Strengthening continental economic relations

  • Published in Editorial

The African brand has been in the spotlight in recent days particularly as world media and analysts watched the outcomes of the 2nd China-Africa Summit on Co-operation (FOCAC) hosted by South Africa.

Much has been said about the impact of the agreements signed between China and Africa to support the growth and development of the continent.


Historically China has always been a friend of the continent and it is a testament to the strength of these relations in that they are continually strengthened.  At the FOCAC Summit which concluded last week, China announced a US$ 60 billion package of support to the continent which will cover the areas of industrialisation, agricultural modernisation, infrastructure, financial services, green development, trade and investment facilitation, poverty reduction and public welfare, public health, people-to-people exchanges, and peace and security.

One of the key drivers of the successful implementation of Agenda 2063 will be the integration of the continent – through infrastructure development which will most importantly, contribute to stronger people to people relations and which will facilitate the ease of movement of both visitors to the continent and citizens.  Stronger integration will also equally bring greater co-operation between regional economic communities (RECs), markets and investors.The integration of the continent facilitated by infrastructure development, will also enable corporate entities to leverage economies of scale to bring greater benefits to the continent.

The importance of positive economic and trade relations, as well as infrastructure development, in ensuring the Africa Rising story becomes the dominant narrative about our continent, cannot be overemphasized.  When countries grow by, amongst others, attracting increased foreign direct investment because of their competitiveness, the citizens of the country benefit socio-economically.  As a country develops in this way, it’s brand changes.  The development of positive national brands on the continent will be critical to overhauling the current images and perceptions associated with our continent.  This is directly related to the reputation of our countries and therefore our continent.

Corporate entities are at the forefront of the continent’s growth and development narrative.  While governments can create the enabling environment for investment and a business friendly environment, it is the corporate sector which is crucial to making this a reality.

Michael Porter, one of the foremost authorities on national competitiveness explains this by saying that companies contribute to national competitiveness by efficiently producing and selling at a price higher than the cost of production, thereby making a profit.   It can be expected that as companies grow, their potential to contribute to national priorities like job creation, social investment and development will also increase.  Their contribution to the country’s tax base also contributes to national development.

In addition, the products made by our national corporates, which carry the “Made in…” label, are also critical to the perceptions have of our country’s and our people.  Do our products deliver on their promise to the consumer, do they offer value for money, do they represent the aspirations of consumers – if the answer is yes, then our corporates and the products they offer to consumers are playing their part in growing our nation brands.

And despite global economic turbulence, the African continent is on an upward trajectory in terms of improving our competitiveness and with this our national and continental brands.

The World Economic Forum’s Africa Competitiveness Report 2015 observes that “… for five years, growth rates have averaged over 5%, and rapid population growth holds the promise of a large emerging consumer market as well as an unprecedented labour force that, if leveraged, can provide significant growth opportunities. Moreover, the expansion of innovative business models, such as mobile technology services, is indicative of the continent’s growth potential.”

However, persistent challenges where “nearly one out of two Africans continues to live in extreme poverty, and income inequality in the region remains among the highest in the world,” and where productivity levels remain low across sectors – from agriculture to manufacturing and services must be addressed with haste.

The African Development Bank in its 2014 African Development Report concurs with this assessment which suggests that more needs to be done to unlock the areas which will help build competitive knowledge-intensive economies.  This cannot be separated from the need to build our human capital across the continent.  

Against this backdrop we see that the African brand has opportunities and strengths, as well as challenges and threats at vast ends of the spectrum.

The continent, led by the African Union (AU), and its leaders have been conscious of the urgency for African countries to raise their socio-economic levels, to deliver on the aspirations of citizens and to overhaul traditional perceptions of Africa thus building a positive reputation.  In its implementation, Agenda 2063 will enable the building of national and therefore continental competitiveness by addressing issues identified by African leaders as well as other international institutions.

While there is certainly much work to be done – as governments, organised business and civil society – there is good reason to be optimistic about Africa’s growth and development.    The 2014 African Development Report observes improvements in terms of intra-African trade saying that, “after decades of relative stagnation, the value of formal intra-African trade has increased almost fivefold in absolute terms between 2001 and 2012; though its relative share has remained constant at around 12% and sits below other regions. In particular, intra-African greenfield FDI projects as a percentage of greenfield inflows into Africa almost tripled between 2003-2013, from 7% in 2003 to over 21% in 2013.”  This would not be possible if governments were not creating investor friendly environments.  It would equally be impossible if the corporate sector, were not taking advantage of these enabling conditions and investing on the continent.

The fore-fathers of our glorious continent envisaged a prosperous and developed Africa at peace with itself.  I would hasten to say that the time has come for each of us to play our part to turn this vision into reality.  The continent’s first ever blueprint for socio-economic development, Agenda 2063 provides a roadmap to guide us towards achieving this and with this will come a transformed African brand.

Kingsley Makhubela/Sanchar Express News Desk