Columnists

Address poverty of innovation to chart Africa growth path

africa-innovation
Benine

Summary

  • Africa has been described as the youngest continent owing to its big youthful population.
  • Anyone giving a realistic prognosis of Africa's future right now is not likely to be very optimistic.
  • The debt crisis has taken away money that could be invested in agribusiness, a sector that has the potential to create thousands of jobs every year.

Anyone giving a realistic prognosis of Africa's future right now is not likely to be very optimistic.

The continent, quite ironically, is teeming with opportunity and low-hanging fruits. Every opportunity, however, has to be harvested and properly invested for it to benefit the people. For now, these very opportunities also happen to be Africa’s biggest Achilles heel.

Africa has been described as the youngest continent owing to its big youthful population. It is estimated that 60 percent of its population is below 25. These young people are energetic and ambitious and many of them have talents and skills only waiting to be tapped.

But with runaway unemployment rates that show no sign of getting better, we are going to end up with millions of restless and jobless young people who will be ready fodder for rabble-rousing politicians and ready recruits by shadowy organisations including proscribed ones.

It will be interesting to watch how these youth movements unfold around the continent and how governments will manage them. What must worry any government is that things will likely get worse before they get better. Here's why.

Whereas the continent is resource-rich, it suffers a poverty of innovation. It lacks the technology to profitably extract and create value out of its own resources.

For example, the DRC with its vast mineral wealth is known more for conflict than its rich deposits of diamonds and cobalt.

The other challenge that complicates Africa’s recovery is the debt crisis. From west to east to south, African countries went for big loans, mostly from China. They used the money to build big infrastructure projects such as railways, seaports, airports, highways and also to modernise cities.

All was well until it was time to pay back and the countries' treasuries realised the mammoth projects had not been impacting the economy. While tax revenues remained more or less static, there was a loan and interest to pay.

Some countries have found themselves in dicey situations where 60 percent or more of the domestic revenue goes to debt servicing only to run back to the lender for more loans to plug the budget deficit. It is a cul-de-sac of sorts and will require painful choices to maneuver out.

The debt crisis has taken away money that could be invested in agribusiness, a sector that has the potential to create thousands of jobs every year.

Financial institutions, particularly banks, no longer see the need to lend to small businesses. They have a very reliable borrower in government. As a result, credit that could be extended to small enterprises has virtually diminished.

It used to be that people would leave the countryside to find white and blue-collar jobs. What we are going to witness is a migration of survival.

Covid-19 has given us a taste of what happens when opportunities in urban areas dry up.

Faced with homelessness in cities, people will return to the villages where they will meet an agricultural sector that is under resourced and reeling under the effects of climate change.