The current slump in world commodity prices is forcing Africa to rethink its traditional dependence on raw material exports. Having always relied heavily on the extractives sector, the time has come for the African economies most dependent on this trade to consider the transition from the extractives culture to the learning culture for profitability.
The International Monetary Fund (IMF) has projected that the continent will grow by 3% in 2016. This is a disappointing half of what the average growth over the last ten years has trended, and the lowest rate in the past 15 years.
Problems plaguing international policy on the matter is still heavily leaning towards the issue of transparency in the extractives industries. There must be accountability and responsibility when dealing with the operations of multinational corporations, which in turn will improve the use of revenue from exports.
Thusly, the extractives industry has gone largely unchecked and made revenue accountability a difficult thing to procure from the countries leading the pack.
Lamentation is not enough. Neither is the magical thinking that the downturn in the commodity boom and consumer-driven growth will automatically lead to diversification. This can only be achieved through practical efforts to focus on creating learning economies driven by technological innovation.
More and more, the unions of Africa such as the AU and the New Partnership for Africa’s Development Agency are catching on to the call to shift positions and offer investments to areas in education. One such example is the collaboration in building executive capacity among African ministers through the Technology, Innovation and Entrepreneurship Programme funded by the Schooner Foundation.
The plan is a solid one, but the implementation will be the key to success.It will be imperative for all nations in Africa to be dedicated to the procedures of implementation and zealous in the attitude to uphold the mission.
We must not simply shift to another sector and hope that diversification will occur automatically. An example of this is the description of Nigeria’s emphasis on agriculture as the country’s “new oil.” As noted by former President Olusegun Obasanjo, agriculture can be more than the “new oil”:
Eventually, the day will come when the oil reserves dry up. But sub-Saharan Africa will always have its fertile land, rivers, and with so many coastal ports surrounding the lush continent, will always have economic access to marine and seafaring trade.
African nations are not too late to join the race, however. The world is full of inspirational examples we can learn from. The fact of the matter is many of the countries that have recently transitioned to being learning economies started off with a lot less resources (finance and research facilities) than the majority of African countries have today.
Take the case of Taiwan. In the early 1960s, the country’s main export was mushrooms, of which it was a world leader. The prospects of industrial learning were quite limited when dealing with a high-volume, low-value and perishable export commodity. It transitioned to becoming a semiconductor powerhouse by redefining itself as a learning economy.
Taiwan’s premier research centre, the Industrial Technology Research Institute that spawned many of its leading semiconductor firms, was created by consolidating four dilapidated research centres left behind by Japanese occupiers. The institute was not created to add value to mushrooms but was part of the country’s policy reinvention as a learning economy.
Unlike its ancestors, Africa has access to a much wider range of technologies that can serve as platforms for industrial learning. These are broad in range and cover a multiform of fields such as digital technologies, genetics, synthetic biology and new materials. Harnessing them requires building among the youth a culture of innovation that is driven by learning and not extraction.