Unlocking Africa’s potential

How can Africa unlock its economic potential? This was the key question of the recent 18th World Economic Forum on Africa, which took place in Cape Town and was attended by nearly 900 business, government and civil society leaders from 50 countries. Two themes clearly emerged as crucial for realizing the continent’s potential: the need to improve the quality of political leadership and the need to harness the power of the private sector for development.

Participants agreed that many of the roadblocks to Africa’s development have to do with the tendency of governments to be protectionist, interventionist, and perpetuating over-regulation – often in the name of defending the poor but rarely with the result of improving their lot. Meanwhile, more than 80% of poverty reduction in Africa in the past 30 years is directly attributable to economic growth delivered by the private sector, not governments, and often in spite of harmful policies of those governments.

In order to capitalize on the opportunities ahead, Africa must address the quality of its political institutions precisely because they have a direct impact on economic institutions. Emphasis must also be placed on education as a necessary precondition for having better future leadership – and policies – as well as more capable and competitive workforce. Forum participants concluded:

The private sector is poised to play a growing role to help Africa become more competitive and forge international alliances that extend beyond the customary handouts that have long characterized the region’s relationship with rich countries.

Tony Elumelu, Chief Executive Officer of the United Bank for Africa, Nigeria, added:

“We need to realize that nobody is going to develop Africa except us. To fix Africa we need partnerships. I would like to call on African businesses to build the readiness needed to compete in the world. Externally people will realize that Africa is a good destination for investment and we need to be prepared.”

Now the challenge is to translate these great resolutions into action and change on the ground.