African economies should reform to include more

One of the things rang out during this week’s economic conference of African Ministers of Finance, Planning and Economic Development that that time is fast running out for making the necessary investments that will ensure that Africa reaches the Millennium Development Goals (MDGs). One has to admit that it is not surprising with stubbornness and protectionist polices pursued by African nations economies will continue to be influenced by external forces rather than those from within.

African nations should come to the conclusion unless liberalization takes place and the private sector is given room to maneuver and grow Africa will continue looking towards the help of the west and more recently the East for growth in its economy. Granted that the last few years’ modest growth has been seen with an average of 5 % GDP growth in African nations. Much of the growth has been attributed to China as a rising trading partner as well as smoother loan processing.

As have been witnessed from this week’s ministerial meetings the scaling up of both public and private sector investments are key factors towards generating growth in African economies as well as meeting the MDGs. Although there was agreement on the crucial role of the private sector in accelerating growth, the ministers noted that private investments would not grow substantially without a massive leap in public sector investments. Yes infrastructure is important but at least engaging in reforms towards allowing the private sector more access should be initiated. We should not forget that these two things can go parallel rather than one awaiting the other.

Currently the region records low investment as relatively compared to developing countries in Asia and Latin America. Overcoming investment and saving constraints is major challenge for African policy makers and the way in which it is resolved will to a large extent determines the regions ability to achieve sustained economic growth on the medium to long term.

Creating jobs and improving private sector growth are priorities that Africa cannot afford to leave out. Partnership based on mutual trust and necessity needs to be developed. Africa continues to squander the abundance of stock of knowledge and experience among stakeholders, which if harnessed can assist in the shaping up its economic policies and planning for sustainable development. Being more inclusive through dialogue for collective brainstorming on matters of national concern, particularly on economic management and planning for sustainable development can help us go through the initial stumbling blocks towards development.

Another area, which Africa continues to talk about but yet fails to achieve, is a sustainable inter regional trade. Due to competition among neighboring nations Africa nations have failed to consolidate their markets for the benefit of their people and the region. Hopes rise and fall as initiatives crop up and fail to achieve these goals. More commitment is required to build on this unique opportunity for shared growth.

Another area is to help prevent consumers from being victims of unnecessary price hikes, which sap the saving potential of citizens thus severely exasperating local economies. If we are really sincere in transforming Africa into a market economy we need a transition whereby income levels reach a level where they can withstand and market shifts.

April 9, 2007