In the past two decades, Africa’s promising economy has attracted investors from across the globe. According to a McKinsey report in 2010, Africa’s economy will “generate as much as $2.6 trillion in revenue by 2020.” In a similar vein, Africa’s economy ranked the fastest growing of any continent in 2013. This progress is in part due to Africa’s investor-friendly environment, remarkable trade and economic reforms, and competitive rate of return for investors. However, unemployment, weak private sector, poor public health, and corruption remain fundamental challenges for the continent. Therefore, Africa needs to invest in and support good quality academic research to address those challenges.
Africa’s Time Has Come
In 2016, African leaders gathered for the 26th African Union Summit in Addis Ababa, the capital of Ethiopia. One of their aims was to set the objectives for the Continental Free Trade Agreement (CFTA), an intracontinental economic and trade integration accord. This agreement seeks to transform the African economy and its people into one fully-functioning economic machine. Its goals are to create a single market of goods and services, bring more than a billion people into the same market, and encourage investment and entrepreneurship. In March 2018, 44 African heads of state gathered in Rwanda’s capital, Kigali to officially sign the CFTA framework.
Today, 19 African countries have ratified the CFTA, approaching the minimum required threshold (22 countries) for the CFTA to enter into effect. This is a fundamental achievement for Africa considering its history with previous free trade agreements. For instance, both of the CFTA’s predecessors, the African Economic Community (AEC) and the Tripartite Free Trade Area (TFTA) experienced slow ratification processes. But the speed of the African nation-states’ ratification of the CFTA is different. In less than two years after its introduction, the CFTA is only three countries short of entering into effect. This determination of Africa’s younger generations to embrace free trade shows that Africa truly “means business.”
Serious Challenges Ahead
The International Monitory Fund (IMF) reported an economic growth of more than 4% in 2018-2019 in Sub-Saharan Africa. This economic prosperity is mostly noticeable in transportation infrastructure and public housing, but its impact on individual financial growth has been marginal. High unemployment rates, poor public health, a weak private sector, and corruption are major issues. Although economic growth remains robust in the public sector, the cost of this growth is rising debt. As a result, this growth could generate a quick and transient economic boom, but in the long run, it could have an irreversible impact on social growth and the prosperity of future generations.
But these challenges can be addressed if Africa invests in quality academic research. Quality research can help tackle the unemployment issue by producing practical literature on training younger generations in essential skills such as Robotics, Artificial Intelligence and Renewable Energy. In health, quality research can assist Africa’s younger generations in producing quality healthcare and preventing future epidemics. It can open up opportunities for them to connect with Western and Asian labs and research centers to further their medical research. Quality research can help improve both innovation and efficiency in the private sector. It can help identify the strengths and weakness of Africa’s economy in retail, agriculture and manufacturing. It can produce empirical evidence on how to reap the benefits of free trade beyond mere import and export, such as in tourism, financial services, legal services and education. Quality research can pinpoint the fundamental roots of corruption in Africa’s system of governance and assist in finding workable solutions. This means that Africa will need to invest more in education, think tanks, invite world-class economic experts and promote equal education.
Quality research can also support Africa’s burgeoning economic reforms. Unlike their predecessors, Africa’s political leaders seem to be willing to undertake reforms and welcome constructive criticism. For example, when Rwanda’s president Paul Kagame was elected as chairperson of the African Union (AU) in January 2018, he immediately called for critical reforms of the AU as an organization and promised to “fight against corruption”. One year into his chairpersonship of the AU, not only do a majority of Africa’s leaders agree with Mr. Kagame on fighting against corruption, but there is also a significant wave of political and economic reform sweeping across the continent. For instance, in Angola, the IMF approved a fund of $3.7 billion to support the country’s economic reform program. Ethiopia’s Prime Minister, Abiy Ahmed, has undertaken a number of economic and political reforms in the industrial sector, specifically in construction and manufacturing. In April 2018, the World Bank approved a grant of 25 million dollars to the Central African Republic to support economic reform programs. The reforms in these countries, coupled with quality research can help produce economic formulas specifically designed to address the challenges facing Africa’s economy.
Finally, closing the gap of industrial inequality, strengthening individual growth, creating a well-regulated private sector, and encouraging innovation are the keys to a prosperous Africa.
Image Credit: Embassy of Equatorial Guinea via Flicker and it is available under a Creative Commons license.
The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of The Geopolitics.
The author is an academic based in Colorado, USA. His research and studies focus on Middle East and East Africa.
