Africa's Path to Prosperity
09/2018 - New (digital) technologies raise hope in African countries for economic growth, leapfrogging and for lifting millions out of poverty. Recalling the basics of development economics – any development requires structural reform – and looking at countries that have successfully emerged from poverty suggests a digital revolution will hardly do the trick alone.
A few African countries recently saw the emergence of a vibrant digital economy driven by a new generation of well-educated entrepreneurs: Tech hubs are spreading in places like Lagos, Nairobi or Addis Ababa. Many of them want to follow the successful path of telecom giant Safaricom that provides millions of poor people with access to communication, information and financial services – through the mobile payment system M-PESA – and is at last fueling widespread entrepreneurial activity. Today, Safaricom is proof of the development impact new technologies can have in low income countries.
International institutions, consultancies and tech firms like SAP, IBM or Microsoft all agree: a digital transformation is on its way in Africa along with a unique opportunity for the continent to leapfrog arduous steps on the ladder to prosperity. While there is little doubt that digital technology will accelerate development, it alone will fail to provide the very basics for inclusive economic growth across Africa: formal and productive jobs for a working age population that is growing by 20 million a year to over 600 million in 2030. Nowadays, the majority still works in the informal economy or on family farms, and is considerably poor with little or no access to quality education.
Let‘s look at Mangos from Mali: by focusing on its comparative advantage – the labour intensive agricultural sector –, the landlocked country multiplied its exports of the tropical fruit to the European Union by 600 percent within a decade, allowing millions of farmers to increase their incomes. Or at Ethiopia that targets the light industry sectors – particularly leather, textile and agriculture – that require a large workforce with low qualification and is generating hundreds of thousands of jobs. While oldfashioned structural reforms do not seem as attractive as leapfrogging, history proves their success – in China or Indonesia for instance. And it is their advancement to middle income countries – going along with rising factor costs of production – that in fact opens new opportunities for African countries to fill in the blank and become the new extended workbench of the world. International investment could be increased by special economic zones – once China‘s winning formula – that provide for favorable business environments. H&M, Tommy Hilfiger, Timberland or Tchibo for instance are already producing fashion „made in Ethiopia“ in one of the country‘s 16 industrial parks.
Investing in digital technologies will be crucial for African countries to stay on track and will help leapfrogging in some sectors. For longterm sustainable economic development fundamental reforms towards building a solid industry will have to go along with it. The corporAID Multilogue will discuss how Africa‘s path to prosperity can look like, what the international community can do to support it and how companies from different regions – like Asia, Africa or Europe – can support sustainable economic growth and drive progress.
TIME & PLACE:
Tuesday, 27th November 2018 | 6 to 8 p.m.
OeKB Reitersaal, Strauchgasse 3, 1010 Vienna
Jesus Crespo-Cuaresma | Vienna University of Business and Economics
Judith Helfmann-Hundack | German–African Business Association
Nella Hengstler | Regional Director Africa/Middle East, Advantage Austria
Christopher Maclay | Head of Growth Lynk Kenya
Efosa Ojomo | Research Fellow Clayton Christensen Institute
Hans Stoisser | Peter Drucker Society Europe Associate
Martin Treml | Regional Director VAMED
This event is launched in cooperation with the Drucker Forum Society
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