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Irony of resource-rich Africa remaining poor must be reversed

28th September 2018

By: Martin Creamer

Creamer Media Editor

     

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There are many world leaders holding thumbs that Africa moves to the next level in the not-too-distant future. Encouraging African steps just taken include the African Continental Free Trade Agreement between 44 African Union member States, with the goal of creating a single market.

But even while we Africans hold thumbs for our continent, there are new lessons cropping up, the latest coming out of the copper-rich Zambia, which, in 2012, according to the latest Economist publication, could borrow more cheaply than Spain, but is now forced to borrow at excessively high rates.

“An increasingly authoritarian regime is pushing Zambia towards a debt crisis,” says the Economist’s Lusaka-datelined headline.

We, the people of Africa, need to begin raising our voices far louder about African countries going backwards while other resource-rich counterparts streak ahead.

Zambia produces more copper than any other African country and should be doing every bit as well as Chile, where the copper is far deeper.

By now, the proceeds from copper and cobalt should, in good government hands, have lifted the standard of education, with the help of fantastic modern technology that provides screen access to the world’s best teachers.

Instead, 18 of the continent’s countries, according to the International Monetary Fund, are at risk of debt distress. South Africa itself is in economic recession, while a country like Australia has deliberately and successfully used mining to drive impressive economic growth.

How can the African Continental Free Trade Agreement “set the world of African logistics on fire”, to coin the phrase of a local freight forwarders association? How can vehicle assembly, manufacturing, agricultural development, service business and general entrepreneurship be optimised?

The truth is it is only broad-based economic growth of the kind that bursts out all over that will do the trick. The past concentration on cyclical resources alone has failed over and over again.

But the bursting-out-all-over approach is reliant on stable macro- economic policy, the rule of law, consistent and efficient government regulation, limited corruption and well-managed State enterprises, write Greg Mills and Jeffrey Herbst in an opinion piece on African economic growth.

Beneficiation must also be seen in context. In Zambia’s case, if all the copper produced was turned into wire, writes Matt Pascall in a discussion paper for the Brenthurst Foundation, internal demand would be less than 5% of all copper wire produced, meaning 95% would have to be exported. To export, a skill set has to be developed that is far from what is required to mine and produce bulk copper.

Go forward, we must, but we are going to need a lot of assistance to get us firmly on the road to success.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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