After Donald Trump’s stunning victory in the US election this week, everyone (and I mean everyone!) is waiting with bated breath to see what policies he will implement when he comes into office next January.
If he stays true to his campaign promises (and let’s hope he doesn’t), then America will almost certainly close ranks, both diplomatically and economically, which will mean fewer opportunities for emerging markets.
And like this Destiny Man article proposes, the details – which Trump was light on, during the campaign – will be vital, especially to African countries with regard to AGOA, and if this partnership will continue in its current form.
So, what then of African growth and development in the face of a US gradual (or quick) withdrawal?
Well, our collective dependence on China has shown that putting our economic eggs in one basket is a very risky policy. Many African countries, due in chief to the steep, steady decrease in commodity prices, have suffered material losses in forex reserves, thereby hampering trade drastically. In one of my previous jobs, our exports into Angola and Nigeria were hardest hit due to import regulations constantly changing as a result of loss of available liquidity. The knock on effect, of course, was VERY slow customs clearance (which widens the opportunity for corruption, naturally), inflated demurrage bills, and a slow-down in sales due to the unavailability of product.
BUT, the point is, growth in Intra-Africa trade is still possible, and as the continent’s largest economy, we should be driving force in the African Economic Resurgence.
As it is, South Africa is already providing the stimulus for various sectors, like Retail (with Shoprite leading the way), Cellular (MTN), FMCG (Tiger Brands) and Agriculture (many of our farmers now ploughing the fields of Central Africa). Another field where South Africa can lead the way is fostering small business development through the use of technology. There are many IT geniuses who are developing apps that help the rural entrepreneur growing his or her business, and the export of this particular service can grow African economies immensely.
And because the rest of Africa is expanding off a low base, growth in the continent can be considered to be exponential, if it is governed by a coherent vision, strong policy implementation, and effective management.
And this is where the fundamental shift must happen. Africa’s history is beset by the ‘Big Man’ phenomenon, which has only caused accumulation of wealth to the elite, rampant corruption, and a systematic breakdown of economies. However dire this may sound, a vision of open markets amongst ourselves will give rise to greater growth. Strengthening of Intra-Africa trade agreements and blocs, such as SADC and ECOWAS, will foster greater cooperation between countries, and go a long way toward fostering lasting, fruitful economic partnerships.
This can only be done by a government committed to:
1. A vision of an open economy, where everyone has a right to access opportunity
2. Policies that foster trade amongst African countries e.g. Free movement of goods and services within SADC
3. Effective management of trade, decreasing corruption, and stimulating growth
The present Department of Trade and Industry, in conjunction with the Department of International Relations and Cooperation must work together to see that the vision of African growth, by Africa itself, is realised.
We should be at the vanguard of African growth. Is this government up for it?