‘West has no interest in Africa’s development’

MASERU – THE Chinese and other Western powers have no interest in Africa’s development, according to Vickson Ncube, the Chief Executive Officer of Pan African Federation of Accountants (PAFA). Ncube was speaking at the 9th annual Lesotho Institute of Chartered Accountants (LIA) conference. The conference, themed “Reimagining Business in Africa: a journey towards economic resilience” drew participants from some of the region’s top economic and financial experts.

“No American, European or Chinese will have African interests that will develop the continent. It is us Africans who need to have African interests,” Ncube said.
He cited the case of the Chinese, who are now bringing in their own workforce even for basic manual labour that is abundant locally.
Ncube added that Africa should seek a model that enhances resource utilisation for sustainability and development
“Africa is not desperate. We should stop putting up a desperate face in negotiations and negotiate from a point of strength,” Ncube said.
“We should not go to the negotiating table and succumb as if we have something to lose.”

Ncube argued that Africa has not benefited accordingly from 90 percent of developmental projects in the world.
The experts said Africa is wrong to seek solutions elsewhere. That has resulted in sustained unemployment and poverty.
Africans have watched helplessly as their leaders seem attracted to a new scramble for the continent’s rich natural resources.
China, the United States and European countries have in the past two decades intensified competition to penetrate Africa, primarily to exploit its natural resources to feed their growing manufacturing industries.

As a result, Africa has remained an exporter of raw materials and a net importer of expensive processed goods from Asia and the West.
In the meantime, the continent’s growth has remained stunted and countries have relied heavily on borrowings and aid from the same powers plundering their resources.
Economic experts say African leaders usually negotiate from a weak bargaining position yet they could use their position as a bastion of much-needed resources to drive hard bargains that further the continent’s economic interests.

These interests should include growing a sustainable manufacturing industry through value addition of local resources, experts say.
Minister of Trade and Industry Tefo Mapesela said the continent is taking major strides in growing the private sector.
Mapesela said despite the myriad of challenges, it is not all gloom and doom.

He said global attention is shifting towards Africa and other emerging markets as centres of future growth.
Experts believe business and trade will be crucial to the continent as it has a strong economic growth potential.
Research shows that Sub-Saharan Africa’s population is expected to explode to 2 billion by 2050, which will result in more than a fifth of the world population being in Africa, Mapesela said.
Consequently, the minister said, Africa’s population will become much younger and more affluent.

This major demographic shift, Mapesela argued, will provide an array of opportunities and challenges, and the continent’s economy will boom.
He said when coupled with robust economic growth, population growth will support the emergence of the continent’s consumer base – providing support to local firms, creating economic opportunities, and attracting foreign investment.

“So if Africa takes advantage of these opportunities then economic growth would reach the highest levels ever,” Mapesela said.
South African Finance Minister Tito Mboweni said corruption, over-dependence on development agencies and political instability hinder Africa’s economic growth and development.
Mboweni was reflecting on some of the challenges facing African economies.

He said there is a general consensus amongst economists and policy makers that there is a need for a few fundamental ingredients for economic growth and performance.
“Macro-economic stability in particular and the stability of the fiscal and monetary system,”Mboweni said.

In this regard, the old rule of thumb that the budget deficit before borrowing should not be greater than 0.3 percent of the GDP stays, the minister said.
He said the monetary stability in terms of inflation should be kept at the lower levels in order to protect the value of the currency and the purchasing power of the poor.
He said higher inflation is bad for the working class because their buying power is reduced and lower inflation is good for the working class because their buying power is protected.
The minister said institutional stability is critical for growth, especially when coupled with credibility.

“In this instance, let me make the example of a credible central bank as a key institution for economic performance and growth, an institution that is robust and staffed with people who would not stage regular heist against the national revenue. Whenever we think of heists we think of heists in terms of banks but there are heists in national treasuries,” Mboweni said.

According to Mboweni, a credible revenue collecting agency that collects revenue without fear or favour and duly deposits the revenue in national treasury is also a critical factor.
“One of the problems is the tendency by politicians to (pressure) the revenue services to grant undue tax breaks to certain preferred business people,” he said.
He also mentioned policy certainty, stating that governments need to introduce credible and certain policies that are not changing all the time.

Mboweni said inconsistent policies confuse investors and make it difficult for business to make medium to long term plans.
A free media that is able to hold both government and the private sector to account is a key ingredient to economic growth and development, said Mboweni.

Lemohang Rakotsoane & Refiloe Mpobole