Realising the Potential of Africas Youth: Report of the Africa Commission, May 2009 – An Assessment
By André Sonnichsen
Department of Political Science, University of Copenhagen
It was a star-studded collection of personalities which this May (2009) were assembled in Copenhagen to unveil the final Report of the Danish governments Africa Commission.
A year in the making, the Report was described by one of the Commissioners and President of the African Development Bank Dr. Donald Kaberuka as a “breath of fresh air”.
Many would probably agree that this is precisely what is needed in the context of the stale development aid debate of recent years.
Indeed, if we are to take the words of one of its driving forces, Commissioner and Danish Minister for Development Cooperation Ulla Tørnæs as the point of departure, the work of the Commission marks a decisive break with what she described as an outdated and centralist development paradigm which, she claimed, has dominated development aid for decades without significant results.
But, is there merit in the suggestion that we here have something new?
And if so, can it deliver development where other approaches have failed, hereunder in bringing us closer to reaching the 2001 UN Millennium Development Goals, now generally regarded as unreachable by 2015?
What is the core message of the Commission?
Before proceeding, it might be useful to clarify the basic point made by the Commission, which is this: history ostensibly illustrates that successful social
development results from market-led economic growth originating in the private
sector.
Tørnæs asks, “why should this not work for Africa”?
This basic assumption, which underpins the Commissions approach, maintains that effective development only occurs once the job-creation potential of the private sector is harnessed.
Allegedly, any development aid policy which does not recognise this as a primary
point of focus will be unsuccessful. For these reasons, it is suggested, development aid should not focus primarily on state capacity building or governance, even though is recognises these as “prerequisites (forudsætninger) for economic growth and development”.
Instead, poverty reduction will best be achieved through expending resources on the direct empowerment of grass-roots entrepreneurs.
Moreover, due to the youth bias of contemporary African demographics, assistance to the African private sector should be directed towards job creation for, and by, the youth.
Part of this job creation strategy should reverse the tendency of African states to export unprocessed raw materials, attempting instead of add value to them domestically.
This overall approach is translated into 5 concrete initiatives (see Report), which,
briefly put, aim to strengthen African small to medium enterprises (SMEs) by:
* enhancing their access to financing
* boosting entrepreneurial skills through vocational education and training
(Track 1) and research on agro-business (Track 2)
* advancing SMEs integration into the global economy, hereunder by implementing reforms based on benchmarking of the competitiveness of African SMEs
The use of sustainable energy resources are seen as integral to the approach.
How should these be assessed?
“Asian Tigers”, African lions and three challenges:
FIRSTLY, whereas it is a plausible general argument that a strong private sector is
important for development, such a coveted thing has never arisen outside the
assistance of a strong state.
Successful states have historically established enabling environments for private sector growth, hereunder basic (but in Africa still mostly unavailable) infrastructure like a stable electricity supply, IT-based communications, legal frameworks for enforcing contracts etc.
Commissioner and President of ECOWAS Mohamed Ibn Chambas was spot on here, when, in reference to the need for developing African private sector agriculture, he pointed out the general lack for stable irrigation supplies an the complete inadequacy of “just relying on nature”.
SECONDLY, although the focus on empowering grass-roots entrepreneurs in SMEs is sympathetic, it seems difficult to link this concrete micro-level aim with some of the expected macro-level outcomes in terms of national competitiveness in the global economy.
This comment is not to be read as a lack of confidence in grass-roots dynamism. Instead, it is an attempt to point out a miss-match between the quite grand ambitions which are being placed on relatively narrow shoulders.
Commissioner Kaberukas reference to the “Asian Tigers” in this connection seemed completely to overlook the fact that precisely the Asian tigers are usually taken as examples of the need for massive, long-term, state-led, industrial development strategies wherein large, state-subsidised corporations who enjoy protectionist trade policies during their formative years, play a central role.
Although the Report recognises the need for macro-level economic thinking, its seems doubtful that future African Lions will come from providing micro-finance to SMEs in open and vulnerable economies.
THIRDLY, since one of the perennial weakness of development aid is the lack of coordination that results from the often contradictory demands of bilateral donors, it is unclear how the Commissions reference to “advocacy” and “lobbying” of other donors will help to mainstream the recommendations of the Commission.
As far as the international organisation of development aid is concerned, problems will remain.
Incidentally, the call by the Commissioner and Managing Director of the World Bank, Dr. Ngozi Okonjo-Iweala, for the increasing use of “non-traditional donors” such as China and Brazil, will accentuate this challenge.
Is the private sector a novelty?
There seems little doubt that there is a demand for micro-financing of African SMEs.
An excellent example is the Danish portal (www.myc4.com), which already since
2004 has sent more than 8 Million euro from small first-world investors to African
SME based on the slogan “business as the tool to end poverty”.
To this example of the use of the private sector in African development can be added the (much debated) preferences of the World Bank and the International Monetary Fund of the 1990s “Washington Consensus” years, which also allocated a central role to the spontaneous dynamism of market forces in ensuring African development.
In this light it is difficult to see the novelty of the approach of the Africa Commission.
The notable criticisms from important parts of the Danish development aid
community seen over the past week probably comes from the feeling amongst
observers that although the Africa Commission might be a fruitful initiative, Tørnæs claim that it “walks a new path” seems overstated
In addition, it seems tactically short-sighted and confrontational to dismiss the concerns of parts of the Danish development aid community on the grounds that they are “stuck in old ways of thinking” and are needlessly “worried by the change which the Commission represents”.
There seems to be little basis in content for taking this stance, and little need for it either.
In conclusion . . .
There is a clearly a role for market forces and the private sector in African
development.
However, this role has been recognised for some time in international development aid thinking, and where utilised, it has been clear that the effective contribution of the private sector to poverty reduction relies upon the prior existence of an enabling environment (parts of which are described above) which have little to do with the market and everything to do with an effective public sector.
Whether or not the 200 million DKK which the Danish Government has allocated on this years budget for immediate follow-up on the Commissions work, and the impressive political clout assembled in the Africa Commission as a whole, will give Ulla Tørnæs the resources necessary to convince other donors of the utility of the approach, the coming months will tell.
African SMEs are bound to appreciate the effort, which however cannot stand alone.
Kilde: Seneste nyhedsbrev fra Nordiske Afrikainstituttet i Uppsala i Sverige
