Recently on May 7th 2014 the 24th World Economic Forum on Africa was concluded in the capital of Nigeria, Abuja and the theme of this major summit was “Forging inclusive growth, creating jobs”. That inclusive growth and job creation are at the forefront of policymakers and economists minds in Africa is no revelation at all, considering these two issues have been stifling the “Africa Rising” narrative for the past decade. This “Africa Rising” narrative has its roots in The Economist’s piece which pointed out that, “over the past decade, 6 of the world's 10 fastest-growing countries were in Africa.” According to a McKinsey report; real GDP in Africa grew twice as fast in the 2000s as it did in the 1980s and 1990s which were two decades riveted with conflict and stagnation. Yet, all is not well throughout Africa and a starting point would be for us to emphasize that contrary to Western media perceptions; Africa is not a homogenous, monolithic bloc but rather a patchwork of different countries, ethnicities, languages and religions which all serve to add to Africa’s diverse charm.
The main issue affecting African economies has been the failure to create jobs for the increasing numbers of young people entering the labour force every year. This is especially frustrating when one takes into account that 70% of Africa’s population is under 25 years old meaning African economies have either a “Demographic Dividend” on their hands or rather ominously a “Demographic Curse” with the latter creating the potential for instability for decades to come. Yet, despite their robust growth rates African economies have not kept up in regards to job creation and in particular it can be argued that large bureaucracies and persistent “Capitalist Cronyism” and corruption has kept graduates from finding employment in the public sector. A depressing contemporary example occurred last March in Nigeria whereby 65,000 jobseekers turned up to a 60,000-capacity National Stadium in Abuja to take a recruitment examination organised by Nigeria's Immigration Service (NIS) with only 4000 vacancies. Needless to say the ensuing confusion and scramble led to a deadly stampede with 18 tragically dying. Although this was an extreme example it is a symptom of Africa’s overwhelming youth unemployment issue affecting all countries within the continent, whereby youth unemployment throughout stands at a staggering 67% - 70% (UNDP, 2011). At the same time, it has been the private sector that has succeeded in creating jobs, yet even this has been at a gradual and inconsistent rate. As a result many of these resourceful and determined young people within African have turned to entrepreneurship as a way to combat unemployment and poverty. There have been some innovative start-ups created by these young jobseekers but again the issue that has been stifling their progress has been a lack of access to loans either from their respective governments or commercial banks. As a result, sustainable growth can only be achieved when genuine inclusive economic growth is felt across the spectrum of African economies. This can be done through a combination of increased government interventions through quotas for young people, greater infrastructural projects, the elimination of corruption and increased support in assisting young people to secure loans for entrepreneurship. The extensive private sector within African economies can also serve to absorb this youth bulge through the integration of young people within key sectors of the economy, in particular the innovative sectors such as; Telecommunications where African firms such as; M-PESA (mobile banking) have become global leaders in their field. In particular, this focus on inclusive growth is a timely addition as African economies have been characterised by a high degree of income inequality as of late with the ever increasing class of the African “Elites”. This group consists of government officials and the ever increasing numbers of millionaires who often benefit from state favouritism in order to secure contracts for major infrastructural projects or to form a monopoly in a specific sector with tactic government approval. Although there are many who have gained their wealth in an honest and hard earned manner, it is still the perception amongst unemployed youth throughout Africa that they are being short changed and left behind in Africa’s exceptional economic rise, whereas this new elite class is gaining centre stage.
To conclude, although African economies face such tangible challenges, Africa still has the ability to fulfil its substantial promise. Africa as a continent will be able to do this as long as it ensures that this growth is felt by all and that the unemployed and unprivileged youth are not ignored within this appealing “Africa Rising” narrative. I will end with a quote from the World Economic Forum in Africa summit whereby Albert Kobina Essien, CEO of Ecobank Transnational stated; “Africa has been rising for a long time. I hope we will eventually get to a point where we have risen.”
By Bashir Ali – Research Analyst at the Somali Economic Forum
Somalia Investment Summit 2014 - The 2nd Somalia Investment Summit comes after our last year’s successful summit hosted in Nairobi, Kenya in 2013.
The 2014 Investment Summit themed ‘Opening Your World to New Possibilities’ is once again brought to you by Somali Economic Forum. Over 250 leaders from the public and private sector, international business experts and investors, will converge in Dubai to discuss opportunities, share best practice, forge strategic partnership and showcase Somalia that is ready for foreign direct investment. Together, the political and business leaders will discuss ways of ensuring that Somalia turns its economic growth into real prosperity.
SIS 2014, will offer a platform for the Somali government department and ministries to engage, with both national and international investors and showcase the abundant investment opportunities available throughout the country.
Given the increasing interest in the whole region, now is the time for domestic and international players to examine the vast potential in Somalia. Clearly the Somalia Investment Summit Dubai 2014, is the place to be for those businesses looking to venture into the Horn of Africa and particularly Somalia.
The Summit hosted a day after the Annual Africa Global Business Forum will certainly attract regional and international decision makers, international business community, academics and media.
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