Yaïche

You are part of an institution designed to help Africa. What are your priorities?
We must become the continent’s ‘suggestion box’. To do that, we have to specialise. It’s a small revolution. From now on, people who deal with statistics don’t deal only with statistics; those who do research don’t do only research, etc. There will be greater density and, consequently, better quality.

We have been able therefore to measure the progress made. We are in the centre of the big discussions on the African economy. For example, we are changing the foundation of the debate on industrialisation or on regional integration.

We are also bringing new ideas about trade to the table. All this is part of a new discourse: that of the continent’s affirmation, which no longer accepts the relations that existed before, and which is now based on new partnerships that offer a lot more choice.

This discourse is also for internal use: to show Africans that the continent is growing, although not growing enough. When you say, ‘there is growth’, it is not necessarily the sign of a structural transformation, because things are going along exactly as before – that is to say that Africa exports its raw materials without added value.

So how do you change that?
By emphasising structural transformation. Transformation is the key word. It’s about changing the composition of each country’s GDP. Currently, most of the workforce is in agriculture, where rates of return are very low and serious poverty persists. In Africa, more than 60% of people in poverty come from the primary sector.

We are confronted with a major structural problem. Over 50% of Africans will live in the largest cities in the next 15 years. But we don’t have the ability to absorb this workforce, which will be younger and more educated, more connected and more urbanised. Which is where the need for a structural transformation to create modern jobs comes from.

Specifically, we can invest in agribusiness to generate much higher returns in the agricultural sector. Industrialisation allows us to created added value. Labour costs in South-East Asia are rising quickly and, therefore, part of their production should migrate towards Africa.

Does Africa have the human capacity and skills to make this transition towards an industrialisation phase?
All the conditions are ripe for Africa to take off. Let’s start with human capital: education, technical abilities, etc. We see that current education levels are the same as those of Southeast Asia when its economy began to take off. So we are well equipped to welcome the same kind of industries. For example, in Kenya, Nigeria or in Ethiopia, the big multinationals are coming over because they can develop technical skills through on-the-job training, that is to say, with provisions integrated into the investment itself.

Regarding infrastructure, Africa is reaching a considerable level of investment – $64bn a year. Yet we need to double this figure to meet requirements. Investment funds are discovering that we have a higher growth rate than elsewhere. On the other hand, if we look at the risks more carefully, we will see that they are not all that different to those in Asia or elsewhere. So, yes, it’s definitely worth investing in Africa!

How can we speed up growth?
We need a favourable macroeconomic framework notably by mastering inflation. Average inflation in Africa will be 6% this year. A remarkable performance compared to the situation a few years ago.
At the same time, we lose some $50bn to capital smuggling. In this respect, we can take measures to recoup, at least half of this amount.

On the other hand, development aid has become less than the flow of migrants. Consequently, we have assets to solve the financing problem. For example, AfDB has just created a mechanism for investment in the continent’s infrastructure, Africa50.

Today, Central Banks have $500bn available as part of their reserves, going towards Eurobonds or towards US Treasury bonds as these are the only ones rated AAA. We do not yet have a specific African financial instrument allowing us to put money into an AAA mechanism, which is necessary to be able to guarantee that the reserves are classed as such by the IMF.

The issue of financing is not only a story of availability. We have to adapt to the requirements and the sophistication of the financial markets.

How do we tackle the glaring income inequalities which are leading to instability?
Africans have created a Peer Assessment mechanism, which allows detailed analyses of each country’s situation. Indeed, this is a great African innovation as these are not recommendations given by donor countries, these are the acquis of good governance set up by the Africans themselves.

They have come to this conclusion: the continent’s number-one problem is the lack of respect for diversity – cultural diversity, ethnic diversity, racial diversity, etc. That means that Africans are collectively aware that their system of government does not meet this need: the need to accept a plural Africa.

From this observation, it is not really a surprise to witness problems, conflicts in a part of the Sahel or in the Great Lakes region or indeed in the Horn of Africa.

But that said, when we compare Africa’s situation with Asia or Latin America, the outside world doesn’t take the same view, same perception or make the same assessment. Yet the number of Africans affected by conflicts is approaching 100m out of 1bn people. In India alone, between what is happening in Kashmir and the eastern provinces, 200m people are affected by conflict! Another example: more people die from homicide in the state of Rio de Janeiro than in Sudan.

You hope to institute a ‘suggestion box’ for Africa. How will you make sure that these ideas are translated into actions?
We’re doing it. I will give you a few specific examples. During the 50th anniversary of the AU, we organised a three-hour interactive debate with heads of state, without any speeches. I can no longer count the number of meetings we have had on this level – ministers and heads of state – where I have been called in, in the name of the ECA, to play the role of an idea catalyst. We speak positively about Africa’s development opportunities. We don’t forget about the problems, but from the outset we put them in the context of opportunities.

Are your ideas starting to materialise?
We have a strategic partnership with the AU Commission and the AfDB. We have a joint secretariat. Currently, with the preparation of Agenda 2063, we are drafting a visionary document about the Africa of tomorrow.

We tackle practical subjects, like the investment programme, infrastructure, industrialisation, trade negotiations, climate change, demographics, etc. Our ideas won’t move forward if they aren’t supported by African leaders. We are technical agents: we help and we provide all the information and analyses needed for decision making.

So, no more wasted energy between the AU, AfDB and the ECA then?
Exactly! Everyone plays their role. I must say that between these three organisations, hard work and team spirit are extremely strong.

We use our common experience of multilateralism to increase our resources. A large number of flagship initiatives interest donors, they are innovative and different. We have created a centre for mining issues, which is part of these AU and AfDB joint activities. We are also working together on issues of gender, climate and trade. For example, on climate change, we have the approval of heads of state for a broad programme called ClimDev-Africa (The Climate for Development in Africa).

It’s a green fund managed by the AfDB for investments in the field of climate change. The AU leads the Coordination Unit for climate policies. And the ECA thinks up new ideas, helps negotiators, etc. It’s easy to see the complementary strategy between the three organisations.

You have brought about a ‘cultural shock’ within your institution. Don’t you bump into some resistance?
Attitudes change. Africans are living through a turning point. They must be optimistic and very positive about their future, but not with the policies that some are trying to ‘sell’ us.

It’s not because economic growth is at the point where we are going to build the Africa of tomorrow by itself. This step will only be possible through transformation, industrialisation and services.

The large consulting companies tell us that Africa is today ‘a land of opportunity’. It’s true, but it’s always been the case! Is it a land of opportunity for Africans? Experts mainly look at investment, the opportunities to increase market share. They advise the large multinationals and all their clients: ‘Invest more, there are opportunities here and there.’ We are not against that, but we tell Africans: ‘That’s not our discourse. Our discourse is one of transformation. Opportunities can come and go.’

In that respect, in the 1970s we lived through growth comparable to that of today. And what did we get out of it? Nothing! We soon had oil shocks, the first, then the second. The Structural Adjustment Programme levelled everything that we had obtained in the 1970s.

Consequently, though, today, we are not getting ready for a completely different Africa, and we risk regretting that bitterly. Not to have seized the moment for a real transformation. Therein lies the ‘cultural shock’: changing attitudes!

In your approach you seem to apply the maxim ‘Think global, act local’. Where does the inspiration for your day-to-day actions come from?
My main inspiration comes from the fact that Africans have lived through the post-independence period – over 50 years – wanting to give priority to the political integration of the continent via Pan-Africanism.
What have they achieved? The independence of all countries, the end of apartheid, and the creation of the African Union… That is to say, the transformation of the OAU into the AU, with a more economic and less political nature. That’s the achievement that inspires my thinking.

When we look closely at the goals set by the founding fathers, all of them have been reached. I am encouraged by this example, in order to build the same thing in the field of economic transformation.

We live at a time when Africa has the potential to be one of the motors of world development, if we really do what’s necessary from a strategic point of view. We Africans must no longer be satisfied with development aid. We must make ourselves into a player in the economy. That is the cultural shock and my inspiration.

How can we go further?
As an intellectual interested in the fundamental issues, I would like to discuss regional integration more. We are developing an instrument to allow us to measure each country’s level of integration. This is the ‘Regional Integration Index’. We plan to launch it by the end of the year.

It will measure the real promoters of integration. That is to say, the number of days that people spend in a customs area, the number of days that an African waits to get a visa in another African country, the number of air and land transport connections, the number of road sections that link one country to another, the number of banking and financial transactions, etc. Objective things! And, of course, the Index does not leave ‘traditional’ criteria to one side: formal and informal trade. The Index allows us to rank the countries in terms of integration into the continent.

Africa needs major growth centres connected to each other by infrastructure serving as powerful engines to promote the development of the continent’s 54 countries.

Another example: in the past decade, African countries have approved a dozen economic reference frameworks for mines, infrastructure, agriculture, land and land tenure.

All of these reference frameworks propose resolutions each time an AU summit is held, to strengthen what has already been approved. But, fundamentally, we see that there is very little happening.

In reality, Africans need to measure all these reference frameworks in a system similar to the Millennium Goals. Heads of state have just approved the idea of ‘African Development Goals’, which will be the subject of an annual report, prepared under the auspices of the AU with the AfDB and the Commission’s support. It will allow us to take stock each year of the reference frameworks.

It’s very simple, but this information will be a game changer! All that could make the difference to change the economic and political players’ level of commitment as well as the perception of the changes taking place in the continent!

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Written by African Business Magazine

African Business and its award-winning team is widely respected for its editorial excellence. We provide the all important tools enabling you to maintain a critical edge in a continent that is changing the world. Our special reports profile a wide range of sectors and industries including Energy, Oil and Gas, Aviation, Agriculture to name but a few.

  • Daniel Obi

    The article reminded me of an inspiring quote by Oprah Winfrey “Transformation happens when you dare to be awakened to greater heights”. Truly, Africa is turning out to be the hub of colourfully changing the economic conditions for the better. No wonder there are so many support oragnisations backing entrepreneurial projects.

    One such example is the TEEP. The Tony Elumelu Foundation Entrepreneurship Programme (TEEP) has devised an annual programme to empower aspiring entrepreneurs and to equip them with the essential skills required to launch and operate their businesses at the early stage of their growth.
    Founder Tony O. Elumelu CON, has pledged a sum of $100 million for African entrepreneurs through TEEP, and the programme is open to the citizens and legal residents of all the 54 countries in Africa. TEEP aims to empower 10,000 African start-ups with transformative ideas and businesses over the next decade, and will also provide them with a platform for mentorship and much-needed seed capital funding.
    For more details on the programme and to enroll, visit http://bit.ly/18YWJKh

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