Financial Sector Can Help Bolster Africa's Economy, Panelists Say

28 January 2014

The New York Times

One of the stated aims of this year's World Economic Forum is inclusion. A panel discussion on Africa's future, one that included two sitting presidents from that continent, did its best to emphasize that theme.
 
In a discussion on what the Africa of 2050 might look like, a number of participants took on the issue in different ways. Several on the panel, including practicing businessmen, argued that opening and supporting more foreign investment would naturally trickle down to the populace.

Perhaps the most staunch supporter of the view was Aliko Dangote, the Nigerian-born billionaire who controls an enormous commodities empire on the continent. For him, economic advancements like a continentwide common market would only help, as would helping industries like sugar take root.
 
"Africa could have a G.D.P. of $9 trillion," Mr. Dangote said. He later added, "That would be more than China," whose gross domestic product in 2012 totaled $8.2 trillion.
 
Julian Roberts, chief executive of the insurance firm Old Mutual, concurred. Building up, say the financial sector, in Africa would mean not only hiring more Africans, but bringing in experts who could then teach the local populations. Governments should do their best to continue encouraging that.
 
"Africa cannot succeed without a real handshake between private enterprise and the public sector," he said.
 
Both sitting presidents on the panel, Goodluck Jonathan of Nigeria and John Dramani Mahama of Ghana, agreed, arguing that building out their natio ns' economies was a primary goal and a longstanding source of work.

But the panel featured an ardent advocate for more active efforts to foster economic and social inclusion: Winnie Byanyima, executive director of the nonprofit Oxfam. To her, Africa's growing river of foreign investment has not always nourished widespread prosperity.
 
"What we're seeing is a concentration of wealth and power that is excluding, locking out millions of people," she said. "What I see is a race to the bottom."

Ms. Byanyima added that social and economic exclusion had promoted social instability, helping foster troubles like terrorism.
 


"Unless we address this question of inclusion," she said, "I'm afraid insecurity will continue to rise."
 


It is a theme that has emerged at the World Economic Forum from the start this year, most notab ly in a speech by Pope Francis that urged the assembled business and government leaders to remember the less fortunate.
 
Mr. Mahama agreed that a lack of inclusion would prevent African countries from being truly secure.

He also argued that while drawing in foreign investors was important, so too was promoting a homegrown business industry that would more directly enrich Africans.
 
The panel's moderator, Bronwyn Nielsen, at one point directly asked the participants to rate financial inclusion's importance to African prosperity, on a scale from one to 10, with 10 being the most important. Mr. Jonathan initially deflected; "You don't deal with numbers in that way," he pleaded.
 
But every other panelist acceded to the idea that spreading newfound wealth was important, ranking it 10. After feeling a bit of pressure (and another panelist answering 10 on his behalf), Mr. Jonathan conceded that, yes, inclusion was of utmost importance.

Original article by Michael J de la Merced

Category: General