2019 CEO AFRICA ROUNDTABLE Kandeh Kolleh Yumkella, Ph.D. United - - PowerPoint PPT Presentation

2019 CEO AFRICA ROUNDTABLE

Kandeh Kolleh Yumkella, Ph.D. United Nations Under-Secretary-General (2013-2015) SRSG & CEO - Sustainable Energy for All (SE4All) Initiative (2013-2015) Director-General - UN Industrial Development Organization (2005 -2013)

ELEPHANT HILLS RESORT VICTORIA FALLS February 13-15, 2019

Africa Rising: Political Leaders make the weather TURNING AFRICAN ECONOMY INTO COMPETITIVE POWER HOUSES

Selected Declarations over 4 Decades

• The Lagos Plan of Action
• The Abuja Treaty
• The Minimum Integration Programme
• The Programme for Infrastructural Development in Africa (PIDA)
• The Comprehensive Africa Agricultural Development

Programme (CAADP)

• The New partnership for Africa’s Development (NEPAD)
• Regional Plans and Programmes and National Plans etc.
• The African Continental Free Trade Area (AfCFTA)
• Several UN resolutions concerning economic development; the

most recent being Resolution A/Res/70/293 proclaiming 2016-2025 as “the Third Industrial Development Decade for Africa (IDDA-III)”.

Africa: Learning From Our Past: The Era of Disease, Disaster and Death

The Coming Anarchy: “How scarcity, crime, overpopulation, tribalism, and disease are rapidly destroying the social fabric of our planet” February 1994, The Atlantic Magazine https://www.theatlantic.com/magazine/archive/1994/02/the-coming- anarchy/304670/

"Does Africa have some inherent factors that keeps it underdeveloped?

Paul Collier, 2007: The Bottom Billion:

“Why the poorest countries are failing and what can be done about it”, Oxford University press”

Dambisa Moyo, 2009: Dead Aid –Why Aid is not working and how There is another way for Africa ? (Penguin Book, 2009).

Collier describes about 60 of the poorest countries

• f the world

He calls AFRICA+ and states: “the countries at the bottom coexist With the 21st century, but their reality is the 14 century: civil war, Plague, ignorance is their reality.

AFRICA: Missed Out on the Greatest Period of Global Prosperity in Human History

• Fastest Growth in the decades
• Global out put increased to $53.3 trillion by

2007

• Global trade increased 133%
• China lifted 500 million people out of poverty
• Poverty increased by 93million
• Ghana 1975

 GDP contracted by 12%  Inflation rose by 30% and 116% by 1977

AFRICA ROW GLOBALIZATION

Constraints on Africa’s Socio-Economic Development

 Ali Mazrui, 1981 – Garden of Eden Syndrome  Jared Diamond, 1977- Geographic Determinism  Paul Collier, 2005 – The Poverty Traps : Conflict being land locked, abundant natural recourses, bad Governance.  Dambisa Moyo, 2007 – Aid Dependency

• Aid represented as much as 90% of net disbursements, 1987 – 1996 for

some countries  Paul Kagame 2007 “ The primary reason (that there is little to show for the more than US$300 billion of aid that has gone to Africa since 1970) is that in the context of post-Second World War geopolitical and strategic rivalries and economic interests, much of the aid was spent creating and sustaining client regimes and one type or the other with minimal regards to developmental outcomes on our continent”. ( Time Magazine, September 2007).

Africa: The Era of Hope and Opportunity A continent of Hope, Opportunity and Transformation (HOT) reflects how I feel about Africa. My BELIEF: Despite its many challenges, I BELIEVE we can transform our continent into a region made up of modern, industrialized, digitized and wealthy economies where people live in dignity and are respected by the rest of the world.

After decades of slow growth, Africa has a real chance to follow in the footsteps of Asia Dec 3rd 2011 Over the past decade six of the world's ten fastest- growing countries were African. In eight of the past ten years, Africa has grown faster than East Asia, including

• Japan. Even allowing for the knock-on effect of the

northern hemisphere's slowdown, the IMF expects Africa to grow by 6% this year and nearly 6% in 2012, about the same as Asia. The commodities boom is partly responsible. In 2000- 08 around a quarter of Africa's growth came from higher revenues from natural resources. Favourable demography is another cause. With fertility rates crashing in Asia and Latin America, half of the increase in population over the next 40 years will be in Africa. But the growth also has a lot to do with the manufacturing and service economies that African countries are beginning to develop. The big question is whether Africa can keep that up if demand for commodities drops. December 2011 http://www.economist.com/node/21541015

Pride in Africa’s achievements should be coupled with the determination to make even faster progress March 2nd 2013 CELEBRATIONS are in order on the poorest continent. Never in the half-century since it won independence from the colonial powers has Africa been in such good shape. Its economy is flourishing. Most countries are at peace. Ever fewer children bear arms and record numbers go to school. Mobile phones are as ubiquitous as they are in India and, in the worst-affected countries, HIV infections have fallen by up to three-quarters. Life expectancy rose by a tenth in the past decade and foreign direct investment has tripled. Consumer spending will almost double in the next ten years; the number of countries with average incomes above $1,000 per person a year will grow from less than half of Africa’s 55 states to three-quarters. http://www.economist.com/news/leaders/21572773- pride-africas-achievements-should-be-coupled- determination-make-even-faster

Boniface Mwangi’s first camera was an old Japanese film model, bought with $220 borrowed from a friend. He’d been selling books at his mother’s roadside stall in Nairobi since he was 15. Then one day in 2003 he came across a biography of Kenyan photographer Mohamed Amin, whose pictures of the 1984 Ethiopian famine, the book implied, led to Band Aid, Live Aid and a new era of global humanitarianism. “That book opened a new world for me,” says Mwangi. “Here was another high school dropout who went on to conquer the world using his camera.” Mwangi set out to do the same. Within months his photographs were being published in Kenya, and in a year he had won a national award for Best New Photographer. His inches-close pictures of the tribal bloodletting that followed a disputed 2007 general-election result in Kenya earned him a slew of awards, a letter from U.S. Secretary of State Hillary Clinton praising his “incredible talent” and a grant from the New York City — based Magnum Foundation. For many, the story of the street hawker who became a world-class photographer seemed to epitomize the notion of an emerging Africa: a giant continent awakening from poverty and disaster, now bursting with hope and opportunity. http://www.alex-perry.com/africa-rising/

The Wall Street Journal calls it “a new gold rush.” – January 12,2011 https://www.wsj.com/articles/SB10001424052748704720804576009 672053184168#project%3DAFRICAMAP0111%26articleTabs%3Dinter active The Financial Times names it “Africa calling” - March 10, 2013 https://www.ft.com/content/8968cbee-7f45-11e2-89ed- 00144feabdc0 A McKinsey Global report dubbed growing African countries “lions on the move,” - http://www.mckinsey.com/global-themes/middle-east- and-africa/lions-on-the-move Forbes magazine - Africa Is Rising Fast, November 9, 2012 https://www.forbes.com/sites/techonomy/2012/11/09/africa-is- rising-fast/#3318db4

The New Narrative – What Changed?

• Improved Political Climate |Macroeconomic Stability |Microeconomic

Reforms We proved that we can liberalize, we could shed the yoke of military juntas, and we can start the process of creating democratic institutions. Some of the harsh lessons learned about fiscal discipline and monetary policy stabilization imposed by structural adjustments Programmes was beginning to pay off. The result was that by 2010:

• Africa's growth acceleration was widespread, with 27 of the 30 largest

economies expanding more rapidly after 2000

• total foreign capital flows rose from $15 billion in 2000 to a peak of $87

billion by 2007,

• the rate of return on foreign investment was higher in Africa than any
• ther developing region
• we witnessed the rise of the African urban consumer; for example by

2010, 40 per cent of Africans lived in urban areas, a portion close to China's.

“(Africa) hangs in the balance, They’ve certainly been left behind in that they are the poorest continent, even though they’ve had a good 20 years by many measures. It hangs in the balance of how much catch-up will do it-they could also fall further behind. Africa is unique in that it still has significant population growth….These babies are (being) born in the toughest places in the world.” (Gates interview with Paul Schemm, 11/2/2019).

Manufacturing Performance Africa’s manufacturing sector is small and losing market share with the continents -share, including North Africa, of global MVA declining to 4 percent in 2014 from 9 percent in1990 (UNIDO, 2016). The absolute value of MVA in SSA increased from$85 billion in1990 to $166 billion in 2017 (current US$) somewhat larger than Turkey($149 billion) but smaller than Spain ($171 billion) and Mexico ($197 billion). Two countries -South Africa($52.5 billion) and Nigeria ($42 billion) accounted for 57 percent , while another eleven contributed 25 percent The remaining 35 states accounted for just 18 percent , underlining the substantial cross-country disparities in the level of industrial development (world Bank, 2018).

4th Industrial Revolution: (Industry 4.0) "a fusion of technologies that is blurring the lines between the physical, digital, and biological spheres......expanding the possibilities of billions of people connected by mobile devices, with unprecedented processing power, storage capacity, and access to knowledge, are unlimited. And these possibilities will be multiplied by emerging technology breakthroughs in fields such as artificial intelligence, robotics, the Internet of Things, autonomous vehicles, 3-D printing, nanotechnology, biotechnology, materials science, energy storage, and quantum computing.” (World Economic Forum).

• Fastest growing region: 3 -4.5 percent 2008-2012
• In 2018 six of the world’s ten fastest growing economies where

is SSA Ghana, Ethiopia, Cote D'ivoire, Djibouti, Senegal and Tanzania ( Oxford Policy Management,2018)

• SSA Economy almost doubled from 2000 -2013 to $2.7 trillion
• SSA economy is expected to quadruple by 2040
• In 2014 Africa received $87 billion in capital investments – a 65%

increase over 2013; 2018 FDI 40 Billion ( $1.2 trillion globally)

• Rising incomes and a growing middle class (400-500 million

people)

• Rise of the African urban consumer – 40% lived in urban areas
• Rising demand for cars
• Over 400-500 million mobile connections

Hope and Opportunity

Projections for 2020, 2030 and 2050

• Population growth: 1-3 billion by 2030, 2.2

billion by 2050

• iGDP growth – 1% in 2013 to 5-10% by 2025 (or

300 billion of total GDP

• Manufacturing growth – 4 industries could

generate $2.6 trillion in revenue by 2020 (consumer facing industries, agriculture, resources and infrastructure)

• Tourism
• Energy demand growth by 75%

HOPE AND OPPORTUNITY CONTD

Demographic Dividend

By 2050 -2.2 Billion Africans Half of them below 30 years 29% of the world’s population age 15-24 years Over 400 million in the middle class 128 million Households with discretionary Income by 2020 Top eighteen cities could hare combined spend of USD 1.3 trillion Low Dependency Ratio Rapid investment in shopping malls: by 2012 Shoprite:- Over sixteen countries Massmart:- In fourteen countries Woolworths:- In fourteen countries

Suggestions for Zimbabwe

• 1. Predictable and stable macro economic managements.

A first step towards greater inclusivity is formal job creation, which in turn means a competitive exchange rate, since export industries, and especially manufacturing, will not create jobs unless they are more competitive.

• 2. Zimbabwe is a laggard in terms of global competitiveness,

ranked 128 out of 140 countries by the World Economic Forum in 2018. Lower the cost of doing business.

• 3. There is no case, so far as I know, of a country re-

industrializing with an overvalued exchange rate, which is why returning to a market-determined rate is critical.

…Suggestions for Zimbabwe

• 3. As the WEF report says, poor performance in Zimbabwe and other Sub-

Saharan economies is the inability to leverage new opportunities offered by modern technologies. Are there new growth areas that will make Zimbabwe a service providing hub for SADC and the world as part of regionals and global value chains?.

• 4. Revamp education system. While ICT education has grown strongly, there

are severe shortages of technical skills, especially those linked to 4th industrial revolution industry. Zimbabwe as tech-Hub for software, high=tech components tec.

• 5. National dialogue about the Zimbabwean Identity and Where you want to

be 5-10 years. Politics should not always trump economics.

Conclusions

1.Manage demographic transitions well and capitalize on our cheap Labour resources to gain a competitive edge. Enhancing skills, capabilities and innovation systems. The overriding challenge for Africa to succeed in the New Industrial Era will be a significant upgrading of digital skills, capabilities and innovations systems. This will involve upgrading and re-skilling of the labour force engaged in the new technologies, especially tertiary education, and training of a critical mass of expertise in the new technologies. 2.Direct and sustained support to industrialization and agribusiness development as a means of diversifying our economies. This has to be backed by stable, predictable macro-economic management.

• 3. Invest in energy transitions and infrastructure development to

reduce the cost of doing business and enhance systemic competitiveness of all productive sectors.

• 4. Enhance good governance and move to a developmental state

with a clear vision to deliver greater human development. Enhanced governance requires better adaptive capabilities and skills of policy makers to conceptualize, formulate, implement, audit and monitor industrial policy interventions in a transparent and accountable manner.

• 5. Build Climate resilience In all public investments and growth

strategies and ensure environmental sustainability over the long run.

…Conclusions

ALIGN 4 Ps

POLITICS

POLICY PRICING PARTNERSHIPS