Africa Can Capitalise on EU Crisis
The unfolding turmoil in one of Europe’s major economic powerhouses, Spain, where embattled citizens are queuing daily to register for employment before the doors close, paints a very gloomy picture of the development of African economies as well.
Africa has of late been facing a great deal of exploitation from European countries because there has not been balance of trade. European countries have been getting raw materials cheap from Africa only for Africa to purchase processed products at exorbitant prices.
The current situation in Spain, where the citizens queue everyday for employment, mirrors what is happening in Europe.
The European economy is on fire and other parts of the world, emerging markets notably from Africa and Asian countries should be smiling all the way to the bank.
These markets have been registering impressive growth rates on the back of rising commodity prices, subsiding political upheavals, improved policy frameworks and the freezing of physical borders as the political village mantra is gaining currency.
It is high time African countries implement sustainable policies that can move the economies forward.
Accordingly, the policies should be investor-friendly. African countries, powered by their resources, can certainly capitalise on the massive appetite of Western nations to find new ways of sustaining their economies, as they seem to have exhausted their traditional sources of growth.
If the African continent is going to engage foreign investors, the resources have to fetch the right prices on the international market. Consequently, local companies should also engage friendly partners who believe in zero-sum game without any room for win-lose scenario.
Countries within Africa must also embrace indigenisation polices. In crafting indigenisation and economic empowerment policies, there must be room to empower Africans by setting policy measures which attract foreign direct investment with traceable effects of job creation and also technology transfers.
Furthermore, empowerment policies should be more biased towards setting prudential limits where the foreign investor is allowed to open some form of industry rather than just mere retail shops like what the Chinese are doing.
This is the right time for Africa to start harvesting from the desperation of European economies, as the global economy balance of power has shifted to the south and east with the massive protest that characterised the recent May Day celebrations in Europe, a clear testimony of how stretched their economies are.
To effectively benefit from the global recession affecting the West, African governments should implement strategies that enhance value edition; import substitution and specialisation in production of tradable goods.
The time is now ripe for Africa to build the continent to recompense for the lost decade. Thus, Africa needs to start creating jobs for those who are willing and able to work.
More so, entrepreneurship should be promoted but not as a substitute for job creation, rather to widen the fiscal space through tax collection, which is an important background for infrastructural development.
Recently, British Deputy Prime Minister Nick Clegg said that the engagement of Africa and Europe should provide a platform for European economic rescue through opening of new markets and trade.
Clegg went on to say, “All British firms should embrace British-Africa business partnerships if they are to realise their lost pride and again brewing new business relations with Africa.”
Accordingly, countries in the African continent should utilise this opportunity and capitalise on the economic woes that are affecting Britain and other Western countries to transform their economies.